|
|
Home | Switchboard | Unix Administration | Red Hat | TCP/IP Networks | Neoliberalism | Toxic Managers |
| (slightly skeptical) Educational society promoting "Back to basics" movement against IT overcomplexity and bastardization of classic Unix | |||||||
|
|
This is a really fascinating story of a guy who is almost universally hated for his personality flaws. He is arrogant, authoritarian and unlikable. He is the person who professes neoliberal ideology, a staunch supporter of deregulation of financial sector and who played a role of a hired gun in killing Glass-Steagall. It's really amazing that he after all his adventures in Clinton administration he managed to land the important position in "the change we can believe in" (aka "it could be worse") Administration, but this is just a testament of Rubin's influence in Obama administration. Like his mentor, Summers is a prominent member of pro-Wall-street wing of the Democratic party, or as it is called Clinton's gang or “plutocratic Taliban”. As an economist Summers has gone through several (questionable) revolving doors, and that mean that it is natural to suspect his level of scientific integrity.
|
|
He became a walking illustration of corruption of the academy by special interests. Like few others (and first of all his protégé Andrei Shleifer) he became a multimillionaire due to his services to financial industry and once got $135K for a single speaking engagement in Goldman Sachs. This level of corruption of academics is a disgrace, but nothing new. Mishkin did worse things. Fat cats of economic profession institutionalize the relations typical for Academician Lysenko among students, and contribute to the problems of the society instead of helping to solve them. What $100K+ per "speaking engagement" fee means, if not a bribe with a fig leaf attached (Larry Summers and the Subversion of Economics The Chronicle of Higher Education).
"Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)"
"Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. This is now, literally, a billion-dollar industry."
This is very disturbing but what is more disturbing that in case of Summers there is strong evidence of cronyism and nepotism during his meteoric rise to the top. Larry Summers is a nephew to both Ken Arrow and late Paul Samuelson. In a mandarinate that sure is US economic profession that's a tremendous help for any person in climbing to the top.
“The Company applies its expertise in research, consulting, technical assistance, data collection and medical and life sciences to a wide variety of problems in the public and private sectors. In the United States, Abt Associates has helped shape many important and complex public programs, including Medicaid, welfare reform, Head Start, crime reporting, and housing experiments. The Company is also a recognized leader in providing technical assistance to facilitate policy reforms in countries moving to market oriented economies.”
Summers' academic mentor was conservative economist Marty Feldstein, and he worked for Feldstein at Ronald Reagan's Council of Economic Advisers in the early 1980s. Being a protégée of Robert Rubin helped Summers to obtain lucrative government positions.
Both men are proteges of Robert Rubin, a former Clinton Treasury secretary who served on Citigroup Inc.’s board from 1999 until this year and has been criticized for allowing the bank to pile up $544 billion of derivatives and securities before it became the recipient of more government assistance than any other bank. Rubin declined to comment.”
If one wants to be more sharp critic, he/she can view Summers as a staunch neoliberal, a typical academic servant of banking oligarchy, an academic lobbyist for financial industry.
|
Classic example of a modern type of neo-bribes for neoliberal economists: $135,000 for one speech at Goldman Sachs. |
The popular joke that "the relationship between government and banking is the closest thing to organized crime taken over society" sounds alarmingly true, when applied to Summers activity (Larry Summers and the Subversion of Economics - The Chronicle of Higher Education):
As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.
After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department—where he championed the law that made Citigroup's creation legal—became both vice chairman of Citigroup and a powerful member of Harvard's governing board.
Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency. During this time, Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)
Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a "full-blown financial crisis" and a "catastrophic meltdown."
When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a "Luddite," dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.)
Among key "mis-achievements" of this staunch neoliberal, we can mention the following:
The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate[12] and by a 343-86 vote in the House of Representatives[13]. After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8 (1 not voting) and in the House: 362-57 (15 not voting). [These margins of passage, if repeated, would have been well over the two-thirds needed to overcome any veto, had the President returned the bill to Congress without his signature.] The legislation was signed into law by President Bill Clinton on November 12, 1999. [14]
The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.[7]
As chairperson of the CFTC, Born advocated reining in the huge and growing market for financial derivatives. . . . One type of derivative—known as a credit-default swap—has been a key contributor to the economy’s recent unraveling. . .
Back in the 1990s, however, Born’s proposal stirred an almost visceral response from other regulators in the Clinton administration, as well as members of Congress and lobbyists. . . . But even the modest proposal got a vituperative response. The dozen or so large banks that wrote most of the OTC derivative contracts saw the move as a threat to a major profit center. Greenspan and his deregulation-minded brain trust saw no need to upset the status quo. The sheer act of contemplating regulation, they maintained, would cause widespread chaos in markets around the world.
Born recalls taking a phone call from Lawrence Summers, then Rubin’s top deputy at the Treasury Department, complaining about the proposal, and mentioning that he was taking heat from industry lobbyists. . . . The debate came to a head April 21, 1998. In a Treasury Department meeting of a presidential working group that included Born and the other top regulators, Greenspan and Rubin took turns attempting to change her mind. Rubin took the lead, she recalls.
“I was told by the secretary of the treasury that the CFTC had no jurisdiction, and for that reason and that reason alone, we should not go forward,” Born says. . . . “It seemed totally inexplicable to me,” Born says of the seeming disinterest her counterparts showed in how the markets were operating. “It was as though the other financial regulators were saying, ‘We don’t want to know.’”
She formally launched the proposal on May 7, and within hours, Greenspan, Rubin and Levitt issued a joint statement condemning Born and the CFTC, expressing “grave concern about this action and its possible consequences.” They announced a plan to ask for legislation to stop the CFTC in its tracks.
As Bob C noted in his comment to As Obama Taps Larry Summers, Recalling Summer's Days as a Regulation Foe Mother Jones "One thing to keep in mind about Summers and Rubin's position on regulating derivatives is the timing: in July of 1998 when Summers testified, the hedge fund Long Term Capital Management, had not yet failed. That would happen 3 months later, when it became clear that a substantial part of LTCM's problem was that it had massive side bets in derivative instruments that when it could not cover these bets, caused massive dislocations and threats to the global banking system (which had invested heavily in LTCM, thinking it was run by "geniuses"--see Roger Lowenstein's great book, "When Genius Failed".) I think Summers and Rubin might have had a different view on the regulation of derivatives after the LTCM catastrophe."
Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . . Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.
Economist's View The Most Misunderstood Man in America, by Michael Hirsh, Newsweek:...Even in the contentious world of economics, [Joe Stiglitz] is considered somewhat prickly. And while he may be a Nobel laureate, in Washington he's seen as just another economic critic—and not always a welcome one. Few Americans recognize his name... Yet Stiglitz's work is cited by more economists than anyone else's in the world... And when he goes abroad—to Europe, Asia, and Latin America—he is received like a superstar, a modern-day oracle. ...
... ... ...
... Stiglitz's defenders say one possible explanation for his outsider status in Washington is his ongoing rivalry with Summers. ... Since the early '90s, when Summers was a senior Treasury official and Stiglitz was on the Council of Economic Advisers, the two have engaged in fierce policy debates. The first fight was over the Clinton administration's efforts to pry open emerging financial markets, such as South Korea's. Stiglitz argued there wasn't good evidence that liberalizing poorly regulated Third World markets would make any one more prosperous; Summers wanted them open to U.S. firms.
The differences between them grew bitter in the late 1990s, when Stiglitz was chief economist for the World Bank and took issue with the way Treasury Secretary Robert Rubin, and Summers, who was then deputy secretary, were handling the Asian "contagion" financial collapse. After World Bank president James Wolfensohn declined to reappoint him in 1999, Stiglitz became convinced that Summers was behind the slight. Summers denies this...
As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.
Justin Fox in Time wrote the following before Summers appointment to Obama administration:
Summers was an awfully controversial guy a couple years ago. And the things that made him controversial will all be revisited if he has to sit through a Senate confirmation hearing.
Here's a quick run-through of the Sins of Larry:
1. He's a loose cannon. Summers has a long history of saying what's on his mind, regardless of whether others might find it offensive. The thing about women and science was only the most infamous. There was also that memo he signed about exporting toxic waste to the developing world. [..]
Still, Summers behaved perfectly respectably during his last stint as Treasury Secretary. He is capable of keeping his mouth shut if the job requires it. What's more, he seems to have a habit of promoting the careers of people who are willing to contradict him and take him on (Andrei Shleifer and Tim Geithner spring to mind). [..]
2. He's loyal, to a fault. One of the main things that turned Harvard's faculty against Summers was the case of his protege Shleifer. Shleifer ran a Harvard-affiliated, USAID-funded office in Moscow in the 1990s that advised the Russian government on economic reform. The U.S. government later sued Harvard and Shleifer, charging that the operation was overrrun by conflicts of interest. Summers recused himself from direct dealings with the case, but in his epic dissection of the saga for Instititutional Investor, David McClintick charged that Summers did try to shield Shleifer. Harvard and Shleifer lost the suit, and Harvard had to pay $26.5 million in damages and Shleifer $2 million. I can't get as worked up about this as some people (if we could force Harvard to give the government even more money, maybe Barack Obama wouldn't have to raise your taxes), but I also know and like Andrei Shleifer, so I'm really not the best judge.
3. He's a callous right-winger. Summers' academic mentor was conservative economist Marty Feldstein, and he worked for Feldstein at Ronald Reagan's Council of Economic Advisers in the early 1980s. Paul Krugman worked there too, so that really isn't saying much. For most of the 1980s, in fact, Summers was an outspoken skeptic of financial markets and their ability to set prices rationally and steer investment wisely. As he rose to positions of power in Washington in the 1990s, though, he became a leading defender of the Washington consensus--the idea that free financial markets, free trade and fiscal discipline would bring prosperity to the world. Lately Summers has been partially reconsidering that stance in his columns for the Financial Times. If you're favorably disposed to him, as I am, you could say he's been pulling a Keynes: "When the facts change, I change my mind." But I guess if you're not so favorably disposed, you could call him a closet right-winger, a closet left-winger, or a slave to fashion.
Anyway, I'm sure Larry Summers would make a very good Treasury Secretary. Again.
... ... ...
Update: Oh, and by the way, I forgot to gratuitously mention that he used to go out with Laura Ingraham ...
All who have worked with Larry know that he is completely incapable of being an honest broker. He is a bully. Its always his way or the highway. Here is one comment on his departure from "Bama" Whitehouser:
Summers only changes his mind if you argue from his worldview, that's why he is so often very wrong.
- Summers spent all of the 90's being completely wrong on climate change, because he wouldn't interpret evidence outside of his mental box.
- He was completely wrong on finance, with horrible results from the 90s deregulation, and did everything to ostracize people like Rajan who argued from a different perspective. Rajan had theory and data and was right, but Summers gave him the full mean girl treatment.
- He did not understand the finance risks, so he got Harvard in serious trouble.
- He shut Romer out of the stimulus debate, for reasons we aren't sure of, but she was, of course, right. And had the data and the theory completely on her side.
Summers shows again and again on the major decisions that he makes terrible judgments. Lots of people would be better at the job.
Nothing illustrates better this feature of Summers personality then the "Support of Andrei Shleifer" saga (see also Harvard Mafia, Andrei Shleifer and the economic rape of Russia)
From the article about Lawrence Summers in Wikipedia:
Also during his stint in the Clinton administration, Summers was successful in pushing for capital gains tax cuts.[citation needed] During the California energy crisis of 2000, then-Treasury Secretary Summers teamed with Alan Greenspan and Enron executive Kenneth Lay to lecture California Governor Gray Davis on the causes of the crisis, explaining that the problem was excessive government regulation.[8] Under the advice of Kenneth Lay, Summers urged Davis to relax California's environmental standards in order to reassure the markets.[9]Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act): "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Summers said.[10] "This historic legislation will better enable American companies to compete in the new economy."[10] Many critics, including President Barack Obama, have suggested the 2007 subprime mortgage financial crisis was caused by the partial repeal of the 1933 Glass-Steagall Act.[11]
Support of economist Andrei Shleifer
Harvard and Andrei Shleifer, a close friend and protege of Summers, settled a $26M lawsuit by the U.S. government over the conflict of interest Shleifer had while advising Russia's privatisation program. Summers' continued support for Shleifer strengthened Summers' unpopularity with other professors:
"I’ve been a member of this Faculty for over 45 years, and I am no longer easily shocked," is how Frederick H. Abernathy, the McKay professor of mechanical engineering, began his biting comments about the Shleifer case at Tuesday’s fiery Faculty meeting. But, Abernathy continued, "I was deeply shocked and disappointed by the actions of this University" in the Shleifer affair.
In an 18,000-word article in Institutional Investor (January, 2006), the magazine detailed Shleifer’s alleged efforts to use his inside knowledge of and sway over the Russian economy in order to make lucrative personal investments, all while leading a Harvard group, advising the Russian government, that was under contract with the U.S. The article suggests that Summers shielded his fellow economist from disciplinary action by the University.[21]
Summers' friendship with Shleifer was well known by the Corporation when it selected him to succeed Rudenstine and Summers recused himself from all proceedings with Shleifer, whose case was actually handled by an independent committee led by Derek Bok.
|
...rarely has one individual embodied so much of what is wrong with economics,
with academe, and indeed with the American economy. For the past two years, I have
immersed myself in those worlds in order to make a
film, Inside Job,
that takes a sweeping look at the financial crisis. And I found Summers everywhere
I turned. ... ... ... Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. This is now, literally, a billion-dollar industry. The Law and Economics Consulting Group, started 22 years ago by professors at the University of California at Berkeley (David Teece in the business school, Thomas Jorde in the law school, and the economists Richard Gilbert and Gordon Rausser), is now a $300-million publicly held company. Others specializing in the sale (or rental) of academic expertise include Competition Policy (now Compass Lexecon), started by Richard Gilbert and Daniel Rubinfeld, both of whom served as chief economist of the Justice Department's Antitrust Division in the Clinton administration; the Analysis Group; and Charles River Associates. In my film you will see many famous economists looking very uncomfortable when confronted with their financial-sector activities; others appear only on archival video, because they declined to be interviewed.
|
Over the past 30 years, the economics profession was not only compromised by conflicts of interests but outright bought. Bought in classic old fashion way. It just became a support group for financial oligarchy. This happens both due to dominance of neoliberal ideology ("greed is good") and also via straightforward (and sometimes pre-emptive) buy-out of leading economists by banks and brokerages via outrageously high "speaking fees" (although they are much less then then similar sleaking fees for politicians like Bill and Hillary Clinton), sinecure positions, and other inventive ways of transferring money into the pockets of selected academicians. Due to his close association with Rubin, Summers career provide almost classic example of this affect.
Revolving door style of corruption is probably dominant in the USA for former government officials and prominent economists. They do not took bribes. Instead the way "revolving door" mechanism works is that they are "awarded" lucrative positions in private companies which they regulated during government service after they leave the government service.
Which might well be even more damaging as for restriction of the ability to to act honestly the whole term of the government service. To need to "earn" your future positions, so to speak. While bribe restricts the ability to act dispassionately only from the point of accepting the bribe for the particular deregulation effort/deal/contract and mostly (often only) for the company which gave the bribe. Like is the case with the revolving door mechanism, this "incapacity" lasts till the the end of the government service. But it restrict the ability to act harshly with other companies, banks, brokerages only to the extent the person is afraid of disclosure and might even stimulate his to act harshly for competitors of particular company in order to protect himself from possible accusations in favoritism.
While his "achievements" in this area are probably less visible then, say, for Mankiw (who is mainly instrumental in brainwashing his students), they are were tremendously more damaging (from Wikipedia):
Paul Samuelson (Swedish Bank Prize)On October 19, 2006, he became a part-time managing director of the investment and technology development firm D. E. Shaw & Co.
Upon the death of his hero, libertarian economist Milton Friedman, Summers wrote an Op-Ed in The New York Times entitled "The Great Liberator" arguing that "any honest Democrat will admit that we are now all Friedmanites." Summers wrote that while Friedman made real contributions to monetary policy, his real contribution was "in convincing people of the importance of allowing free markets to operate."[25]
Henry Kissinger once said that Larry Summers should "be given a White House post in which he was charged with shooting down or fixing bad ideas." [26]
In 2006 he was a member of the Panel of Eminent Persons which reviewed the work of the United Nations Conference on Trade and Development.
He is currently the director of the White House National Economic Council[1][27].
Summers is Samuelson’s nephew. Is this significant in any way?
The Odyssey of Larry Summers - Megan McArdle
April 7, 2009 12:54 PMI generally agree with Megan is saying. However, Greg Mankiw did point out today that the NY Times claimed that Summers was doing consulting work for Taconic Capital while president of Harvard which does seems problematic and does weaken the apparent claim that DE Shaw was when Summers started cashing in in finance.
|
|
Switchboard | ||||
| Latest | |||||
| Past week | |||||
| Past month | |||||
 |
 |
 |
Mar 26, 2021 | www.unz.com
Mefobills , says: March 24, 2021 at 2:16 pm GMT • 12.2 hours ago
@onebornfree ertarianism is a cover and shield ideology for finance capitalism.It was free-market theory that made Russia succumb to the "Harvard Boys." And yes, the Harvard boyeez were the (((usual suspects))).
https://www.thenation.com/article/archive/harvard-boys-do-russia/
The privatization drive that was supposed to reap the fruits of the free market instead helped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy that has appropriated hundreds of millions of dollars of Western aid and plundered Russia's wealth.
|
|
|
Jan 20, 2021 | www.moonofalabama.org
passerby , Jan 20 2021 21:03 utc | 71
In the end, it's all about money. And the US has an army that costs more than can be plundered from the countries it occupies.
The US military costs about a trillion every year. There are no countries left to be conquered by the US where that kind of treasure can be looted.
|
|
|
Jan 02, 2021 | caucus99percent.com
..The only upshot of the Larry Summers interview is likely to be that maybe a few people will think that Joe Biden has bad people advising him, and the vast majority will either dislike Joe because he sucks or because they're Trumpies in their little faux rebellion or they will believe everything MSNBC et al. tell them about Joe Biden (and thus by extension they'll believe every word of Summers).
Here's the important lesson, the one that SHOULD be learned: Summers is a NEOLIBERAL. By this is meant that he is one of that group that believes that the proper role of government is to create and enforce markets and that ideally all functions of everyone's lives would be market functions.
The ultimate principle of neoliberalism, as pointed out in Chapter 2 of Kees van der Pijl's A Survey of Global Political Economy, is investor "freedom." This principle comes up on page 46 in the author's discussion of "microeconomics and rational choice theory." After having gone over the history of mainstream ("marginalist") economics as an "axiomatic" (which really means faith-based -- if you agree with its principles you might find it interesting) discipline, van der Pijl gets to neoliberalism. Here's what he says:
Importantly, the neoliberals no longer confine their prescriptions to the economy. They want economic rationality to be applied to all aspects of society; no organ of the social body may be allowed to function according to other principles than that of free choice by rational, self-interested individuals.
Ultimately, as van der Pijl notes in his discussion of Friedrich von Hayek (1899-1992), the standard-bearer of neoliberalism, neoliberalism is committed to investor freedom in all spheres of life. This is on page 48:
The core concept of neoliberalism is the notion of 'competitively determined freedom'. This concept of freedom is defined from the principle of privately disposable property of the means of production, secured by political institutions ensuring 'law and order'. Hayek later specified law and order as the foundations of private property as such, as freedom of contract and the coercive upholding of contracts (quoted in Walpen, 2004: 114-5).
Thus, if Larry Summers believes in this insane pile of twaddle, why would he want the government to send out $2000 checks? That wouldn't promote investor freedom.
(The further catch, of course, is that EVERYONE in DC, in Wall Street, and throughout the ruling elites of the world, believes in this insane pile of twaddle, and they've believed it for forty years now. So, in the same way in which Donald Trump was not an exceptional case responsible for the general insanity of last year's politics, Larry Summers is also not an exceptional case responsible for why you aren't getting $2,000 checks.)
The day after Christmas, the New York Times online ran a piece on the effects of climate change( "The Darkest Timeline," by Jonah Engel Bromwich ). It was basically about another paper, called "Deep Adaptation," which supposedly changed the course of a lot of people's lives. Bromwich says about the paper that:
The paper's central thought is that we must accept that nothing can reverse humanity's fate and we must adapt accordingly. And the paper's bleak, vivid details -- emphasizing that the end is truly nigh, and that it will be gruesome -- clearly resonated.
"When I say starvation, destruction, migration, disease and war, I mean in your own life," wrote the author, Jem Bendell. "With the power down, soon you wouldn't have water coming out of your tap. You will depend on your neighbors for food and some warmth. You will become malnourished. You won't know whether to stay or go. You will fear being violently killed before starving to death."
But you don't really adapt to climate change doom. You commit suicide in advance of the event. And it's hard to tell why a scientific paper, and not, say, the story of Paradise, California , would motivate people to say, geez, there isn't much point in living in a doomed society, so let's plan in advance. Or here's an alternative path: when confronted with the doom of the human race and of you, personally, you choose to believe in a pile of insane twaddle, and you say: billions for the rich , $600 for a few of the rest. Isn't that what Congress is doing now? To be sure, this is a sort of side-adventure, meant to contextualize neoliberals as the sort of people who say "oh boy! Profit!" when confronted with disastrous reality.
At any rate, neoliberalism. There are a bunch of books about neoliberalism. Probably the best place to start is with Naomi Klein's The Shock Doctrine , published in 2007. Klein makes clear what the enormous human costs are of neoliberal policy. The neoliberal method, Klein describes, is simple:
That is how the shock doctrine works: the original disaster – the coup, the terrorist attack, the market meltdown, the war, the tsunami, the hurricane – puts the entire population into a state of collective shock. The falling bombs, the bursts of terror, the pounding winds serve to soften up whole societies much as the blaring music and blows in the torture cells soften up prisoners. Like the terrorized prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect. (17)
It's your basic imperialism. David Harvey calls it "accumulation by dispossession"; his book, A Brief History of Neoliberalism , offers a good summary. I love the understatement at the beginning of the Google Books synopsis (linked):
Neoliberalism - the doctrine that market exchange is an ethic in itself, capable of acting as a guide for all human action - has become dominant in both thought and practice throughout much of the world since 1970 or so. Its spread has depended upon a reconstitution of state powers such that privatization, finance, and market processes are emphasized. State interventions in the economy are minimized, while the obligations of the state to provide for the welfare of its citizens are diminished.
"... has become dominant in both thought and practice throughout much of the world..." Yeah. That's like saying that European countries conquered much of Africa between 1870 and 1914. Uh-huh. It's good to appear innocuous when writing for publication!
Also meaningful are the writings of the French team of Gerard Dumenil and Dominique Levy. They've written a lot on the topic; the place to start would be Capital Resurgent . I haven't read this book in awhile. If I recall correctly, Dumenil and Levy argue that neoliberalism was a conscious choice of the elites, and that they could have chosen otherwise. But they didn't, and so here we are.
Those with an appetite for biting prose might enjoy Philip Mirowski's Never Let a Serious Crisis Go To Waste . Mirowski wants to chastise everyone -- the neoliberals for their "logic" (beautifully dissected), everyone else for misrecognizing the neoliberals and for pronouncing neoliberalism to be "dead" when in fact it's more dominant than ever.
There's an interesting foreign-policy take on neoliberalism in Kees van der Pijl's Global Rivalries from the Cold War to Iraq . Ostensibly a history of foreign relations, van der Pijl found himself obliged to discuss the history of neoliberalism because the history of foreign relations in the period after 1980 IS the history of neoliberalism.
Richard Cockett's Thinking the Unthinkable is a good early history of neoliberalism, from before the first meeting of the Mont Pelerin Society to its global triumph with Reagan and Thatcher.
All that having been said, it's amazing to find so many people online who think that "neoliberalism" is some esoteric phenomenon, or neoliberals who don't think they're neoliberals, or people who think there's no such thing as neoliberalism. You bring up neoliberalism and they say things like "I don't like labels." If you were to call a tree "green," would the tree respond by saying "I don't like labels"? We choose names for things because otherwise we wouldn't be able to talk about them in any serious sense.
Let's be clear. Today, "liberalism" might be this warm, fuzzy belief that government ought to give ordinary people a thing or two in addition to its usual duties of "national defense" (under the neoliberal regime this means wars for corporate profit) and "economic policy" (another giveaway to the rich). That's what the term "liberalism" came to mean in the US in the period after World War II. There's a longer and deeper meaning for the term "liberalism," and in that meaning it means what Adam Smith advocated, laissez-faire capitalism. The "neo" in "neoliberalism," to complete the definition, defines a form of liberalism in which it is viewed, by the neoliberals, as the duty of government to simulate laissez-faire capitalism by setting up markets and requiring people to participate in them. That's what neoliberalism is; that explains its NAME.
The classic neoliberal policy was the original "marketplace" function of the Affordable Care Act. The ACA was created to keep the insurance companies from pricing their product out of the market; the ACA obliged people to purchase health insurance (which, significantly, they still wouldn't be able to use in many ways) by setting up a "mandate penalty" in which non-purchasers would have to pay more in income taxes.
War for profit is a neoliberal initiative. Since the average consumer cannot purchase a war, the neoliberal government will step in to insure that there remains a market for war. Typically the wars serve to create enemies, which then sustain the war. Ultimately, what you see with neoliberal war is phenomena such as what was reported in Syria in 2016, in which militias funded by the CIA fought those funded by the Pentagon. It's fine as long as it moves product.
There shouldn't be any confusion, then, about neoliberalism as a ruling-class ideology. It has a well-defined meaning and plenty of examples to back up the notion that neoliberalism is a specific notion with specific beliefs, specific believers, specific policies, and a specific history.
It's your turn.
magiamma on Sat, 01/02/2021 - 5:20pm
ThanksCassiodorus on Sat, 01/02/2021 - 3:59pmWhere to start?
For neoliberals
the duty of government [is] to simulate laissez-faire capitalism by setting up markets and requiring people to participate in them.
And to "insure there is a market for war"
It's an enemy appropriate for this era.magiamma on Sat, 01/02/2021 - 5:19pm@magiamma Meanwhile over at Counterpunch:
Victor Jara's Hands: An Anti-Fascist Memoir-festo and Brief Personal History of Neoliberalism
See if you can acquire some Victor Jara -- good listening. And keep up the struggle! How is Keith McHenry doing these days? (at least we know he's not a neoliberal.) Have you visited the encampment in San Lorenzo Park of recent?
Food not bombsearthling1 on Sat, 01/02/2021 - 2:36pm@Cassiodorus
Is thriving.Not been to encampment but many I know are. Here are a couple of links.
https://www.santacruzsentinel.com/2020/12/30/activist-groups-earn-one-we...
https://www.santacruzsentinel.com/2020/12/28/santa-cruz-activists-halt-h...
It's a shit show. Changes daily.
Edit to add. Great article on Victor Jara. And song!
No human cost was too high to pay to usher in neoliberalism, to eviscerate the gains that labor had made under Allende's Popular Unity Coalition, and to maintain a steady flow of cheap copper, fruit and fish to the U.S. under the auspices of "trade liberalization." The new constitution passed under Pinochet's dictatorship rolled back the reforms instituted under Allende. It expanded the power of the presidency and enshrined private property and corporate profits over social needs; Pinochet rolled back taxes on corporations and the wealthy, and eliminated a host of government services. State-owned companies, public housing, education, health care, and pensions were all privatized, turned into profit centers for corporations and the wealthy. The constitution written under Pinochet limited reforms, and the gap today between rich and poor in Chile is one of the highest in Latin America.
Jara's version of the song "Venceremos" or "We Will Overcome," became the anthem of Allende's Popular Unity Coalition, and also figured centrally in eyewitness accounts of Jara's death.
Good piece, CassiodorusPuts a lot into perspective.
One could note that "Trickle Down Theory" got neoliberalism's foot in the door. And now it is fully inside emptying the fridge.
|
|
|
Jan 02, 2021 | www.mintpressnews.com
F ormer U.S. Treasury Secretary, Chief Economist of the World Bank, Director of the National Economic Council, and President of Harvard University, Lawrence Summers has warned against any implementation of a $2,000 COVID relief check.
Writing in business publication Bloomberg , the 66-year-old economist insisted that the proposal, which has drawn support from figures as diverse as Bernie Sanders and Donald Trump, was a "big mistake," as it would likely "overheat the economy." He noted that he did support strengthening social safety nets and other spending measures, but maintained that $2,000 was too much. "There is no good economic argument for the $2,000 checks," he confidently concluded.
Yet there are many reasons not to treat Summers as an infallible economic sage. Chief among them is his (major) role in causing the 2008 financial crisis that devastated the United States and much of the rest of the world.
During his time in the Department of the Treasury under President Clinton, Summers successfully lobbied for the repeal of the Glass-Steagall Act, a 60-year-old piece of legislation that separated commercial banking from the wild west of investment banking, insulating Americans' savings from the dangerous world of venture capitalism. He also pushed for increased deregulation of the finance system in general, setting the stage for an inevitable collapse. A paid consultant to Citigroup and other financial behemoths, he also later opposed efforts to break up the "too big to fail" banks after the crisis.
https://cdn.iframe.ly/D013WdX?v=1&app=1
This is perhaps not even Summers' most notorious moment, however. In 2000, the Governor of California Gray Davis (D), reached out to the then-Treasury Secretary for advice, suspecting that energy giant Enron was toying with the state's energy supply for profit, greatly increasing electricity prices even while power outages surged. Summers reportedly scoffed at his suspicions, patiently explaining that California's main problem was over-regulation and that he should allow Enron to operate more freely. One year later, Davis's suspicions were confirmed as Enron went bankrupt in a massive scandal that exposed the company as a Ponzi scheme.
Summers has always been a passionate believer in the magic of the free-market. While at the World Bank, he imposed austerity and trickle-down economics on a myriad of poor countries, while also infamously promoting the export of toxic waste from rich countries onto poor countries in Africa on economic grounds, suggesting that poor people's lives were worth less than those of the rich. "The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that," he wrote .
Summers also resigned from his position as President of Harvard in 2006 after a vote of no confidence from the university's faculty. This came in the wake of him attacking African-American professor Cornel West, claiming that his rap album was an "embarrassment" to the university. It appeared that the faculty found Summers' comments that women were inherently inferior in science and engineering, thus explaining the lack of female graduates and staff in those fields, to be more of an embarrassment, however. No doubt the wild financial risks he took with Harvard's endowment -- blunders estimated to have cost the university $1.8 billion -- did not help his cause, either.
Summers is not the only one in corporate media sounding the alarm about giving money to poor people. The Washington Post was so strongly against the idea that its board rushed out an editorial insisting that it was a "bad idea" pushed for political reasons, not economic ones, claiming that all it would achieve would be to "blow nearly half a trillion taxpayer dollars." Meanwhile, economist and New York Times columnist Paul Krugman warned that the checks would be "divisive," and that their economics "aren't very good." What "divisive" means in this context appears unclear, as a recent poll showed that 78% of Americans support the $2,000 checks. 57% "strongly support" them, while only 7% "strongly oppose" them.
The cost of the project, estimated by detractors at around $464 billion, is less than one-quarter of what the billionaire class has increased its wealth by in 2020. At the same time as the super-rich have been getting richer, however, ordinary Americans have been suffering. A September report noted that 56 million had been forced to use a food bank at some point, while 51 million Americans were made unemployed by July. A poll released Monday found that Americans rated 2020 to be the worst year in modern history. A $2,000 check at the end of it might have made some difference in their outlook, but if Summers has anything to do with it, that will not be coming their way at all.
Feature photo | Former U.S. Treasury secretary Lawrence Summers attends the meeting with Chinese Premier Li Keqiang during China Development Forum 2017 at Diaoyutai State Guesthouse, March 20, 2017 in Beijing. Etienne Oliveau | Pool via AP
Alan MacLeod is a Staff Writer for MintPress News. After completing his PhD in 2017 he published two books: Bad News From Venezuela: Twenty Years of Fake News and Misreporting and Propaganda in the Information Age: Still Manufacturing Consent . He has also contributed to Fairness and Accuracy in Reporting , The Guardian , Salon , The Grayzone , Jacobin Magazine , Common Dreams the American Herald Tribune and The Canary .
|
|
|
Dec 29, 2020 | www.zerohedge.com
Authored by Matt Taibbi via TK News
Lawrence Summers, the former Treasury Secretary under Bill Clinton, director of the National Economic Council under Barack Obama, president of Harvard, and Chief Economist at the World Bank, wrote a post-Christmas editorial for Bloomberg entitled, " Trump's $2000 Stimulus Checks are a Big Mistake ." It's a classic:
Some argue that while $2,000 checks may not be optimal support for the post-Covid economy, taking stimulus from $600 to $2,000 is better than nothing. They need to ask themselves whether they would favor $5,000, or $10,000 -- or more. There must be a limiting principle.
The genesis of this Summers article is a perfect tale in microcosm about how America's intellectual elite manages to lose elections to people like Donald Trump. It's a two-step error. First, they put people like Summers in charge of economic policies. Then, they let them talk in public.
Summers the day before Christmas appeared on Bloomberg to offer his initial thoughts on why $2000 checks must be bad: he looked at which politicians were supporting the plan, and worked backward. "When I see a coalition of Josh Hawley, Bernie Sanders and Donald Trump getting behind an idea, I think that's time to run for cover," he said, adding: "When you see the two extremes agreeing, you can almost be certain that something crazy is in the air."
https://platform.twitter.com/embed/index.html?dnt=false&embedId=twitter-widget-0&frame=false&hideCard=false&hideThread=false&id=1342173060955332609&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Fneoliberal-champion-larry-summers-opens-mouth-inserts-both-feet-taibbi&siteScreenName=zerohedge&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=550px
After delivering that cheery message, Summers got feces-pelted on the Internet:
https://platform.twitter.com/embed/index.html?dnt=false&embedId=twitter-widget-1&frame=false&hideCard=false&hideThread=false&id=1342264622833790976&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Fneoliberal-champion-larry-summers-opens-mouth-inserts-both-feet-taibbi&siteScreenName=zerohedge&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=550px
https://platform.twitter.com/embed/index.html?dnt=false&embedId=twitter-widget-2&frame=false&hideCard=false&hideThread=false&id=1342248609996107776&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Fneoliberal-champion-larry-summers-opens-mouth-inserts-both-feet-taibbi&siteScreenName=zerohedge&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=550px
https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=830
https://platform.twitter.com/embed/index.html?dnt=false&embedId=twitter-widget-3&frame=false&hideCard=false&hideThread=false&id=1342229765483331585&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Fneoliberal-champion-larry-summers-opens-mouth-inserts-both-feet-taibbi&siteScreenName=zerohedge&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=550px
Seeing that his comments "lit up the Twittersphere," Summers then sat down to compose an article doubling down on his reasoning. Essentially, he argued that from an econometric point of view, we're already overdoing it on the help front. If you were under the impression that huge numbers of people are living off meals from food banks and/or are at risk in an eviction crisis , you were wrong.
Noting that "total employee compensation" is "only running about $30 billion per month behind the Covid baseline," he insisted that $200 billion more in tax rebates per month over the next quarter would "equal an additional seven times the loss of household wage and salary income over the next quarter."
He then showed a graph explaining that "because of the legislation passed in 2020, total household income has exceeded normal levels relative to the economy's potential more or less since the pandemic began." The good news, as a result, is that "the existing stimulus bill is sufficient to elevate household income relative to the economy's potential to abnormally high levels -- unheard of during an economic downturn."
The whole piece reads like an extended New Yorker cartoon, in which an evictee with empty pockets is about to dive after a rotten apple core in a dumpster, only to be blocked by a cauldron-bellied Harvard economist in a $3000 Zegna suit. Caption: " Actually, total household income relative to the economy's potential sits at abnormally high levels ."
There are of course different positions one could take on the question of stimulus checks, but the issue with people like Summers is the utter predictability of their stances. Summers belongs to a club of neoliberal thinkers who've dominated American policy for decades. From Bob Rubin to Tim Geithner to Jason Furman to Michael Froman and beyond, the people one friend jokingly refers to as the "Rubino Crime Family" are all basically the same person, affectless technocrats who play up reputations as giant-brained intellectuals -- I always imagine them with bulbous Alien Nation heads -- while reveling in cold, hard truths about the limits of government assistance.
Read the rest here .
Lordflin 3 hours ago
yerfej 3 hours ago remove linkThe people are seen as cattle...
And this by an inbred group of gluttons who couldn't survive without the life they drain from others...
two hoots 1 hour agoThat is the key "the life they drain from others". I have no issue with those who work their aysses off keeping their just rewards, but this kind of insider filth needs a lamppost.
Doom Porn Star 1 hour agoSummers and those of his Jabba class know that uncontrolled Congressional giving could cause collateral damage to their lifestyles. So does every comfortable class below them. It all depends where you are positioned. Here on ZH i find people playing all sides of the class game to whatever suits their current mood of us/them others. The more an event can affect us directly determines where we direct our dislikes...up or down...inconsistently.
The_Dude 3 hours ago (Edited)ALL politicians and 'public servants' who advocateor demand lockdowns and restrictions should cede ALL pay, benefits and accrual of all retirement or other benefits for the duration of ANY lockdown or restriction of ANY kind.
Those who advocate or demand sacrificed should make first, fullest largest sacrifices.
The whole lot of fascist 'some animals are better than others' lot should be thrown in gitmo or equivalent.
Doom Porn Star 3 hours agoStudy what Summer's and his (((ilk))) did to pillage post - Soviet Russia and you will understand who is untouchable in this society... And why in more sophisticated societies, they were always kept at the periphery where they couldn't harm others.
https://www.thenation.com/article/archive/harvard-boys-do-russia/
BlueLightning 3 hours agoLarry 'Dinner with Epstein' Summers has put more than his foot in his mouth.
sgt_doom 2 hours ago (Edited)O boy he's scared now
Arising 2.0 2 hours ago (Edited)Isn't Larry Summers the chief poster boy of the Global Banking Cartel ever since he inserted the credit derivatives clause in the WTO's Financial Services Agreement*** making it acceptable legal tender?
Believe that was during the Clinton Administration.
Is Larry still a lobbyist for the cental bankers? Oh yes, his photo is still there:
***[Credit to Greg Palast for uncovering this item.]
iambrambles 3 hours agoLarry is a cabal member who has always been out of touch with the 'silly goy'.
ElTerco 2 hours ago (Edited) remove linkThe real question is why trillions to foreign govs and corporations.
$2000/American is chump change and isnt what anyone should be focusing on.
America never had the right fiscal priorities, people tend to forget the brilliance of the US was with the constitution that enabled more freedoms than before.
But fiscally, America was always doomed after the absolution of the gold standard and the creation of the federal reserve which allowed for endless government largesse.
ElTerco 2 hours ago (Edited)"negative consequences of aid to the less fortunate..."
Yet, no mention from Larry of negative consequences of aid to the more fortunate, which, so far this year, has been around 40x as much money.
Max21c 2 hours ago (Edited) remove linkThe $10+ trillion that has been pumped into the US economy so far has been a firehose to top earners, while people who lost their jobs got a trickle of runoff as it worked its way down the street through a very long, crap filled gutter.
Funny how Summers never mentioned *that*.
Max21c 1 hour ago (Edited)"When I see a coalition of Josh Hawley, Bernie Sanders and Donald Trump getting behind an idea, I think that's time to run for cover," he said, adding: "When you see the two extremes agreeing, you can almost be certain that something crazy is in the air."
Thus is just more elitist nonsense from the silly conventional wisdom of Washingtonians, elites, and the Democratic Party establishment. Bernie Sanders was a solid and strong and energetic candidate and he could have had a chance of beating Trump in a free & fair election had the Party nomination not been fixed and stolen from him by elites and their puppet press smear campaigns.
Democrats made a mistake in attacking and undermining Bernie Sanders. Since much of what has transpired this past year has been massive increases in domestic spending and some social spending. Bernie Sanders could have beat Trump--fair and square--whereas the Crats had to cheat with Biden and steal the election. Had the Democratic Party not stolen the election from Sanders it likely Sanders would have had a significant opportunity to beat Trump. Since Sanders was positioned right/correctly to be competitive in contrast and have some edge with a significant part of the public on peace, foreign policy, domestic policy, and social spending agendas. Would have been a tight race with Sanders versus Trump instead of the fraud and fraudulent election of 2020. Definitely would have been a tossup on balance. Would have been even harder if Sanders had teamed with Tulsi Gabbard as they would have had a serious edge in foreign policy. But both Sanders and Gabbard are official pariahs and lepers in the Democratic Party and its establishment as well as in the Washington establishment. Sanders had the issues and would have had the momentum to give Trump a serious run for the money had he not be forced aside in favor of the establishment candidate in a series of rigged primaries and media smear campaigns and other subterfuge & Machavellian intrigues.
Bay Area Guy 2 hours ago remove linkI don't have issue with the size of company but do not like state sponsored industry whereby the state security apparatus heavily favors state industries and state sponsored industries--and--the secret police community and intelligence community and political class ensure that the statals/SEO and state backed companies are protected by the state security apparatus... The government doesn't have any business being used by Washingtonians, JudeoWASP elites, Ivy Leaguers and their secret police to using military warmaking powers in the secret police and intelligence community to rob one and redistribute back to state industries and state sponsored industries and favor elites and their firms using secret police powers... That's what both the Bolsheviks and Nazis did... It's the banana republoc and police state and tyranny...
The socialism Bernie was talking about seemed more his advocating for increases in social spending. The socialism Washington currently practices both openly and secretively & covertly and illegally through abuses of secret police powers and state secrecy is much more dangerous than what Bernie was advocating. The current socialist system as practiced by Washingtonians and their secret police does much more damage to the country. The police state socialism is much worse than the social spending games.
Max21c 2 hours ago remove linkLOL. How do you overheat a dead economy? No real growth (inflation adjusted) in at least 20 years; real unemployment at least 12.5% and probably north of 20%; this DESPITE interest rates at all time lows and likely to go negative. And this fool is talking about overheating the economy.
If they can handout hundreds of billions to businesses under a questionable government to business subsidy program that has been previously fraught with fraud, inefficiencies in timeliness & appropriateness and geographical distribution. Also, such government to biz programs which shall likely fail to serve both business and the economy effectively both by practice and natural elements: such as some businesses being located in areas with a more sophisticated biz culture; and set of skills; as well as access to better educated & possibly more skillful entrepreneurs and cultures thereof; as well as some firms being simply better positioned; as well as some firms being more program wise or welfare wise; and still other firms being better tuned in or connected to the political system and or its bureaucracy. Given the afore situation the money is better spent on a basis of widely scattered and unpredictable et uncontrollable and thus not as apt to manipulation as well as a direct to households holding the advantage of timeliness.
About 4k is about right for the floor/minimum on the basis of 2k in the form of a stimulus and another matching 2k+ coming from forwarded tax rebates for future years which can be paid back through payroll deductions or which can be paid back similar to installment loans monthly or quarterly.
2k shall suffice in the near term as to stimulating consumer spending, consumer confidence, business confidence, sales & revenues & profits or the improvement in the outlook of a future return to profitability and the confidence & risks taking that comes with firms seeking current and future profits and potentially making investments and pursuing loans and the potential for an earlier uptick in the credit cycle as banks may change their outlook on lending sooner than they might otherwise.
|
|
|
Dec 27, 2020 | www.nakedcapitalism.com
Summers' second big problem is the scandal that led to his ouster at Harvard, which was NOT his infamous "women suck at elite math and sciences" remarks. The university has conveniently let that be assumed to be the proximate cause.
In fact, it was Summers' long-standing relationship with and protection of Andrei Shleifer, a Harvard economics professor, who was at the heart of a corruption scandal where he used his influential role on a Harvard contract advising on Russian privatization to enrich himself and his wife, his chief lieutenant Jonathan Hay, and other cronies. The US government sued Harvard for breach of contract and Shleifer and Hay for fraud and won. This section comes from a terrifically well reported account in Institutional Investor by David McClintick :
The judge determined that Shleifer and Hay were subject to the conflict-of-interest rules and had tried to circumvent them; that Shleifer engaged in apparent self-dealing; that Hay attempted to "launder" $400,000 through his father and girlfriend; that Hay knew the claims he caused to be submitted to AID were false; and that Shleifer and Hay conspired to defraud the U.S. government by submitting false claims.
On August 3, 2005, the parties announced a settlement under which Harvard was required to pay $26.5 million to the U.S. government, Shleifer $2 million and Hay between $1 million and $2 million, depending on his earnings over the next decade. Shleifer was barred from participating in any AID project for two years and Hay for five years. Shleifer and Zimmerman were required by terms of the settlement to take out a $2 million mortgage on their Newton house. None of the defendants acknowledged any liability under the settlement. (Forum Financial also settled its lawsuit against Harvard, Shleifer and Hay under undisclosed terms.
And while Harvard can't be held singularly responsible for the plutocratic land-grab in Russia, the fact that its project leaders decided to feed at the trough sure didn't help:
Reinventing Russia was never going to be easy, but Harvard botched a historic opportunity. The failure to reform Russia's legal system, one of the aid program's chief goals, left a vacuum that has yet to be filled and impedes the country's ability to confront economic and financial challenges today.
And while Summers was not responsible for Shleifer getting the contract, he was a booster and later protector of Shleifer:
Summers wasn't president of Harvard when Shleifer's mission to Moscow was coming apart. But as a Harvard economics professor in the 1980s, a World Bank and Treasury official in the 1990s, and Harvard's president since 2001, Summers was positioned uniquely to influence Shleifer's career path, to shape US aid to Russia and Shleifer's role in it and even to shield Shleifer after the scandal broke. Though Summers, as Harvard president, recused himself from the school's handling of the case, he made a point of taking aside Jeremy Knowles, then the dean of the faculty of arts and sciences, and asking him to protect Shleifer.
And the protection Shleifer got was considerable:
Knowles tells Institutional Investor that he does not remember Summers' approaching him about Shleifer However, not long after Summers says he intervened on the professor's behalf, Knowles promoted Shleifer from professor of economics to a named chair, the Whipple V.N. Jones professorship.
Shleifer's legal position changed on June 28, 2004, when Judge Woodlock ruled that he and Hay had conspired to defraud the U.S. government and had violated conflict-of-interest regulations. Still, there was no indication that the Summers administration had initiated disciplinary proceedings. To the contrary, efforts were seemingly made to divert attention from the growing scandal. The message from the top at Harvard was, "No problem -- Andrei Shleifer is a star," says one senior Harvard figure
One instance was a meeting early in the academic year that began in September 2004, less than two months after the federal court formally adjudicated Shleifer's liability for conspiring to defraud the U.S. government. A faculty member asked [Dean] Kirby why Harvard should defend a professor who had been found liable for conspiring to commit fraud. The second confrontation came early in the current academic year when another professor asked Kirby why Harvard should pay a settlement of $26.5 million and legal fees estimated at between $10 million and $15 million for legal violations by a single professor and his employee, about which it was unaware. On both occasions Kirby is said to have turned red in the face and angrily cut off discussion.
On at least one other occasion, Summers himself told members of the faculty of arts and sciences that the millions of dollars that Harvard paid in damages did not come from the budget of the faculty of arts and sciences, but didn't say where the money came from. Those listening inferred he meant that the matter shouldn't be of concern to the faculty and that they shouldn't raise it, a curious notion, given that Shleifer was one of their own
Shleifer has never acknowledged doing anything wrong. Summers has said nothing. And so far as is known, there has been no internal investigation or sanction. "An observer trying to make sense of the University's position on Shleifer, Ogletree and Tribe is driven to an unhappy conclusion. Defiance seems to be a better way to escape institutional opprobrium than confession and apology. . . . And most of all being a close personal friend of the president probably does one no harm."
But for the faculty, which had already had frictions with Summers, the Russia scandal was the final straw. Copies of the Institutional Investor article were stuffed in the mailbox of every faculty member the morning of the no-confidence vote that forced Summers' resignation .
And that's before we get to Summers' role in the ouster of Brooksley Born over credit default swaps and in supporting the passage of Gramm–Leach–Bliley and the repeal of Glass Steagall (admittedly so shot full of holes at that point as to be close to a dead letter, but still necessary to allow Traveler and Citigroup to merge). Yet Summers has refused to recant any of these actions .
Procopius , December 25, 2020 at 4:08 am
The link to the excellent Institutional Investor article took me to a "page not found" page (oddly, not a 404 Error page). The link in my bookmarks is https://www.institutionalinvestor.com/article/b150npp3q49x7w/how-harvard-lost-russia
|
|
|
Dec 27, 2020 | www.nakedcapitalism.com
Larry Summers' Opposition to $2000 Covid Payments Confirms Our Classic: "Why Larry Summers Should Not Be Permitted to Run Anything More Important than a Dog Pound" Posted on December 25, 2020 by Yves Smith
Unfortunately, it looks like Larry Summers will always be with us:
https://platform.twitter.com/embed/index.html?creatorScreenName=yvessmith&dnt=false&embedId=twitter-widget-0&frame=false&hideCard=false&hideThread=false&id=1342191899885654019&lang=en&origin=https%3A%2F%2Fwww.nakedcapitalism.com%2F2020%2F12%2Flarry-summers-opposition-to-2000-covid-payments-confirms-our-classic-why-larry-summers-should-not-be-permitted-to-run-anything.html&siteScreenName=yvessmith&theme=light&widgetsVersion=ed20a2b%3A1601588405575&width=550px
Or as reader Doug put it:
Mr. Summers,
The particular temperature of the economy is -- and this will quite obviously come as a bit of a shock to you -- of no importance right now.
People are suffering.
I realize in using the word "people", I am alluding to a phenomenon that is not in your vocabulary or data set.
But, then, you are a grade A asshole.
Indeed, you are just as much a sociopath as Dear Leader DJT
You ought to seek help before it is too late.
At best, Summers' boneheaded remark shows that he is aggressively defending Joe Biden's views. Recall that David Sirota recently translated the New York Times' reporting on Biden's intervention in the stimulus bill as Biden's Austerity Zealotry Helped Cut The Stimulus Bill In Half :
Now, in the whittling down of the stimulus legislation, we see the first concrete example of how Biden's ideology can change policy in the here and now -- and in deeply destructive ways.
As pain and suffering is crescendoing across the country, Biden refrained from aggressively pushing the bipartisan initiative for $1,200 survival checks. Indeed, at a time when there was a legitimate chance to flip some Republicans -- including Donald Trump! -- against McConnell and push for a more robust stimulus, he demurred.
However, the New York Times reminds us today that Biden was "not an idle bystander in the negotiations." On the contrary, the paper of record tells us that the president-elect played a decisive role in making sure the legislation was cut in half.
For those of you not well versed in Summers' sorry record, this post might fill in some gaps.
This post first ran on July 22, 2013
I've been gobsmacked to see that not only is Larry Summers on various short lists of candidates to become the next Fed chairman, but that Summers is also supposedly closing in on the favorite, Janet Yellen.
In early 2012, Summers was lobbying hard to become the head of the World Bank and didn't get the nod. The fact that he is now under consideration for a bigger job should set alarm bells off. While Paul Krugman weighs in on both, concluding that Yellen would be the better pick, he's still far kinder to Summers than the Harvard economist deserves.
The big problem with Summers is not his record on deregulation (although that's bad enough) or his foot-in-mouth remarks about women in math, or for suggesting that African countries would make for good toxic waste dumps . No, it's his appalling record the one time he was in an executive position, as president of Harvard. Summers was unquestionably the worst leader in Harvard's history.
Summers, unduly impressed with his own economic credentials, overruled two successive presidents of Harvard Management Corporation (the in-house fund management operation chock full of well qualified and paid money managers that invest the Harvard endowment). Not content to let the pros have all the fun, Summers insisted on gambling with the university's operating funds, which are the monies that come in every year (tuition and board payments, government grants, the payments out of the endowment allotted to the annual budget). His risk-taking left the University with over $2 billion in losses and unwind costs and forced wide-spread budget cuts, even down to getting rid of hot breakfasts. The Boston Globe provided an overview :
It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard's endowment, and Lawrence Summers, then the school's president, would face off in a heated debate. The topic: cash and how the university was managing – or mismanaging – its basic operating funds.
Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment's risky mix of stocks, bonds, hedge funds, and private equity. Meyer's successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members.
"Mohamed was having a heart attack,'' said one former financial executive .
In the Summers years, from 2001 to 2006, nothing was on auto-pilot. He was the unquestioned commander, a dominating personality with the talent to move a balkanized institution like Harvard, but also a man unafflicted, former colleagues say, with self-doubt in matters of finance.
Now Harvard had put some of its large operating budget at risk in speculative investments starting in the 1980s, but Summers ramped it up to a completely new level. Again from the Globe:
The very thing that the former endowment chiefs had worried about and warned of for so long then came to pass. Amid plunging global markets, Harvard would lose not only 27 percent of its $37 billion endowment in 2008, but $1.8 billion of the general operating cash – or 27 percent of some $6 billion invested. Harvard also would pay $500 million to get out of the interest-rate swaps Summers had entered into, which imploded when rates fell instead of rising. The university would have to issue $1.5 billion in bonds to shore up its cash position, on top of another $1 billion debt sale. And there were layoffs, pay freezes, and deep, university-wide budget cuts
Without overburdening you with detail on the swaps that blew up Summers' piggy bank (see this Bloomberg story for the particulars) let there be no doubt that Summers signed up to be a chump to Wall Street. As Epicurean Dealmaker remarked when the Bloomberg expose came out (emphasis ours):
Now forward swaps, or forward start swaps -- which behave like normal swaps except the offsetting fixed and floating rate payments are scheduled to start at a date certain in the future -- by themselves count as little more than rank interest rate speculation, specifically in this instance as a bet that short-term interest rates will rise in the future. They can make a great deal of sense when an issuer intends to sell bonds in the relatively near future and when the issuer wants to hedge against budgetary uncertainty by converting floating rate obligations into fixed rate debt. That being said, I have rarely encountered a corporate client who feels confident enough about both their absolute funding needs and current and impending market conditions to enter into a forward swap starting more than nine months into the future. Entering into a forward start swap for debt you do not intend to issue up to 20 years in the future sounds like either rank hubris or free money for Wall Street swap desks.
So Summers couldn't keep his ego out of the way, bullied the people around him, ignored the advice of not one but two presidents of Harvard Management, and left a smoldering pile of losses in his wake. And serious adults are prepared to allow someone with so little maturity and such misplaced self confidence to have major sway over much bigger economic decisions?
Summers' second big problem is the scandal that led to his ouster at Harvard, which was NOT his infamous "women suck at elite math and sciences" remarks. The university has conveniently let that be assumed to be the proximate cause.
In fact, it was Summers' long-standing relationship with and protection of Andrei Shleifer, a Harvard economics professor, who was at the heart of a corruption scandal where he used his influential role on a Harvard contract advising on Russian privatization to enrich himself and his wife, his chief lieutenant Jonathan Hay, and other cronies. The US government sued Harvard for breach of contract and Shleifer and Hay for fraud and won. This section comes from a terrifically well reported account in Institutional Investor by David McClintick :
The judge determined that Shleifer and Hay were subject to the conflict-of-interest rules and had tried to circumvent them; that Shleifer engaged in apparent self-dealing; that Hay attempted to "launder" $400,000 through his father and girlfriend; that Hay knew the claims he caused to be submitted to AID were false; and that Shleifer and Hay conspired to defraud the U.S. government by submitting false claims.
On August 3, 2005, the parties announced a settlement under which Harvard was required to pay $26.5 million to the U.S. government, Shleifer $2 million and Hay between $1 million and $2 million, depending on his earnings over the next decade. Shleifer was barred from participating in any AID project for two years and Hay for five years. Shleifer and Zimmerman were required by terms of the settlement to take out a $2 million mortgage on their Newton house. None of the defendants acknowledged any liability under the settlement. (Forum Financial also settled its lawsuit against Harvard, Shleifer and Hay under undisclosed terms.
And while Harvard can't be held singularly responsible for the plutocratic land-grab in Russia, the fact that its project leaders decided to feed at the trough sure didn't help:
Reinventing Russia was never going to be easy, but Harvard botched a historic opportunity. The failure to reform Russia's legal system, one of the aid program's chief goals, left a vacuum that has yet to be filled and impedes the country's ability to confront economic and financial challenges today.
And while Summers was not responsible for Shleifer getting the contract, he was a booster and later protector of Shleifer:
Summers wasn't president of Harvard when Shleifer's mission to Moscow was coming apart. But as a Harvard economics professor in the 1980s, a World Bank and Treasury official in the 1990s, and Harvard's president since 2001, Summers was positioned uniquely to influence Shleifer's career path, to shape US aid to Russia and Shleifer's role in it and even to shield Shleifer after the scandal broke. Though Summers, as Harvard president, recused himself from the school's handling of the case, he made a point of taking aside Jeremy Knowles, then the dean of the faculty of arts and sciences, and asking him to protect Shleifer.
And the protection Shleifer got was considerable:
Knowles tells Institutional Investor that he does not remember Summers' approaching him about Shleifer However, not long after Summers says he intervened on the professor's behalf, Knowles promoted Shleifer from professor of economics to a named chair, the Whipple V.N. Jones professorship.
Shleifer's legal position changed on June 28, 2004, when Judge Woodlock ruled that he and Hay had conspired to defraud the U.S. government and had violated conflict-of-interest regulations. Still, there was no indication that the Summers administration had initiated disciplinary proceedings. To the contrary, efforts were seemingly made to divert attention from the growing scandal. The message from the top at Harvard was, "No problem -- Andrei Shleifer is a star," says one senior Harvard figure
One instance was a meeting early in the academic year that began in September 2004, less than two months after the federal court formally adjudicated Shleifer's liability for conspiring to defraud the U.S. government. A faculty member asked [Dean] Kirby why Harvard should defend a professor who had been found liable for conspiring to commit fraud. The second confrontation came early in the current academic year when another professor asked Kirby why Harvard should pay a settlement of $26.5 million and legal fees estimated at between $10 million and $15 million for legal violations by a single professor and his employee, about which it was unaware. On both occasions Kirby is said to have turned red in the face and angrily cut off discussion.
On at least one other occasion, Summers himself told members of the faculty of arts and sciences that the millions of dollars that Harvard paid in damages did not come from the budget of the faculty of arts and sciences, but didn't say where the money came from. Those listening inferred he meant that the matter shouldn't be of concern to the faculty and that they shouldn't raise it, a curious notion, given that Shleifer was one of their own
Shleifer has never acknowledged doing anything wrong. Summers has said nothing. And so far as is known, there has been no internal investigation or sanction. "An observer trying to make sense of the University's position on Shleifer, Ogletree and Tribe is driven to an unhappy conclusion. Defiance seems to be a better way to escape institutional opprobrium than confession and apology. . . . And most of all being a close personal friend of the president probably does one no harm."
But for the faculty, which had already had frictions with Summers, the Russia scandal was the final straw. Copies of the Institutional Investor article were stuffed in the mailbox of every faculty member the morning of the no-confidence vote that forced Summers' resignation .
And that's before we get to Summers' role in the ouster of Brooksley Born over credit default swaps and in supporting the passage of Gramm–Leach–Bliley and the repeal of Glass Steagall (admittedly so shot full of holes at that point as to be close to a dead letter, but still necessary to allow Traveler and Citigroup to merge). Yet Summers has refused to recant any of these actions .
So with this record, it's hard to watch Paul Krugman yet again tarnish his good reputation endorsing , even in a careful way, a colossally failed proposition like Larry Summers (Krugman put both Yellen and Summers in the "I know and admire" category). Take that back. Summers is your man if you are a banker, looter, or plutocrat.
But given that (per the Ron Suskind book Confidence Men), Obama increasingly couldn't abide Summers, and Obama wouldn't nominate Summers for the less influential World Bank position, one has to wonder why his name is suddenly being bruited about as a strong contender for the Fed chair. It may simply be the dint of Summers' PR efforts.
But I worry another play is afoot. As much as Yellen and Summers are expected to take largely similar postures on monetary policy, Yellen is anticipated to be less of a bank booster than Summers. So Wall Street is likely to be pushing Summers' candidacy. But the real play may be that the insiders know that Summers won't hold up well under protracted scrutiny, and at a late date, Timothy Geithner will be pushed to the fore. I can only hope that Geithner (due to his lack of monetary economy chops) won't be seen as an acceptable alternative, but I would not bet on being so lucky.
|
|
|
Nov 30, 2020 | www.moonofalabama.org
Avid Lurker , Nov 30 2020 1:18 utc | 73
@ karloft1 @ 55 & 65
The dubious wunderkind Sachs and his economic ilk intentionally fostered the plunder of Russia under Yeltsin:
Now Sachs, an economist parroting syllogistic science falsehoods, now pontificates about matters, once again, that he has a tenuous grasp of ... at best. For a compelling counter-argument to Sachs' scientific schlock see:
The COVID-19 RT-PCR Test: How to Mislead All Humanity. Using a "Test" To Lock Down Society/
|
|
|
Oct 26, 2020 | www.moonofalabama.org
james , Oct 25 2020 0:16 utc | 35
@ 26 eric... thanks... unfortunately it seems michael hudson hasn't really commented on russia in any significant way unless one goes back 5 years or so... i wonder how things have changed since?? here is a link to the articles that top up using russia as the search term - https://michael-hudson.com/?s=russiaoldhippie , Oct 25 2020 3:49 utc | 49i enjoyed the paul craig roberts - michael hudson article from 2019 on pcr's website... again, i am not informed enough to make an informed comment on pcr's conclusions from march of 2019... he and however much of the article hudson contributed - might be exactly right, especially in the conclusions of the 3rd to last paragraph in the article.. i don't know... thanks for the ongoing conversation..
@ Jen | Oct 24 2020 23:04 utc | 29 / 31.. thanks jen.. i haven't been to marks website in a long time! i recall moscow exile.. is he still posting their?? regarding central banks and nabiullina the head of russias central bank... i am not sure how many know this but the position of being the head of a central bank in any country is not a position that is decided upon by the country itself, or at least not in any democratic way... and the country is supposed to not get involved in the politics of it either as i understand it... instead these people are suggested in some other way - not elected - and while they do have to work with the political leadership - they can't be gotten rid of easily as i understand it.. i think a lot of this has to do with the way the international institutions work and how if a country wants to be a part of this same international system of money, they need to accept the structure as it is opaquely set up as... thus the central banks are under specific guidelines that they have to follow that comes from somewhere outside the actual country.... i would love someone to correct me on all this, but it is my present understanding of how this particular system works... https://en.wikipedia.org/wiki/Central_bank
As for what happened in Russia during the breaking up of the USSR and the transition of Russia during the 1990's - one could argue the agenda of the Harvard plan for Russia was to exploit russia for it's resource rich territory and install people like Yletsin who would happily go along with this madness..
Just how much this changed is partly witnessed in the life of bill browder - a person well known to most here... so, clearly russia made changes to try to protect itself from the encouraged kleptocracy that was in full swing in the early 1990s ... just how much they have managed to ween themselves off private finance - i have no idea... it sounds like they are in the same boat as the rest of the planet in being beholden to private finance....
Of course private verses public finance is a confusing topic that keeps on getting revisited here at moa and for good reason... i don't really know how all this interfaces with everything else.. i appreciate erics particular vantage and am curious to hear of others viewpoint as well.. thanks jen.. i have some other comments to read now on this topic from H.Schmatz @ 28
James @ 35james , Oct 25 2020 4:42 utc | 51You mention Bill Browder. He is the grandson of Earl Browder, General Secretary of the Communist Party USA from 1930-1945. It is now freely admitted that Earl was always in the employ of the FBI. Bill simply continues the family business, which is Get Russia. The odds that Bill is an independent actor and is not working for .gov are same as odds that Easter Bunny is real.
... ... ..H.Schmatz , Oct 25 2020 11:33 utc | 63@ old hippie... yes, i was aware of that - thanks.. if you haven't seen it yet - the movie the Russian guy made on Browder is quite good - worth the watch, but i think you have to pay for it now.. there was a time where you could watch it for free... yes indeed, the son worked or works for the same folks as the father did...here is a link to the movie.. http://magnitskyact.com/
here is an interesting link that i found just looking for a link to the movie... if you haven't watched the movie, this is a good start and covers it from a particular angle..
https://www.youtube.com/watch?v=DOx78CBq0CkEarl Browder was an interesting dude who led an interesting life..
I have not yet read the whole transcript of Putin´s long intervention in the Valdai Discussion Club, and thus, I do not know how deep he went about last frenzy on "regime change" intends in the post-Soviet space, but in case he did not put it clear enough, background of the recent explosions of regime change intends in countries surrounding Russia ( Spoiler: it was all there in a 2019 Reand Corporation file...)
|
|
|
Oct 26, 2020 | www.moonofalabama.org
Alicia , Oct 24 2020 22:21 utc | 24
SEPTEMBER 17, 2020Interview on Radio Voice America
Welcome back to Turning Hard Times into Good Times. I'm your host Jay Taylor. I'm really pleased to have with me once again Dmitry Orlov.
Dmitry was born and grew up in Leningrad, but has lived in the United States. He moved here in the mid-seventies. He has since gone back to Russia, where he is living now.
But Dmitry was an eyewitness to the Soviet collapse over several extended visits to his Russian homeland between the eighties and mid-nineties. He is an engineer who has contributed to fields as diverse as high-energy Physics and Internet Security, as well as a leading Peak Oil theorist. He is the author of Reinventing Collapse: The Soviet Example and American Prospects (2008) and The Five Stages of Collapse: Survivors' Toolkit (2013).
Welcome, Dmitry, and thank you so much for joining us again.
A: Great to be on your program again, Jay.
Q: It's really good to hear your voice. I know we had you on [the program] back in 2014. It's been a long time -- way too long, as far as I'm concerned. In that discussion we talked about the five stages of collapse that you observed in the fall of the USSR. Could you review them really quickly, and compare them to what you are seeing, what you have witnessed and observed in the United States as you lived here, and of course in your post now in Russia.
A: Yes. The five stages of collapse as I defined them were financial, commercial, political, social and cultural. I observed that the first three, in Russia. The finance collapsed because the Soviet Union basically ran out of money. Commercial collapse because industry, Soviet industry, fell apart because it was distributed among fifteen Soviet socialist republics, and when the Soviet Union fell apart all of the supply chains broke down.
Political collapse: obviously there wasn't really a functional government at all for a period of time in the nineties. Lots of American consultants running around and privatizing things in a fashion that created a lot of incredibly corrupt, super-rich oligarchs who then fled with their money, a lot of them.
Surprisingly, social and cultural collapse didn't really get very far until Russia started regaining its health. Some of the other Soviet socialist republics are in the throes of full-on social and cultural collapse, but Russia avoided this fate.....
http://cluborlov.blogspot.com/2020/09/interview-on-radio-voice-america.html
|
|
|
Oct 26, 2020 | www.moonofalabama.org
Eric , Oct 24 2020 21:10 utc | 18
... ... ...
The goal of this movement is ending nation states to end their influence, laws and regulations, and thus try to dynamite, through sowing divide ( and in this they are helped by alleged opponent Soros and his network of franchises mastering regime change, color revolutions
Blunt coups d´etat and lately "peaceful transitions of power", being both, Soros and the NRx, connected to the CIA...)countries with which make what they call "The Mosaic" of regions resulting, at the head of which there will be a corporation CEO and their stakeholders in a hierarchical autocratic order. These people think that Democracy simply does not work and thus must be finished, and that there are people ( white, of course ) who have developed a higher IQ ( at this poin
t I guess some of you have noticed this creed sound very familiar to you, from our neighbors here by the side at SST, where "james" and Pat lately love each other so much...) and must rule over the rest.
To achieve their goals, these people, as geeks from Silicon Valley, are willing to cross the human frontier to transhumanism so as to enhance their human capabilities to submit the rest...
Wondering why this topic have never been treated at MoA...nor at the Valdai Discussion Club...
The Alt-Right and the Europe of the Regions. According to Wikipedia, Steve Bannon is inspired by the theorist Curtis Yarvin ( https://es.m.wikipedia.org/wiki/Ilustration_oscura), who states that countries should be divided into feudal areas in the hands of corporations (Patchwork).https://twitter.com/andrei_kononov/status/1126684073009639425
H.Schmatz , Oct 24 2020 23:01 utc | 28
@
|
|
|
Sep 25, 2020 | www.moonofalabama.org
gepay , Sep 22 2020 19:44 utc | 11
As Putin has said, the US is no longer agreement capable. As b. outlines. the US elites no longer follow the rule of law. This is even true within the US. The US inherited the role formerly played by the British Empire after WW2.The national security apparatus of both the US and the Soviet Union kept the Cold War going. Notice how soon after JFK was assassinated Khrushchev was deposed. Gorbachev rightly stopped the Soviets superpower regime. As Dmitri Orlov points out - Empire hollowed out the Soviet Union and he sees it doing the same to the US.
Instead of bringing Russia into the Western liberal democracies (with the threat of major nuclear war now drastically reduced) the now Anglo-Zionist Empire just looted it. The life expectancy of Russians fell 7 years in a decade until rescued by Putin.
It can now be seen that the Nixon-Kissinger opening up to China was not to gain access to its large market potential but to gain access to hundreds of millions of cheap, disciplined, and educated workers. The elites starting in the 70s became greedier. Jet travel,electronic communication, and computers allowed the outsourcing of manufacture.
The spread of air conditioning allowed even the too hot south to be a location. First in the US as the factories began their march through the non union southern states onto Mexico. Management from the north could now live in air conditioned houses, drive air conditioned cars and work in air conditioned offices.
The 70s oil inflation led to stagnation as the unionized labor were powerful enough to get cost of living raises. With the globalization of labor union power in the US has been destroyed. As Eric X Li points out China's one party rule actually changes policies easier than the Western democracies.
So China's government hasn't joined in with the West in just creating wealth for the top 1% and debt for the real economy.
As b. pointed out, the Anglo Zionist policies created the mutual benefit partnership of Russia and China. The Chinese belt and road initiative appears to be intent on creating a large trading zone that could benefit those involved. The US is just using sanctions and the military to turn sovereign functioning countries that don't go along with it into failed states and their infrastructure turned to rubble
|
|
|
Sep 21, 2020 | prospectmagazine.co.uk
A s the US prepares to plunge into a new cold war with China in which its chances do not look good, it's an appropriate time to examine how we went so badly wrong after "victory" in the last Cold War. Looking back 30 years from the grim perspective of 2020, it is a challenge even for those who were adults at the time to remember just how triumphant the west appeared in the wake of the collapse of Soviet communism and the break-up of the USSR itself.
Today, of the rich fruits promised by that great victory, only wretched fragments remain. The much-vaunted "peace dividend," savings from military spending, was squandered. The opportunity to use the resources freed up to spread prosperity and deal with urgent social problems was wasted, and -- even worse -- the US military budget is today higher than ever. Attempts to mitigate the apocalyptic threat of climate change have fallen far short of what the scientific consensus deems to be urgently necessary. The chance to solve the Israeli-Palestinian conflict and stabilise the Middle East was thrown away even before 9/11 and the disastrous US response. The lauded "new world order" of international harmony and co-operation -- heralded by the elder George Bush after the first Gulf War -- is a tragic joke. Britain's European dream has been destroyed, and geopolitical stability on the European continent has been lost due chiefly to new and mostly unnecessary tension with Moscow. The one previously solid-seeming achievement, the democratisation of Eastern Europe, is looking questionable, as Poland and Hungary (see Samira Shackle, p20) sink into semi-authoritarian nationalism.
Russia after the Cold War was a shambles and today it remains a weak economy with a limited role on the world stage, concerned mainly with retaining some of its traditional areas of influence. China is a vastly more formidable competitor. If the US (and the UK, if as usual we tag along) approach the relationship with Beijing with anything like the combination of arrogance, ignorance, greed, criminality, bigotry, hypocrisy and incompetence with which western elites managed the period after the Cold War, then we risk losing the competition and endangering the world.
One of the most malign effects of western victory in 1989-91 was to drown out or marginalise criticism of what was already a deeply flawed western social and economic model. In the competition with the USSR, it was above all the visible superiority of the western model that eventually destroyed Soviet communism from within. Today, the superiority of the western model to the Chinese model is not nearly so evident to most of the world's population; and it is on successful western domestic reform that victory in the competition with China will depend.
Hubris
Western triumph and western failure were deeply intertwined. The very completeness of the western victory both obscured its nature and legitimised all the western policies of the day, including ones that had nothing to do with the victory over the USSR, and some that proved utterly disastrous.
As Alexander Zevin has written of the house journal of Anglo-American elites, the revolutions in Eastern Europe "turbocharged the neoliberal dynamic at the Economist , and seemed to stamp it with an almost providential seal." In retrospect, the magazine's 1990s covers have a tragicomic appearance, reflecting a degree of faith in the rightness and righteousness of neoliberal capitalism more appropriate to a religious cult.
These beliefs interacted to produce a dominant atmosphere of "there is no alternative," which made it impossible and often in effect forbidden to conduct a proper public debate on the merits of the big western presumptions, policies or plans of the era. As a German official told me when I expressed some doubt about the wisdom of rapid EU enlargement, "In my ministry we are not even allowed to think about that."
This was a sentiment I encountered again and again (if not often so frankly expressed) in western establishment institutions in that era: in economic journals if it was suggested that rapid privatisation in the former USSR would lead to massive corruption, social resentment and political reaction; in security circles, if anyone dared to question the logic of Nato expansion; and almost anywhere if it was pointed out that the looting of former Soviet republics was being assiduously encouraged and profited from by western banks, and regarded with benign indifference by western governments.
The atmosphere of the time is (nowadays notoriously) summed up in Francis Fukuyama's The End of History , which essentially predicted that western liberal capitalist democracy would now be the only valid and successful economic and political model for all time. In fact, what victory in the Cold War ended was not history but the study of history by western elites.
"The US claiming the right of unilateral intervention anywhere in the world was an ambition greater than that of any previous power"A curious feature of 1990s capitalist utopian thought was that it misunderstood the essential nature of capitalism, as revealed by its real (as opposed to faith-based) history. One is tempted to say that Fukuyama should have paid more attention to Karl Marx and a famous passage in The Communist Manifesto :
"The bourgeoisie [ie capitalism] cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society All fixed, fast-frozen relations with their train of ancient and venerable prejudices and opinions, are swept away; all new-formed ones become antiquated before they can ossify the bourgeoisie has through its exploitation of the world market drawn from under the feet of industry the national ground on which it stood. All old established national industries have been destroyed or are daily being destroyed "
Then again, Marx himself made exactly the same mistake in his portrayal of a permanent socialist utopia after the overthrow of capitalism. The point is that utopias, being perfect, are unchanging, whereas continuous and radical change, driven by technological development, is at the heart of capitalism -- and, according to Marx, of the whole course of human history. Of course, those who believed in a permanently successful US "Goldilocks economy" -- not too hot, and not too cold -- also managed to forget 300 years of periodic capitalist economic crises.
Though much mocked at the time, Fukuyama's vision came to dominate western thinking. This was summed up in the universally employed but absurd phrases "Getting to Denmark" (as if Russia and China were ever going to resemble Denmark) and "The path to democracy and the free market" (my italics), which became the mantra of the new and lucrative academic-bureaucratic field of "transitionology." Absurd, because the merest glance at modern history reveals multiple different "paths" to -- and away from -- democracy and capitalism, not to mention myriad routes that have veered towards one at the same time as swerving away from the other.
Accompanying this overwhelmingly dominant political and economic ideology was an American geopolitical vision equally grandiose in ambition and equally blind to the lessons of history. This was summed up in the memorandum on "Defence Planning Guidance 1994-1999," drawn up in April 1992 for the Bush Senior administration by Under-Secretary of Defence Paul Wolfowitz and Lewis "Scooter" Libby, and subsequently leaked to the media. Its central message was:
"The US must show the leadership necessary to establish and protect a new order that holds the promise of convincing potential competitors that they need not aspire to a greater role or pursue a more aggressive posture to protect their legitimate interests We must maintain the mechanism for deterring potential competitors from even aspiring to a larger regional or global role "
By claiming for the US the right of unilateral intervention anywhere in the world and denying other major powers a greater role in their regions, this strategy essentially extended the Monroe Doctrine (which effectively defined the "western hemisphere" as the US sphere of influence) to the entire planet: an ambition greater than that of any previous power. The British Empire at its height knew that it could never intervene unilaterally on the continent of Europe or in Central America. The most megalomaniac of European rulers understood that other great powers with influence in their own areas of the world would always exist.
While that 1992 Washington paper spoke of the "legitimate interests" of other states, it clearly implied that it would be Washington that would define what interests were legitimate, and how they could be pursued. And once again, though never formally adopted, this "doctrine" became in effect the standard operating procedure of subsequent administrations. In the early 2000s, when its influence reached its most dangerous height, military and security elites would couch it in the terms of "full spectrum dominance." As the younger President Bush declared in his State of the Union address in January 2002, which put the US on the road to the invasion of Iraq: "By the grace of God, America won the Cold War A world once divided into two armed camps now recognises one sole and pre-eminent power, the United States of America."
Nemesis
Triumphalism led US policymakers, and their transatlantic followers, to forget one cardinal truth about geopolitical and military power: that in the end it is not global and absolute, but local and relative. It is the amount of force or influence a state wants to bring to bear in a particular place and on a -particular issue, relative to the power that a rival state is willing and able to bring to bear. The truth of this has been shown repeatedly over the past generation. For all America's overwhelming superiority on paper, it has turned out that many countries have greater strength than the US in particular places: Russia in Georgia and Ukraine, Russia and Iran in Syria, China in the South China Sea, and even Pakistan in southern Afghanistan.
American over-confidence, accepted by many Europeans and many Britons especially, left the US in a severely weakened condition to conduct what should have been clear as far back as the 1990s to be the great competition of the future -- that between Washington and Beijing.
On the one hand, American moves to extend Nato to the Baltics and then (abortively) on to Ukraine and Georgia, and to abolish Russian influence and destroy Russian allies in the Middle East, inevitably produced a fierce and largely successful Russian nationalist reaction. Within Russia, the US threat to its national interests helped to consolidate and legitimise Putin's control. Internationally, it ensured that Russia would swallow its deep-seated fears of China and become a valuable partner of Beijing.
On the other hand, the benign and neglectful way in which Washington regarded the rise of China in the generation after the Cold War (for example, the blithe decision to allow China to join the World Trade Organisation) was also rooted in ideological arrogance. Western triumphalism meant that most of the US elites were convinced that as a result of economic growth, the Chinese Communist state would either democratise or be overthrown; and that China would eventually have to adopt the western version of economics or fail economically. This was coupled with the belief that good relations with China could be predicated on China accepting a so-called "rules-based" international order in which the US set the rules while also being free to break them whenever it wished; something that nobody with the slightest knowledge of Chinese history should
have believed.Throughout, the US establishment discourse (Democrat as much as Republican) has sought to legitimise American global hegemony by invoking the promotion of liberal democracy. At the same time, the supposedly intrinsic connection between economic change, democracy and peace was rationalised by cheerleaders such as the New York Times 's indefatigable Thomas Friedman, who advanced the (always absurd, and now flatly and repeatedly falsified) "Golden Arches theory of Conflict Prevention." This vulgarised version of Democratic Peace Theory pointed out that two countries with McDonald's franchises had never been to war. The humble and greasy American burger was turned into a world-historical symbol of the buoyant modern middle classes with too much to lose to countenance war.
Various equally hollow theories postulated cast-iron connections between free markets and guaranteed property rights on the one hand, and universal political rights and freedoms on the other, despite the fact that even within the west, much of political history can be characterised as the fraught and complex brokering of accommodations between these two sets of things.
And indeed, since the 1990s democracy has not advanced in the world as a whole, and belief in the US promotion of democracy has been discredited by US patronage of the authoritarian and semi-authoritarian regimes in Saudi Arabia, Egypt, India and elsewhere. Of the predominantly Middle Eastern and South Asian students whom I teach at Georgetown University in Qatar, not one -- even among the liberals -- believes that the US is sincerely committed to spreading democracy; and, given their own regions' recent history, there is absolutely no reason why they should believe this.
The one great triumph of democratisation coupled with free market reform was -- or appeared to be -- in the former communist states of Central and Eastern Europe, and this success was endlessly cited as the model for political and economic reform across the globe.
But the portrayal of East European reform in the west failed to recognise the central role of local nationalism. Once again, to talk of this at the time was to find oneself in effect excluded from polite society, because to do so called into question the self-evident superiority and universal appeal of liberal reform. The overwhelming belief of western establishments was that nationalism was a superstition that was fast losing its hold on people who, given the choice, could everywhere be relied on to act like rational consumers, rather than citizens rooted in one particular land.
The more excitable technocrats imagined that nation state itself (except the US of course) was destined to wither away. This was also the picture reflected back to western observers and analysts by liberal reformers across the region, who whether or not they were genuinely convinced of this, knew what their western sponsors wanted to hear. Western economic and cultural hegemony produced a sort of mirror game, a copulation of illusions in which local informants provided false images to the west, which then reflected them back to the east, and so on.
Always the nation
Yet one did not have to travel far outside the centres of Eastern European cities to find large parts of populations outraged by the moral and cultural changes ordained by the EU, the collapse of social services, and the (western-indulged) seizure of public property by former communist elites. So why did Eastern Europeans swallow the whole western liberal package of the time? They did so precisely because of their nationalism, which persuaded them that if they did not pay the cultural and economic price of entry into the EU and Nato, they would sooner or later fall back under the dreaded hegemony of Moscow. For them, unwanted reform was the price that the nation had to pay for US protection. Not surprisingly, once membership of these institutions was secured, a powerful populist and nationalist backlash set in.
Western blindness to the power of nationalism has had several bad consequences for western policy, and the cohesion of "the west." In Eastern Europe, it would in time lead to the politically almost insane decision of the EU to try to order the local peoples, with their deeply-rooted ethnic nationalism and bitter memories of outside dictation, to accept large numbers of Muslim refugees. The backlash then became conjoined with the populist reactions in Western Europe, which led to Brexit and the sharp decline of centrist parties across the EU.
More widely, this blindness to the power of nationalism led the US grossly to underestimate the power of nationalist sentiment in Russia, China and Iran, and contributed to the US attempt to use "democratisation" as a means to overthrow their regimes. All that this has succeeded in doing is to help the regimes concerned turn nationalist sentiment against local liberals, by accusing them of being US stooges.
"A stable and healthy polity and economy must be based on some minimal moral values"
Russian liberals in the 1990s were mostly not really US agents as such, but the collapse of Communism led some to a blind adulation of everything western and to identify unconditionally with US policies. In terms of public image, this made them look like western lackeys; in terms of policy, it led to the adoption of the economic "shock therapy" policies advocated by the west. Combined with monstrous corruption and the horribly disruptive collapse of the Soviet single market, this had a shattering effect on Russian industry and the living standards of ordinary Russians.
Many liberals gave the impression of complete indifference to the resulting immiseration of the Russian population in these years. At a meeting of the Carnegie Endowment in Washington that I attended later, former Prime Minister Yegor Gaidar boasted to an applauding US audience of how he had destroyed the Russian military industrial complex. The fact that this also destroyed the livelihoods of tens of millions of Russians and Ukrainians was not mentioned.
This attitude was fed by contempt on the part of the educated classes of Moscow and St Petersburg for ordinary Russians, who were dubbed Homo Sovieticus and treated as an inferior species whose loathsome culture was preventing the liberal elites from taking their rightful place among the "civilised" nations of the west. This frame of mind was reminiscent of the traditional attitude of white elites in Latin America towards the Indio and Mestizo majorities in their countries.
I vividly remember one Russian liberal journalist state his desire to fire machine guns into crowds of elderly Russians who joined Communist demonstrations to protest about the collapse of their pensions. The response of the western journalists present was that this was perhaps a little bit excessive, but to be excused since the basic sentiment was correct.
The Russian liberals of the 1990s were crazy to reveal this contempt to the people whose votes they needed to win. So too was Hillary Clinton, with her disdain for the "basket of deplorables" in the 2016 election, much of the Remain camp in the years leading up to Brexit, and indeed the European elites in the way they rammed through the Maastricht Treaty and the euro in the 1990s.
If the post-Cold War world order was a form of US imperialism, it now looks like an empire in which rot in the over-extended periphery has spread to the core. The economic and social patterns of 1990s Russia and Ukraine have come back to haunt the west, though so far thank God in milder form. The massive looting of Russian state property and the systematic evasion of taxes by Russian and Ukrainian oligarchs was only possible with the help of western banks, which transferred the proceeds to the west and the Caribbean. This crime was euphemised in the western discourse (naturally including the Economist ) as "capital flight."
Peter Mandelson qualified his famous remark that the Blair government was "intensely relaxed about people becoming filthy rich" with the words "as long as they pay their taxes." The whole point, however, about the filthy Russian, Ukrainian, Nigerian, Pakistani and other money that flowed to and through London was not just that so much of it was stolen, but that it was escaping taxation, thereby harming the populations at home twice over. The infamous euphemism "light-touch regulation" was in effect a charter
for this.In a bitter form of poetic justice, however, "light-touch regulation" paved the way for the 2008 economic crisis in the west itself, and western economic elites too (especially in the US) would also seize this opportunity to move their money into tax havens. This has done serious damage to state revenues, and to the fundamental faith of ordinary people in the west that the rich are truly subject to the same laws as them.
The indifference of Russian elites to the suffering of the Russian population has found a milder echo in the neglect of former industrial regions across Britain, Western Europe and the US that did so much to produce the votes for Brexit, for Trump and for populist nationalist parties in Europe. The catastrophic plunge in Russian male life expectancy in the 1990s has found its echo in the unprecedented decline in white working-class male life expectancy in the US.
Perhaps the greatest lesson of the period after the last Cold War is that in the end, a stable and healthy polity and economy must be based on some minimal moral values. To say this to western economists, businessmen and financial journalists in the 1990s was to receive the kindly contempt usually accorded to religious cranks. The only value recognised was shareholder value, a currency in which the crimes of the Russian oligarchs could be excused because their stolen companies had "added value." Any concern about duty to the Russian people as a whole, or the fact that tolerance of these crimes would make it grotesque to demand honesty of policemen or civil servants, were dismissed as irrelevant sentimentality.
Bringing it all back home
We in the west are living with the consequences of a generation of such attitudes. Western financial elites have mostly not engaged in outright illegality; but then again, they usually haven't needed to, since governments have made it easy for them to abide by the letter of the law while tearing its spirit to pieces. We are belatedly recognising that, as Franklin Foer wrote in the Atlantic last year: "New York, Los Angeles and Miami have joined London as the world's most desired destinations for laundered money. This boom has enriched the American elites who have enabled it -- and it has degraded the nation's political and social mores in the process. While everyone else was heralding an emergent globalist world that would take on the best values of America, [Richard] Palmer [a former CIA station chief in Moscow] had glimpsed the dire risk of the opposite: that the values of the kleptocrats would become America's own. This grim vision is now nearing fruition."
Those analysing the connection between Russia and Trump's administration have looked in the wrong place. The explanation of Trump's success is not that Putin somehow mesmerised American voters in 2016. It is that populations abandoned by their elites are liable to extreme political responses; and that societies whose economic elites have turned ethics into a joke should not be surprised if their political leaders too become scoundrels.
About this author Anatol Lieven Anatol Lieven is a professor at Georgetown University in Qatar and the author among other books of America Right or Wrong: An Anatomy of American Nationalism and (with John Hulsman), Ethical Realism: A Vision for America's Role in the World More by this author More by Anatol Lieven Will Qatar be reduced to a Saudi client state? July 18, 2017 Why the left needs nationalism January 3, 2017 Pakistan has survived -- now can it prosper?
|
|
|
Jul 31, 2020 | www.counterpunch.org
Facebook Twitter Reddit EmailThe political success of Russiagate lies in the vanishing of American history in favor of a façade of liberal virtue. Posed as a response to the election of Donald Trump, a straight line can be drawn from efforts to undermine the decommissioning of the American war economy in 1946 to the CIA's alliance with Ukrainian fascists in 2014. In 1945 the NSC (National Security Council) issued a series of directives that gave logic and direction to the CIA's actions during the Cold War. That these persist despite the 'fall of communism' suggests that it was always just a placeholder in the pursuit of other objectives.
The first Cold War was an imperial business enterprise to keep the Generals, bureaucrats, and war materiel suppliers in power and their bank accounts flush after WWII. Likewise, the American side of the nuclear arms race left former Gestapo and SS officers employed by the CIA to put their paranoid fantasies forward as assessments of Russian military capabilities. Why, of all people, would former Nazi officers be put in charge military intelligence if accurate assessments were the goal? The Nazis hated the Soviets more than the Americans did.
The ideological binaries of Russiagate -- for or against Donald Trump, for or against neoliberal, petrostate Russia, define the boundaries of acceptable discourse to the benefit of deeply nefarious interests. The U.S. has spent a century or more trying to install a U.S.-friendly government in Moscow. Following the dissolution of the USSR in 1991, the U.S. sent neoliberal economists to loot the country as the Clinton administration, and later the Obama administration, placed NATO troops and armaments on the Russian border after a negotiated agreement not to do so . Subsequent claims of realpolitik are cover for a reckless disregard for geopolitical consequences.
The paradox of American liberalism, articulated when feminist icon and CIA asset Gloria Steinem described the CIA as ' liberal, nonviolent and honorable ,' is that educated, well-dressed, bourgeois functionaries have used the (largely manufactured) threat of foreign subversion to install right-wing nationalists subservient to American business interests at every opportunity. Furthermore, Steinem's aggressive ignorance of the actual history of the CIA illustrates the liberal propensity to conflate bourgeois dress and attitude with an imagined gentility . To the point made by Christopher Simpson , the CIA could have achieved better results had it not employed former Nazi officers, begging the question of why it chose to do so?
On the American left, Russiagate is treated as a case of bad reporting, of official outlets for government propaganda serially reporting facts and events that were subsequently disproved. However, some fair portion of the American bourgeois, the PMC that acts in supporting roles for capital, believes every word of it. Russiagate is the nationalist party line in the American fight against communism, without the communism. Charges of treason have been lodged every time that military budgets have come under attack since 1945. In 1958 the senior leadership of the Air Force was charging the other branches of the military with treason for doubting its utterly fantastical (and later disproven) estimate of Soviet ICBMs. Treason is good for business.
Shortly after WWII ended, the CIA employed hundreds of former Nazi military officers, including former Gestapo and SS officers responsible for murdering tens and hundreds of thousands of human beings , to run a spy operation known as the Gehlen Organization from Berlin, Germany. Given its central role in assessing the military intentions and capabilities of the Soviet Union, the Gehlen Organization was more likely than not responsible for the CIA's overstatement of Soviet nuclear capabilities in the 1950s used to support the U.S. nuclear weapons program. Former Nazis were also integrated into CIA efforts to install right wing governments around the world.
By the time that (Senator) John F. Kennedy claimed a U.S. 'missile gap' with the Soviets in 1958, the CIA was providing estimates of Soviet ICBMs (Inter-continental Ballistic Missiles), that were wildly inflated -- most likely provided to it by the Gehlen Organization. Once satellite and U2 reconnaissance estimates became available, the CIA lowered its own to 120 Soviet ICBMs when the actual number was four . On the one hand, the Soviets really did have a nuclear weapons program. On the other, it was a tiny fraction of what was being claimed. Bad reporting, unerringly on the side of larger military budgets, appears to be the constant.
Under the Nazi War Crimes Disclosure Act passed by Congress in 1998, the CIA was made to partially disclose its affiliation with, and employment of, former Nazis. In contrast to the ' Operation Paperclip ' thesis that it was Nazi scientists who were brought to the U.S. to labor as scientists, the Gehlen Organization and CIC employed known war criminals in political roles. Klaus Barbie, the 'Butcher of Lyon,' was employed by the CIC, and claims to have played a role in the murder of Che Guevara . Wernher von Braun, one of the Operation Paperclip 'scientists,' worked in a Nazi concentration camp as tens of thousands of human beings were murdered.
The historical sequence in the U.S. was WWI, the Great Depression, WWII, to an economy that was heavily dependent on war production. The threatened decommissioning of the war economy in 1946 was first met with an honest assessment of Soviet intentions -- the Soviets were moving infrastructure back into Soviet territory as quickly as was practicable, then to the military budget-friendly claim that they were putting resources in place to invade Europe. The result of the shift was that the American Generals kept their power and the war industry kept producing materiel and weapons. By 1948 these weapons had come to include atomic bombs.
To understand the political space that military production came to occupy, from 1948 onward the U.S. military became a well-funded bureaucracy where charges of treason were regularly traded between the branches. Internecine battles for funding and strategic dominance were (and are) regularly fought. The tactic that this bureaucracy -- the 'military industrial complex,' adopted was to exaggerate foreign threats in a contest for bureaucratic dominance. The nuclear arms race was made a self-fulfilling prophecy. As the U.S. produced world-ending weapons non-stop for decades on end, the Soviets responded in kind.
What ties the Gehlen Organization to CIA estimates of Soviet nuclear weapons from 1948 – 1958 is 1) the Gehlen Organization was central to the CIA's intelligence operations vis-à-vis the Soviets, 2) the CIA had limited alternatives to gather information on the Soviets outside of the Gehlen Organization and 3) the senior leadership of the U.S. military had long demonstrated that it approved of exaggerating foreign threats when doing so enhanced their power and added to their budgets. Long story short, the CIA employed hundreds of former Nazi officers who had the ideological predisposition and economic incentive to mis-perceive Soviet intentions and misstate Soviet capabilities to fuel the Cold War.
Where this gets interesting is that American whistleblower Daniel Ellsberg was working for the Rand Corporation in the late 1950s and early 1960s when estimates of Soviet ICBMs were being put forward. JFK had run (in 1960) on a platform that included closing the Soviet – U.S. ' missile gap .' The USAF (U.S. Air Force), charged with delivering nuclear missiles to their targets, was estimating that the Soviets had 1,000 ICBMs. Mr. Ellsberg, who had limited security clearance through his employment at Rand, was leaked the known number of Soviet ICBMs. The Air Force was saying 1,000 Soviet ICBMs when the number confirmed by reconnaissance satellites was four.
By 1962, the year of the Cuban Missile Crisis, the CIA had shifted nominal control of the Gehlen Organization to the BND, for whom Gehlen continued to work. Based on ongoing satellite reconnaissance data, the CIA was busy lowering its estimates of Soviet nuclear capabilities. Benjamin Schwarz, writing for The Atlantic in 2013, provided an account, apparently informed by the CIA's lowered estimates, where he placed the whole of the Soviet nuclear weapons program (in 1962) at roughly one-ninth the size of the U.S. effort. However, given Ellsberg's known count of four Soviet ICBMs at the time of the missile crisis, even Schwarz's ratio of 1:9 seems to overstate Soviet capabilities.
Further per Schwarz's reporting, the Jupiter nuclear missiles that the U.S. had placed in Italy prior to the Cuban Missile Crisis only made sense as first-strike weapons. This interpretation is corroborated by Daniel Ellsberg , who argues that the American plan was always to initiate the use of nuclear weapons (first strike). This made JFK's posture of equally matched contestants in a geopolitical game of nuclear chicken utterly unhinged. Should this be less than clear, because the U.S. had indicated its intention to use nuclear weapons in a first strike -- and had demonstrated the intention by placing Jupiter missiles in Italy, nothing that the U.S. offered during the Missile Crisis could be taken in good faith.
The dissolution of the USSR in 1991 was met with a promised reduction in U.S. military spending and an end to the Cold War, neither of which ultimately materialized. Following the election of Bill Clinton in 1992, the Cold War entered a new phase. Cold War logic was repurposed to support the oxymoronic 'humanitarian wars' -- liberating people by bombing them. In 1995 'Russian meddling' meant the Clinton administration rigging the election of Boris Yeltsin in the Russian presidential election. Mr. Clinton then unilaterally reneged on the American agreement to keep NATO from Russia's border when former Baltic states were brought under NATO's control .
The Obama administration's 2014 incitement in Ukraine , by way of fostering and supporting the Maidan uprising and the ousting of Ukraine's democratically elected President, Viktor Yanukovych, ties to the U.S. strategy of containing and overthrowing the Soviet (Russian) government that was first codified by the National Security Council (NSC) in 1945. The NSC's directives can be found here and here . The economic and military annexation of Ukraine by the U.S. (NATO didn't exist in 1945) comes under NSC10/2 . The alliance between the CIA and Ukrainian fascists ties to directive NSC20 , the plan to sponsor Ukrainian-affiliated former Nazis in order to install them in the Kremlin to replace the Soviet government. This was part of the CIA's rationale for putting Ukrainian-affiliated former Nazis on its payroll in 1948.
That Russiagate is the continuation of a scheme launched in 1945 by the National Security Council, to be engineered by the CIA with help from former Nazi officers in its employ, speaks volumes about the Cold War frame from which it emerges.
Its near instantaneous adoption by bourgeois liberals demonstrates the class basis of the right-wing nationalism it supports. That liberals appear to perceive themselves as defenders 'democracy' within a trajectory laid out by unelected military leaders more than seven decades earlier is testament to the power of historical ignorance tied to nationalist fervor. Were the former Gestapo and SS officers employed by the CIA 'our Nazis?'
The Nazi War Crimes Disclosure Act came about in part because Nazi hunters kept coming across Nazi war criminals living in the U.S. who told them they had been brought here and given employment by the CIA, CIC, or some other division of the Federal government. If the people in these agencies thought that doing so was justified, why the secrecy? And if it wasn't justified, why was it done? Furthermore, are liberals really comfortable bringing fascists with direct historical ties to the Third Reich to power in Ukraine? And while there are no good choices in the upcoming U.S. election, the guy who liberals want to bring to power is lead architect of this move. Cue the Sex Pistols .
|
|
|
Aug 02, 2020 | theconversation.com
By securing victory in a national vote on constitutional changes , Vladimir Putin could now remain president of Russia until 2036 if he chooses to stand again. After 20 years in power, the narrative of Russia's chaotic 1990s remains core to Putin's legitimacy as the leader who restored stability .
Although the decade still divides public opinion , what's not in doubt is that it was a dangerous and exciting period. The ambiguity of the 90s is summed up by the then-popular Russian word, bespredel , the title of a 1989 prison drama meaning anarchic freedom and unaccountable authority.
... ... ...
The social impact was immense. Life expectancy fell, with up to five million excess adult deaths in Russia in 1991-2001, birth rates collapsed and both of these trends were compounded by widespread crime and trafficking . These negative effects were concentrated in periods of economic crisis in 1991-94 and 1998-99.
Sharply rising inequality and the emergence of a new wealthy class, including some leading reformers, meant that the term "democrat" had become a term of abuse as early as 1992 .
|
|
|
Jun 30, 2020 | www.zerohedge.com
Think The "Cancel" Mobs Can't Get Any Worse? Think Again
Authored by Harlan Hill via RealClearPolitics.com,
America is in the midst of one of the great moral panics in our nation's history. If we don't stand up for our nation's core values, the situation could get even worse – and soon. If you've spent any time on social media in the last three weeks, you've probably noticed the organized campaigns to get college and even high school students expelled or denied admission based on their political views. You've also seen gleeful mobs celebrating as Americans lose their jobs for running afoul of someone's momentary political obsessions.
In every sector of American society, people are having their careers destroyed to the pitiless baying of the "woke" masses. It's happening in business. CrossFit CEO Greg Glassman spent 20 years building the fitness brand into a multi-billion dollar company, only to be thrown out of the empire he built for declining to go along with the "racism is a public health crisis" dogma.
It's happening in journalism. New York Times editor James Bennet, a liberal, was fired for publishing an op-ed by a sitting Republican senator advocating for a military response to nationwide rioting -- a position the majority of Americans agreed with. The same fate befell Philadelphia Inquirer editor Stan Wischowski, who was terminated for approving an article that condemned looting and arson.
It's happening in entertainment , in academia , and pretty much anywhere someone can be found who is not sufficiently supportive of the Black Lives Matter movement.
It's even happening to people who didn't do anything at all. An L.A. Galaxy soccer player was forced to resign because his wife tweeted that rioters should be shot. A lawyer in San Francisco was fired because his wife was rude to a man she thought was spray-painting BLM propaganda on a building that wasn't his (it was). On Thursday, this Stasi-esque trend reached another level when a company called Equity Prime Mortgage fired the stepmother of the officer charged in the controversial shooting of drunk driver Rashad Brooks after he fought with and fired a taser at police. The stepmother was apparently fired for no reason other than family loyalty.
On Monday, the panic reached what one can only hope will be its peak when a San Diego Gas and Electric employee lost his job for "making a white supremacist hand gesture." We've long since debunked the notion that the OK sign is somehow racist -- that was just a fiction perpetrated by internet trolls -- but in this case, this man lost his livelihood despite the fact he wasn't even making an OK sign . He was apparently cracking his knuckles as he drove.
What America is going through right now is not merely another, more intense round of "cancel culture." We're now in the midst of a full-force, totalitarian remolding of our society, one that seeks to place the petty resentments of an outraged minority of leftist activists above everything else in American life.
Because of their willingness to riot, loot, and assault anyone they perceive to be insufficiently sympathetic to their cause, leftists are able to bully ordinary people into submission. As a result, television shows such as " Cops " and " Live PD ," classic films such as "Gone With the Wind," and iconic brands such as Aunt Jemima , Mrs. Buttersworth , and Uncle Ben's rice are consigned to the "dustbin of history."
I used to speak frequently to nervous conservatives who were convinced that if we only allowed the left to tear down Confederate war memorials, they would be satisfied. How quickly events have disproved that wishful thinking. From Christopher Columbus , George Washington , Thomas Jefferson , and the western pioneers , activists are now coming after cartoon sports mascots and college fight songs . Everything -- from the core of our country's history to the values and norms undergirding American culture -- must be uprooted to appease the mob.
They are tearing down dozens of statues and facing no consequences whatsoever for vandalizing our public spaces -- including memorials to our nation's greatest heroes. When private citizens try to do the job the government won't and protect our culture, our history, and our public property from destruction, local officials step in and remove the statues on behalf of the vandals, lest they injure themselves while imitating Iraqis celebrating the fall of Saddam Hussein.
These people are not seeking change at the margins. They are demanding a total cultural revolution, and cowardly public officials are giving it to them. If you look at this national outpouring of hatred and recrimination with horror verging on despair, I assure you that you are not alone. Tens of millions of Americans feel exactly the same way.
President Trump is doing exactly what an American president should do in a crisis like this. He is working to maintain law and order and prevent cowed local officials from allowing political violence to flare again. He issued an executive order to add to his legacy of reform and address legitimate concerns about law enforcement in this country. He also issued a separate executive order targeting the systemic bias in Silicon Valley's censorship offices, which has allowed our social media platforms to become echo chambers for left-wing extremism and "cancel culture."
The only thing that could make the situation worse at this moment would be handing the White House to a doddering and unprincipled establishment politician beholden to the "cancel culture" mob. Presumptive Democratic nominee Joe Biden would immediately delegate de facto control over the vast justice, civil rights, and regulatory apparatus of the federal government to the loudest voices in his coalition: the woke activist class.
At this moment, there is a veritable army of lawyers and bureaucrats who have spent the last three and a half years subsisting on resentment and salivating at the prospect of regaining power. Things are bad enough now, but conditions will become much worse if the "cancel culture" born on social media is augmented with the force of law and given the full attention of Biden appointees imbued with the sweeping powers of the federal bureaucracy.
Dark forces have been unleashed in this country. Even now, we are only seeing the tip of the iceberg. If we don't want to find out how much damage it can inflict on the ship of state, we must prevent those forces from taking control of the federal government.
Delay , 5 minutes ago
Secret Weapon , 53 minutes agoFTA: there is a veritable army of lawyers and bureaucrats who have spent the last three and a half years subsisting on resentment and salivating at the prospect of regaining power.
They are not merely subsisting, they have paid themselves well and have accumulated substantial tangible wealth. Their homes are similar to oases in a desert of despair. The army of lawyers and bureaucrats think they have all their problems under control by giving tax money to their black servants. The fact is Latinos, Chinese, Moldovans and even their viziers say to themselves, "When you see an amazing opportunity for looting, but you are not sure you can do it, just do it."
Blondefire , 1 hour agoBLM/Antifa is a replay of Mao's Red guards. They revved up the college students and set them loose upon the countryside. It worked in China. Will it work here? Second Amendment is the wild card in the deck. Funny thing was, once Mao was done with the Red Guard, he had all of them executed. He did not trust them.
The cancel culture is emboldened because they are, for the most part, getting away with it. They saw Hillary's classified email debacle go unpunished, the Uranium One sale go unpunished, Fast and Furious go unpunished, Benghazi go unpunished, the attempted coup go unpunished, and they realized they can literally get away with anything. Now vandalism, theft, riot, arson and anarchy are not only unpunished but glorified in the msm while police officers are being led away in handcuffs. Tomorrow is not the day to regain control, Q isn't going to release some new documents next week and save us. We need to act today, right now, with overwhelming force, against all enemies foreign and domestic.
|
|
|
Apr 28, 2020 | www.nakedcapitalism.com
Yves here. Larry Summers watchers may recall our piece, Why Larry Summers Should Not Be Permitted to Run Anything More Important than a Dog Pound . Summers had put his hat in the ring to become Fed chairman, which elicited an impressive level of negative coverage. So memories have now faded enough that Summers be allowed to hold an important domestic role again?In fairness, Summers has attempted some rehabilitation, and now regularly takes positions to the left of the former boundary-setter of the limits of Goodthinking Liberal policy, Paul Krugman. Not that that stands for much.
By Thomas Neuburger. Originally published at DownWithTyranny
Joe Biden has chosen as his economic adviser the main Democratic proponent of the China PNTR deal and Wall Street deregulation. Apparently, Biden may really have meant it when he said "nothing will fundamentally change." https://t.co/UokamnmgyA
-- David Sirota (@davidsirota) April 23, 2020
Over the past three decades, Summers has amassed a policy record of almost unrivaled social ruin.
-- Zach Carter, Huffington PostIn a slap in the face to progressives , Joe Biden, who has already announced that if he's elected "nothing would fundamentally change," has appointed the head of Barack Obama's National Economic Council, Larry Summers, as a key adviser to his campaign.
From Bloomberg , which occasionally still reports the news (emphasis added):
Former Treasury Secretary Lawrence Summers is advising Joe Biden's presidential campaign on economic policy, including its plans to revive the U.S. economy after the coronavirus pandemic, according to five people familiar with his involvement.
The Obama and Clinton administration veteran's role roiled progressives who view his past work on the 2009 recovery as too favorable to big banks. That's awkward for the Biden campaign at a time when it is trying to win the trust of former supporters of Bernie Sanders and Elizabeth Warren.
Five people confirming is a deliberate leak, especially since non of them are said to be "unauthorized to speak about the matter."
Progressive groups are aghast, of course:
Two Sanders-aligned groups, Justice Democrats and Sunrise Movement, said Friday they "hope Biden publicleconomic y rejects Summers's role as an economic adviser to better earn the trust of our generation." They said they also plan to start a petition calling on Biden to pledge to exclude Summers from his transition team or administration.
" Larry Summers's legacy is advocating for policies that contributed to the skyrocketing inequality and climate crisis we're living with today," the groups said in a joint statement.
Summers is such a bad choice for the campaign to be aligned with that The American Prospect writer Robert Kuttner put Summers at the top of his "do not re-appoint" list .
But as Rising's Saagar Enjeti points out , the real group that Biden needs to assure isn't Progressive Avenue, or even Main Street -- it's Wall Street -- and leaking via five sources to Bloomberg News that Summers is now in Biden's inner circle does just that. As Bloomberg put it, with this move Biden has "offered some reassurance [to] Wall Street that Biden is not moving too far to the left from the centrist positions that earned him his establishment support."
I'm not if sure this will get him elected, but it is certain to be noticed, even by not-well-read voters who nonetheless care about the direction of the country. Summers was a marquee name in the Obama administration. As Robert Kuttner points out :
Under Clinton, Summers was a prime architect and huge enthusiast of what proved to be fatal financial deregulation. He was also in charge of Clinton's economic policy for post-Soviet Russia , and was responsible for pushing for early and catastrophic privatization of state assets, a fire sale that led directly to the creation of Russia's oligarchs. As president of Harvard, he proved to be both arrogant and sexist, to the point where he got himself fired.
[As Obama's chief economic advisor, Summers] not only lowballed the necessary economic stimulus and ended it prematurely, but he successfully fought for rescuing the biggest banks rather than taking them into temporary receivership . Back at Harvard, Summers earns over $600,000 as a university professor but also moonlights at the hedge fund D.E. Shaw, where his compensation is well into the seven figures. (Some would say he moonlights at Harvard.)
There are so many ways that Summers is a bad choice, it's difficult to enumerate them, though both Kuttner and the HuffPost's Zach Carter try. ( Carter : "Over the past three decades, Summers has amassed a policy record of almost unrivaled social ruin." Then he lists the ways.)
It's sufficient to say that his appointment is the economic-policy equivalent of bringing in Rahm Emanuel, who famously called liberals " fucking retarded ," to handle the Biden's relationship with progressive groups.
If Larry Summers' appointment is part of the mainstream Democratic plan to unite the Party and rally "change voters" behind the Biden candidacy, good luck.
|
|
|
Mar 27, 2020 | www.moonofalabama.org
uncle tungsten , Mar 26 2020 19:46 utc | 22
karlof1 #10Larry Summers should have a drink named after him.
Ofshore double hoarder
Safebreaker with tonic
Gin and plunder scammer
Thanks b,I bought last roll of narrow elastic yesterday and will cut up some old silk shirts today.
|
|
|
Jan 27, 2020 | newrepublic.com
This shouldn't have been too much of a surprise, as neoliberal policies had already wreaked havoc around the world. Looking back at the 1997 Asian financial crisis, the economist Joseph Stiglitz comments that "excessively rapid financial and capital market liberalization was probably the single most important cause of the crisis"; he also notes that after the crisis, the International Monetary Fund's policies "exacerbated the downturns."
Neoliberals pushed swift privatization in Russia after the Cold War, alongside a restrictive monetary policy. The result was a growing barter economy, low exports, and asset-stripping, as burgeoning oligarchs bought up state enterprises and then moved their money out of the country.
... ... ...
Rising economic inequality and the creation of monopolistic megacorporations also threaten democracy. In study after study, political scientists have shown that the U.S. government is highly responsive to the policy preferences of the wealthiest people, corporations, and trade associations -- and that it is largely unresponsive to the views of ordinary people. The wealthiest people, corporations, and their interest groups participate more in politics, spend more on politics, and lobby governments more. Leading political scientists have declared that the U.S. is no longer best characterized as a democracy or a republic but as an oligarchy -- a government of the rich, by the rich, and for the rich.
The neoliberal embrace of individualism and opposition to "the collective society," as Margaret Thatcher put it, also had perverse consequences for social and political life. Humans are social animals. But neoliberalism rejects both the medieval approach of having fixed social classes based on wealth and power and the modern approach of having a single, shared civic identity based on participation in a democratic community. The problem is that amid neoliberalism's individualistic rat race, people still need to find meaning somewhere in their lives. And so there has been a retreat to tribalism and identity groups, with civic associations replaced by religious, ethnic, or other cultural affiliations.
To be sure, race, gender, culture, and other aspects of social life have always been important to politics. But neoliberalism's radical individualism has increasingly raised two interlocking problems. First, when taken to an extreme, social fracturing into identity groups can be used to divide people and prevent the creation of a shared civic identity. Self-government requires uniting through our commonalities and aspiring to achieve a shared future. When individuals fall back onto clans, tribes, and us-versus-them identities, the political community gets fragmented. It becomes harder for people to see each other as part of that same shared future. Demagogues rely on this fracturing to inflame racial, nationalist, and religious antagonism, which only further fuels the divisions within society. Neoliberalism's war on "society," by pushing toward the privatization and marketization of everything, thus indirectly facilitates a retreat into tribalism that further undermines the preconditions for a free and democratic society.
The second problem is that neoliberals on right and left sometimes use identity as a shield to protect neoliberal policies. As one commentator has argued, "Without the bedrock of class politics, identity politics has become an agenda of inclusionary neoliberalism in which individuals can be accommodated but addressing structural inequalities cannot." What this means is that some neoliberals hold high the banner of inclusiveness on gender and race and thus claim to be progressive reformers, but they then turn a blind eye to systemic changes in politics and the economy. Critics argue that this is "neoliberal identity politics," and it gives its proponents the space to perpetuate the policies of deregulation, privatization, liberalization, and austerity. Of course, the result is to leave in place political and economic structures that harm the very groups that inclusionary neoliberals claim to support.
The foreign policy adventures of the neoconservatives and liberal internationalists haven't fared much better than economic policy or cultural politics. The U.S. and its coalition partners have been bogged down in the war in Afghanistan for 18 years and counting. Neither Afghanistan nor Iraq is a liberal democracy, nor did the attempt to establish democracy in Iraq lead to a domino effect that swept the Middle East and reformed its governments for the better. Instead, power in Iraq has shifted from American occupiers to sectarian militias, to the Iraqi government, to Islamic State terrorists, and back to the Iraqi government -- and more than 100,000 Iraqis are dead. Or take the liberal internationalist 2011 intervention in Libya. The result was not a peaceful transition to stable democracy but instead civil war and instability, with thousands dead as the country splintered and portions were overrun by terrorist groups. On the grounds of democracy promotion, it is hard to say these interventions were a success. And for those motivated to expand human rights around the world, it is hard to justify these wars as humanitarian victories -- on the civilian death count alone.
|
|
|
Jan 27, 2020 | www.unz.com
Miro23 , says: Show Comment January 26, 2020 at 8:38 am GMT
MLK , says: Show Comment January 26, 2020 at 4:53 pm GMTSo what happened following the dissolution of the Soviet Union?
The United States dispatched a cabal of cutthroat economists to Moscow to assist in the "shock therapy" campaign that collapsed the social safety net, savaged pensions, increased unemployment, homelessness, poverty, and alcoholism by many orders of magnitude, accelerated the slide to privatization that fueled a generation of voracious oligarchs, and sent the real economy plunging into an excruciating long-term depression.
Basically the NWO mafia saw that there was an opportunity to loot the place and they did it – gaining ownership – and stripping everything of value out of the place.
If the US public had the sense to realize it, it's the same as is currently happening to them.
panzerfaust , says: Show Comment January 26, 2020 at 5:04 pm GMTAt the same time Washington's agents were busy looting Moscow, NATO was moving its troops, armored divisions and missile sites closer to Russia's border in clear violation of promises that were made to Mikhail Gorbachev not to move its military "one inch east".
Yeah, yeah . . . This reminds me of that line from Animal House: "Face it Kent, you fucked up. You trusted us."
This was small beer in term's of betrayals the Russians have endured. What I've always liked about them is that they aren't bellyachers, like the Iranians are at the moment.
Ignore Western Media on Putin. He remains The Indispensable Man for Russia so he isn't going anywhere for the moment. I'm sure he'd love to become the Russian version of Deng but that's going to take a lot of preparatory work for him to get there.
@Huxley Very true and this idea that man sets himself at the top of the creation is exactly the philosophy of "Human Rights", the Masonic model imposed through the UN to the whole world.NPleeze , says: Show Comment January 26, 2020 at 6:08 pm GMT
This ideology was launched by Freemasonry during the "Enlightenment", in the 18th century. It produced the Masonic French Revolution, the Masonic US republic and later the concept of "democracy".
Published in 1899 by Don Felix Sarda Y Salvany: Liberalism is a sin. This is from a Catholic priest, but we all share the same enemy.
http://www.liberalismisasin.com/@9/11 Inside job What cult of personality? There isn't one. People mostly like the decisions he makes, not because he makes them, but because they agree with them.Anonymous [242] Disclaimer , says: Show Comment January 26, 2020 at 8:17 pm GMTAs to Chabad Lubavitch, Putin is a politician – he mingles with Christians, Jews and Muslims. As evil as Chabad Lubavitch is, Putin also mingles with the Saudi Barbarians. It's hardly proof they control him.
Go find something real, you are making a fool of yourself spreading baseless propaganda. Next you will tell us about the $583 trillion he has stashed away, so he can use it, secretly, after he retires from his life-long dictatorship.
@Tucker Well said. The US and Israel are by far the most blatantly thuggish players on the international political stage... Must be a coincidence .
|
|
|
Dec 23, 2019 | www.moonofalabama.org
Danny , Dec 23 2019 17:09 utc | 16
In Canada the cost of living outpaces wages by a considerable margin, consumer debt is the highest in the G7, permanent homeless camps are a fixture in major cities and popping up in smaller ones, people, including families, living in their vehicles is becoming normalized, an ongoing opioid epidemic is still killing hundreds of people a month, etc. etc.But the media keeps telling me unemployment is at record lows and the economy is "red hot" and "booming" so it's all good, nothing to worry about thank God because the free and democratic media here in the west never lies or traffics in distorted facts and disinformation. It only prints and broadcasts The Truth and I'm really happy about that, very relieved that everything is just fine and wonderful and all the bad things and the bad people and the bad economies are in China, Russia and scary places like that. It's great living in a place that's so free and awesome and knows only joy and prosperity!
If Putin was smart and freedom loving he'd get some western economic experts, from Harvard Business School say, to help get the Russian economy booming but he's paranoid and doesn't trust the west for some reason.
The uneasiness I feel as I stumble over the sleeping homeless people on my way to the bus stop in the morning is irrational and foolish and was planted in my mind by Russian troll bots on Facebook. I understand this now. Everything is wonderful here, now and always. With Justin Trudeau and Chrystia Freeland at the helm and a first class media dedicated to Truth why would anyone worry or be mistrustful of our great Leaders and our Democratic Institutions? We are the envy of the world and that makes Putin's Russia jealous and meddlesome. I understand this now and channel all my news through an Atlantic Council Fake News Filter plugin so all the Putinist mind warping stuff on Facebook can't affect me anymore.
Sorry that was a long post, lol. Anyways my friend I hope you are well even though I am sad that you still have a false paranoia about Our Western Media spreading Fake News. It's Putin bro, not "us"! I understand this now broke lurker cover to share my insight with you so that you too can learn to speak only Teh Truth. The Russian economy is spluttering badly and here in Canada everything is wonderful! In Germany too! They hate our freedom and therefore it's always bad there. The Democratic West will save the Putinist economy when Putin learns to love and trust the West like I do (and hopefully you)! Peace out bro and much love, eh, haha.
|
|
|
Nov 15, 2019 | www.moonofalabama.org
Curtis , Nov 14 2019 0:52 utc | 53
Nemesiscalling 15
Right you are. The Anti-Russia hype has been going on for a while but had a bit of a hiatus during King (W) Shrub II. Both parties worked to destroy the Russian economy during the 80s/90s with the Chicago/Harvard boys gutting it completely while enriching themselves. It accelerated under Obama while they presented us with the "Reset" switch. Apparently the Russians didn't play along so they became the bogeyman that gets inflated as time goes on. Trump tried but got dragged down in the process.As to a US split, I live in the south. So I've wondered if California (for example) tried to leave if a US President would pull a Lincoln and destroy the state ... in order to save it.
|
|
|
Nov 09, 2019 | www.theamericanconservative.com
Andrew Bacevich describes how the U.S. learned all the wrong lessons from the fall of the Berlin Wall and the end of the Cold War:
You won't hear it from any of the candidates vying to succeed Trump, but we are still haunted by our false conception of the Cold War. On the stump, politicians get away with reciting comforting clichés about the imperative of American global leadership. Yet the time for believing such malarkey is long gone.
An essential first step toward recoupling national security policy and reason is to see the Cold War for what it was: not a "long, twilight struggle" ending in victory, but a vast and costly tragedy that inflicted needless suffering, brought humankind absurdly close to extinction, and from which U.S. policymakers have drawn all the wrong lessons.
The anniversary of the fall of the Berlin wall offers an occasion not for celebration but for somber and long overdue reflection.
One of the wrong lessons that U.S. policymakers drew from the events of 1989-1991 was that the U.S. was chiefly responsible for ending and "winning" the Cold War, which inevitably overestimated our government's capabilities and effectiveness in affecting the political fortunes of other parts of the world. The far more critical and important role of the peoples of central and eastern Europe and the Soviet Union itself in overthrowing the system that had oppressed them was pushed into the background as much as possible. The U.S. took credit for their success and policymakers frequently attributed the outcome to the policies of the late Cold War rather than to the deficiencies and failings of the other system. After waging stalemated and failed wars in the name of anticommunism, U.S. policymakers wanted to be able to claim that they had "won" something, and so they declared victory for something that they hadn't caused.
The period that followed the dissolution of the USSR was one of triumphalism, expansion, and overreach. The U.S. not only congratulated itself for achieving something that was accomplished by others, but it also assumed that it could achieve similar results in other parts of the world. If NATO had been a great success as a defensive alliance, the "thinking" went, why shouldn't it continue and expand to include many more countries? If the U.S. was supposedly able to bring down the Soviet Union, why shouldn't it do the same to authoritarian regimes elsewhere? Absent the check on ambition and hubris that a superpower rival provided, the U.S. was free to run amok and do whatever it liked without regard for the consequences. That triumphalism sowed the seeds for many of the more significant post-Cold War failures that we have witnessed since then. Even today, that same overconfidence encourages U.S. policymakers to flirt with the idea of engaging in another Cold War-style rivalry with a more formidable state in China.
George Kennan presciently warned against the triumphalism that he saw around him as early as 1992. At that time, he was responding directly to the claims from Republicans that Reagan and his policies had "won" the Cold War:
The suggestion that any American administration had the power to influence decisively the course of a tremendous domestic-political upheaval in another great country on another side of the globe is intrinsically silly and childish. No great country has that sort of influence on the internal developments of any other one.
Kennan went on to say that the militarization of U.S. foreign policy during the Cold War was a boon to Soviet hard-liners and in that way helped prolong it:
The extreme militarization of American discussion and policy, as promoted by hard-line circles over the ensuing 25 years, consistently strengthened comparable hard-liners in the Soviet Union.
The more America's political leaders were seen in Moscow as committed to an ultimate military rather than political resolution of Soviet-American tensions, the greater was the tendency in Moscow to tighten the controls by both party and police, and the greater the braking effect on all liberalizing tendencies in the regime. Thus the general effect of cold war extremism was to delay rather than hasten the great change that overtook the Soviet Union at the end of the 1980's.
Whenever hawks talk about "winning" the Cold War, they invariably mean that it was the militarized policies they favored that carried the day, but Kennan reminded us that this was not so. In fact, a militarized foreign policy perpetuated the struggle by providing Soviet hard-liners with a plausible foreign threat that they could use to justify their own policies and to clamp down on internal dissent. We have seen the same thing repeated several times in the last thirty years on a smaller scale with other governments. The most aggressive and confrontational policies unwittingly aid authoritarian regimes by giving them an external enemy that they can use to deflect attention from their own failings and as a pretext for the consolidation of power at home.
Kennan was already telling us shortly after the Cold War ended that no one had "won" it:
Nobody -- no country, no party, no person -- "won" the cold war. It was a long and costly political rivalry, fueled on both sides by unreal and exaggerated estimates of the intentions and strength of the other party [bold mine-DL]. It greatly overstrained the economic resources of both countries, leaving both, by the end of the 1980's, confronted with heavy financial, social and, in the case of the Russians, political problems that neither had anticipated and for which neither was fully prepared.
We can all be grateful that the Cold War ended, but we shouldn't delude ourselves with talk of victory. Not only is it inaccurate, but it encourages the worst kinds of overreach and arrogance that has led to several serious foreign policy failures in the decades that have followed. Kennan warned us almost thirty years ago not to go down this path of triumphalism, and as so often happened Americans ignored Kennan's wisdom.
Kennan concluded with the same idea that Bacevich stated at the end of his op-ed:
That the conflict should now be formally ended is a fit occasion for satisfaction but also for sober re-examination of the part we took in its origin and long continuation. It is not a fit occasion for pretending that the end of it was a great triumph for anyone, and particularly not one for which any American political party could properly claim principal credit.
American policymakers are not known for sober re-examination and acknowledgment of error, but these are exactly the things that are needed if we are to stop making the same blunders and learning the wrong lessons from the past. Kennan and Bacevich's advice is just as timely and important today as it was twenty-seven years ago. Perhaps this time we should pay attention and listen to it.
|
|
|
Oct 29, 2019 | economistsview.typepad.com
anne
, October 26, 2019 at 01:42 PMhttps://glineq.blogspot.com/2019/10/chile-poster-boy-of-neoliberalism-who.htmlOctober 26, 2019
Chile: The poster boy of neoliberalism who fell from grace
It is not common for an Organisation for Economic Co-operation and Development county to shoot and kill 16 people in two days of socially motivated riots. (Perhaps only Turkey, in its unending wars against the Kurdish guerrilla, comes close to that level of violence.) This is however what Chilean government, the poster child of neoliberalism and transition to democracy, did last week in the beginning of protests that do not show the signs of subsiding despite cosmetic reforms proposed by President Sebastian Piñera.
The fall from grace of Chile is symptomatic of worldwide trends that reveal the damages causes by neoliberal policies over the past thirty years, from privatizations in Eastern Europe and Russia to the global financial crisis to the Euro-related austerity. Chile was held, not the least thanks to favorable press that it enjoyed, as a exemplar of success. Harsh policies introduced after the overthrow of Salvador Allende in 1973, and the murderous spree that ensued afterwards, have been softened by the transition to democracy but their essential features were preserved. Chile indeed had a remarkably good record of growth, and while in the 1960-70s it was in the middle of the Latin American league by GDP per capita, it is now the richest Latin American country. It was of course helped too by high prices for its main export commodity, copper, but the success in growth is incontestable. Chile was "rewarded" by the membership in the OECD, a club of the rich nations, the first South American country to accede to it.
Where the country failed is in its social policies which somewhat bizarrely were considered by many to have been successful too. In the 1980s-90s, the World Bank hailed Chilean "flexible" labor policies which consisted of breaking up the unions and imposing a model of branch-level negotiations between employers and workers rather than allowing an overall umbrella union organization to negotiate for all workers. It was even more bizarrely used by the World Bank as a model of transparency and good governance, something that the transition countries in Eastern Europe should have presumably copied from Chile. The brother of the current Chilean president, scions of one of the richest families in Chile, became famous for introducing, as Minister of Labor and Social Security under Pinochet, a funded system of pensions where employees make compulsory contributions from their wages into one of several pension funds, and after retirement receive pensions based on investment performance of such funds. Old-age pensions thus became a part of roulette capitalism. But In the process, the pension funds, charging often exorbitant fees, and their managers became rich.
José Piñera had tried to "sell" this model to Yeltsin's Russia and to George Bush's United States, but, despite the strong (and quite understandable) support of the financial communities in both countries, he failed. Nowadays, most Chilean pensioners receive $200-$300 per month in a country whose price level (according to International Comparison Project, a worldwide UN- and World Bank-led project to compare price levels around the world) is about 80% of that of the United States.
While Chile leads Latin America in GDP per capita, it also leads it terms of inequality. In 2015, its level of income inequality was higher than in any other Latin American country except for Colombia and Honduras. It exceeded even Brazil's proverbially high inequality. The bottom 5% of the Chilean population have an income level that is about the same as that of the bottom 5% in Mongolia. The top 2% enjoy the income level equivalent to that of the top 2% in Germany. Dortmund and poor suburbs of Ulan Bataar were thus brought together.
Chilean income distribution is extremely unequal. But even more so is its wealth distribution. There, Chile is an outlier even compared to the rest of Latin America. According to the Forbes' 2014 data on world billionaires, the combined wealth of Chilean billionaires' (there were twelve of them) was equal to 25% of Chilean GDP. The next Latin American countries with highest wealth concentrations are Mexico and Peru where the wealth share of billionaires is about half (13 percent of GDP) of Chile's. But even better: Chile is the country where billionaires' share, in terms of GDP, is the highest in the world (if we exclude countries like Lebanon and Cyprus) where many foreign billionaires simply "park" their wealth for tax reasons. The wealth of Chile's billionaires, compared to their country's GDP, exceeds even that of Russians.
[Graph]Such extraordinary inequality of wealth and income, combined with full marketization of many social services (water, electricity etc.), and pensions that depend on the vagaries of the stock market has long been "hidden" from foreign observers by Chile's success in raising its GDP per capita.
But the recent protests show that the latter is not enough. Growth is indispensable for economic success and reduction in poverty. But it is not enough: if there Is no social justice and minimum of social cohesion, the effects of growth will dissolve in grief, demonstrations, and yes, in the shooting of people.
-- Branko Milanovic
|
|
|
Oct 05, 2019 | www.nakedcapitalism.com
... ... ...
By Mark Ames, author of Going Postal: Rage, Murder and Rebellion from Reagan's Workplaces to Clinton's Columbine .
... ... ...
Efforts to discredit Taibbi for his work in Moscow got traction in 2017, curiously, right before the release of his book on the police killing of Eric Garner, I Can’t Breathe. Paste Magazine contacted the women that worked at The eXile, all of whom confirmed that Ames never committed any misconduct toward women, and amplified the curious timing. From Paste:Paste was able to trace the effort to cast eXile as a factual memoir back to an alt-right author named Jim Goad in 2011. Goad, whose magazine, ANSWER Me!, had been parodied by The eXile…
However, the narrative that the book was an accurate portrayal of the lives Taibbi and Ames led in Moscow wouldn’t really take off until October of this year—ahead of the book tour for I Can’t Breathe, Taibbi’s look at the death of Eric Garner and its aftermath….
How did this happen?
Simply put, for most Americans today, the culture and stereotypes Taibbi and Ames were lampooning are completely foreign and unfamiliar….
“The paper was to be a mirror of the typical expatriate in ‘exile,’ who was a pig of the highest order,” Taibbi explained. “He was usually a Western consultant who made big bucks teaching Russians how to fire workers or privatize markets in the name of ‘progress,’ then at night banged hookers and blew coke and speed. The reality is most of the Westerners in town were there to turn Russia into a neoliberal puppet state by day, and get laid and shitfaced by night. So the paper was a kind of sarcastically over-enthusiastic celebration of this monstrous community’s values.”
The oligarchy has spent decades on a project to "defund the Left," and they've succeeded in ways we're only just now grasping. "Defunding the Left" doesn't mean denying funds to the rotten Democratic Party; it means defunding everything that threatens the 1%'s hold on wealth and power.
One of their greatest successes, whether by design or not, has been the gutting of journalism, shrinking it down to a manageable size where its integrity can be drowned in a bathtub. It's nearly impossible to make a living as a journalist these days; and with the economics of the journalism business still in free-fall like the Soviet refrigerator industry in the 1990s, media outlets are even less inclined to challenge power, journalists are less inclined to rock the boat than ever, and everyone is more inclined to corruption (see: Washington Post, Atlantic Monthly).
A ProPublica study in May put it in numbers: In 1980, the ratio of PR flaks to journalists was roughly 1:3. In 2008, there were 3 PR flaks for every 1 journalist. And that was before the 2008 shit hit the journalism fan.
This is what an oligarchy looks like. I saw the exact same dynamic in Russia under Yeltsin: When he took power in 1991, Russia had the most fearless and most ideologically diverse journalism culture of any I've ever seen, a lo-fi, hi-octane version of American journalism in the 1970s.
But as soon as Yeltsin created a class of oligarchs to ensure his election victory in 1996, the oligarchs snapped up all the free media outlets, and forced out anyone who challenged power, one by one. By the time Putin came to power, all the great Russian journalists that I and Taibbi knew had abandoned the profession for PR or political whoring. It was the oligarchy that killed Russian journalism...
The only way to prevent that from happening to is to support the best of what we have left. Working for free sucks. It can't hold, and it won't.
... ... ...
Rodger Malcolm Mitchell , October 5, 2019 at 11:15 am
Susan the other` , October 5, 2019 at 12:32 pm
Thanks for this oldie goldie. I'm sure everyone has noticed that Larry is crawling out of his hole again. He's trying not to attract too much attention to himself. Because he knows how bad his press is. He's aligning with "scholars" who are a little more financially left and he's trying not to look arrogant, so he's settling for stupid and desperate. Desperate for a political niche. He's made quiet endorsements for Libra and he's been a little too open to crypto currencies.
Larry's always got an agenda. Ours should be to contain self-interested incompetent repeat grifters like Larry. There should be legislation for anyone in politics: 3 strikes and yer out. I think the Obama administration's response to the GFC counted as at least 3 strikes. And should have eliminated lotsa democrats, most importantly all of his "advisors". And also his VP.
skippy , October 5, 2019 at 6:45 pm
Maybe if people started calling DINOs Thirdway – Washington consensus in the memory of the Democratic party .
James , October 5, 2019 at 10:01 pm
You had to love the eXile's "worst foreign correspondent in Moscow" contest:
http://exiledonline.com/old-exile/vault/pr/pr83.html
|
|
|
Oct 05, 2019 | economistsview.typepad.com
likbez -> anne... , October 05, 2019 at 04:40 PM
Anne,Let me serve as a devil advocate here.
Japan has a shrinking population. Can you explain to me why on the Earth they need economic growth?
This preoccupation with "growth" (with narrow and false one dimensional and very questionable measurements via GDP, which includes the FIRE sector) is a fallacy promoted by neoliberalism.
Neoliberalism proved to be quite sophisticated religions with its own set of True Believers in Eric Hoffer's terminology.
A lot of current economic statistics suffer from "mathiness".
For example, the narrow definition of unemployment used in U3 is just a classic example of pseudoscience in full bloom. It can be mentioned only if U6 mentioned first. Otherwise, this is another "opium for the people" ;-) An attempt to hide the real situation in the neoliberal "job market" in which has sustained real unemployment rate is always over 10% and which has a disappearing pool of well-paying middle-class jobs. Which produced current narco-epidemics (in 2018, 1400 people were shot in half a year in Chicago ( http://www.chicagotribune.com/news/breaking/ct-met-weekend-shooting-violence-20180709-story.html ); imagine that). While I doubt that people will hang Pelosi on the street post, her successor might not be so lucky ;-)
Everything is fake in the current neoliberal discourse, be it political or economic, and it is not that easy to understand how they are deceiving us. Lies that are so sophisticated that often it is impossible to tell they are actually lies, not facts. The whole neoliberal society is just big an Empire of Illusions, the kingdom of lies and distortions.
I would call it a new type of theocratic state if you wish.
And probably only one in ten, if not one in a hundred economists deserve to be called scientists. Most are charlatans pushing fake papers on useless conferences.
It is simply amazing that the neoliberal society, which is based on "universal deception," can exist for so long.
|
|
|
Sep 09, 2019 | original.antiwar.com
When Soviet president Mikhail Gorbachev received his peace prize in 1990, the Nobel Prize committee declared that "the two mighty power blocs, have managed to abandon their life-threatening confrontation" and confidently expressed that "It is our hope that we are now celebrating the end of the Cold War." Recently, U.N. General Secretary António Guterres funereally closed the celebrations with the realization that "The Cold War is back."
In a very short span of history, the window that had finally opened for Russia and the United States to build a new international system in which they work cooperatively to address areas of common interest had slammed back closed. How was that historic opportunity wasted? Why was the road from the Nobel committee's hope to the UN's eulogy such a short one?
The doctrinal narrative that is told in the U.S. is the narrative of a very short road whose every turn was signposted by Russian lies, betrayal, deception and aggression. The American telling of history is a tale in which every blow to the new peace was a Russian blow. The fact checked version offers a demythologized history that is unrecognizably different. The demythologized version is also a history of lies, betrayal, deception and aggression, but the liar, the aggressor, is not primarily Russia, but America. It is the history of a promise so historically broken that it laid the foundation of a new cold war.
But it was not the first promise the United States broke: it was not even the first promise they broke in the new cold war.
The Hot War
Most histories of the cold war begin at the dawn of the post World War II period. But the history of U.S-U.S.S.R. animosity starts long before that: it starts as soon as possible, and it was hot long before it turned cold.
The label "Red Scare" first appeared, not in the 1940s or 50s, but in 1919. Though it is a chapter seldom included in the history of American-Russian relations, America actively and aggressively intervened in the Russian civil war in an attempt to push the Communists back down. The United States cooperated with anti-Bolshevik forces: by mid 1918, President Woodrow Wilson had sent 13,000 American troops to Soviet soil. They would remain there for two years, killing and injuring thousands. Russian Premier Nikita Khrushchev would later remind America of "the time you sent your troops to quell the revolution." Churchill would record for history the admission that the West "shot Soviet Russians on sight," that they were "invaders on Russian soil," that "[t]hey armed the enemies of the Soviet government," that "[t]hey blockaded its ports, and sunk its battleships. They earnestly desired and schemed for its downfall."
When the cause was lost, and the Bolsheviks secured power, most western countries refused to recognize the communist government. However, realism prevailed, and within a few short years, by the mid 1920s, most countries had recognized the communist government and restored diplomatic relations. All but the US It was not until several years later that Franklin D. Roosevelt finally recognized the Soviet government in 1933.
The Cold War
It would be a very short time before the diplomatic relations that followed the hot war would be followed by a cold war. It might even be possible to pin the beginning of the cold war down to a specific date. On April 22 and 23, President Truman told Soviet foreign minister Vyacheslav Molotov to "Carry out his agreement" and establish a new, free, independent government in Poland as promised at Yalta. Molotov was stunned. He was stunned because it was not he that was breaking the agreement because that was not what Roosevelt, Churchill and Stalin had agreed to at Yalta. The final wording of the Yalta agreement never mentioned replacing Soviet control of Poland.
The agreement that Roosevelt revealed to congress and shared with the world – the one that still dominates the textbook accounts and the media stories – is not the one he secretly shook on with Stalin. Roosevelt lied to congress and the American people. Then he lied to Stalin.
In exchange for Soviet support for the creation of the United Nations, Roosevelt secretly agreed to Soviet predominance in Poland and Eastern Europe. The cold war story that the Soviet Union marched into Eastern Europe and stole it for itself is a lie: Roosevelt handed it to them.
So did Churchill. If Roosevelt's motivation was getting the UN, Churchill's was getting Greece. Fearing that the Soviet Union would invade India and the oil fields of Iran, Churchill saw Greece as the geographical roadblock and determined to hold on to it at all cost. The cost, it turned out, was Romania. Churchill would give Stalin Romania to protect his borders; Stalin would give Churchill Greece to protect his empire's borders. The deal was sealed on October 9, 1944.
Churchill says that in their secret meeting, he asked Stalin, "how would it do for you to have ninety percent predominance in Romania, for us to have ninety percent predominance in Greece? . . ." He then went on to offer a fifty-fifty power split in in Yugoslavia and Hungary and to offer the Soviets seventy-five percent control of Bulgaria. The exact conversation may never have happened, according to the political record, but Churchill's account captures the spirit and certainly captures the secret agreement.
Contrary to the official narrative, Stalin never betrayed the west and stole Eastern Europe: Poland, Romania and the rest were given to him in secret. Then Roosevelt lied to congress and to the world.
That American lie raised the curtain on the cold war.
The New Cold War
Like the Cold War, the new cold war was triggered by an American lie. It was a lie so duplicitous, so all encompassing, that it would lead many Russians to see the agreement that ended the cold war as a devastating and humiliating deception that was really intended to clear the way for the US to surround and finally defeat the Soviet Union. It was a lie that tilled the soil for all future "Russian aggression."
At the close of the cold war, at a meeting held on February 9, 1990, George H.W. Bush's Secretary of State, James Baker, promised Gorbachev that if NATO got Germany and Russia pulled its troops out of East Germany, NATO would not expand east of Germany and engulf the former Soviet states. Gorbachev records in his memoirs that he agreed to Baker's terms "with the guarantee that NATO jurisdiction or troops would not extend east of the current line." In Super-power Illusions , Jack F. Matlock Jr., who was the American ambassador to Russia at the time and was present at the meeting, confirms Gorbachev's account, saying that it "coincides with my notes of the conversation except that mine indicate that Baker added "not one inch." Matlock adds that Gorbachev was assured that NATO would not move into Eastern Europe as the Warsaw Pact moved out, that "the understanding at Malta [was] that the United States would not 'take advantage' of a Soviet military withdrawal from Eastern Europe." At the February 9 meeting, Baker assured Gorbachev that "neither the President or I intend to extract any unilateral advantages from the processes that are taking place."
But the promise was not made just once, and it was not made just by the United States. The promise was made on two consecutive days: first by the Americans and then by West German Chancellor Helmut Kohl. According to West German foreign ministry documents, on February 10, 1990, the day after James Baker's promise, West German Foreign Minister Hans-Dietrich Genscher told his Soviet counterpart Eduard Shevardnadze "'For us . . . one thing is certain: NATO will not expand to the east.' And because the conversation revolved mainly around East Germany, Genscher added explicitly: 'As far as the non-expansion of NATO is concerned, this also applies in general.'"
A few days earlier, on January 31, 1990, Genscher had said in a major speech that there would not be "an expansion of NATO territory to the east, in other words, closer to the borders of the Soviet Union."
Gorbachev says the promise was made not to expand NATO "as much as a thumb's width further to the east." Putin also says mourns the broken promise, asking at a conference in Munich in February 2007, "What happened to the assurances our Western partners made after the dissolution of the Warsaw Pact? Where are those declarations today? No one even remembers them."
Putin went on to remind his audience of the assurances by pointing out that the existence of the NATO promise is not just the perception of him and Gorbachev. It was also the view of the NATO General Secretary at the time: "But I will allow myself to remind this audience what was said. I would like to quote the speech of NATO General Secretary Mr. [Manfred] Woerner in Brussels on 17 May 1990. He said at the time that: 'The fact that we are ready not to place a NATO army outside of German territory gives the Soviet Union a firm security guarantee.' Where are those guarantees?"
Recent scholarship supports the Russian version of the story. Russian expert and Professor of Russian and European Politics at the University of Kent, Richard Sakwa says that "[r]ecent studies demonstrate that the commitment not to enlarge NATO covered the whole former Soviet bloc and not just East Germany." And Stephen Cohen, Professor Emeritus of Politics at Princeton University and of Russian Studies and History at New York University, adds that the National Security Archive has now published the actual documents detailing what Gorbachev was promised. Published on December 12, 2017, the documents finally, and authoritatively, reveal that "The truth, and the promises broken, are much more expansive than previously known: all of the Western powers involved – the US, the UK, France, Germany itself – made the same promise to Gorbachev on multiple occasions and in various emphatic ways."
That key promise made to Gorbachev was shattered, first by President Clinton and then subsequently supported by every American President: NATO engulfed Poland, Hungary and the Czech Republic in 1999; Estonia, Latvia, Lithuania, Bulgaria, Romania, Slovakia and Slovenia in 2004, Albania and Croatia in 2009 and, most recently, Montenegro.
It was this shattered promise, this primal betrayal, this NATO expansion to Russia's borders that created the conditions and causes of future conflicts and aggressions. When, in 2008, NATO promised Georgia and Ukraine eventual membership, Russia saw the threat of NATO encroaching right to its borders. It is in Georgia and Ukraine that Russia felt it had to draw the line with NATO encroachment into its core sphere of influence. Sakwa says that the war in Georgia was "the first war to stop NATO enlargement; Ukraine was the second." What are often cited as acts of Russian aggression that helped maintain the new cold war are properly understood as acts of Russian defense against US aggression that made a lie out of the promise that ended the Cold War.
When Clinton decided to break Bush's promise and betray Russia, George Kennen, father of the containment policy, warned that NATO expansion would be "the most fateful error of American foreign policy in the entire post-cold-war era." "Such a decision," he prophesied, "may be expected to . . . restore the atmosphere of the cold war in East-West relations . . .."
The broken promise restored the cold war. Though it is the most significant root of the new cold war, it was not the first. There was a prior broken promise, and this time the man who betrayed Russia was President H.W. Bush.
The end of the Cold War resulted from negotiations and not from any sort of military victory. Stephen Cohen says that "Presidents Reagan and George H.W. Bush negotiated with the last Soviet Russian leader, Mikhail Gorbachev, what they said was the end of the Cold War on the shared, expressed premise that it was ending 'with no losers, only winners.'"
The end of the Cold War and the end of the Soviet Union occurred so closely chronologically that it permitted the American mythologizers to conflate them in the public imagination and create the doctrinal history in which the US defeat of the Soviet Union ended the cold war. But the US did not defeat the Soviet Union. Gorbachev brought about what Sakwa calls a "self-willed disintegration of the Soviet bloc." The Soviet Union came to an end, not by external force or pressure, but out of Gorbachev's recognition of the Soviet Union's own self interest. Matlock flatly states that "pressure from governments outside the Soviet Union, whether from America or Europe or anywhere else, had nothing to do with [the Soviet collapse]." "Cohen demythologizes the history by reinstating the chronological order: Gorbachev negotiated the end of the cold war "well before the disintegration of the Soviet Union." The Cold War officially ended well before the end of the Soviet Union with Gorbachev's December 7, 1988 address to the UN
Matlock says that "Gorbachev is right when he says that we all won the Cold War." He says that President Reagan would write in his notes, "Let there be no talk of winners and losers." When Gorbachev compelled the countries of the Warsaw Pact to adopt reforms like his perestroika in the Soviet Union and warmed them that the Soviet army would no longer be there to keep their communist regimes in power, Matlock points out in Superpower Illusions that "Bush assured Gorbachev that the United States would not claim victory if the Eastern Europeans were allowed to replace the Communist regimes that had been imposed on them." Both the reality and the promise were that there was no winner of the Cold War: it was a negotiated peace that was in the interest of both countries.
When in 1992, during his losing re-election campaign, President Bush arrogantly boasted that "We won the Cold War!" he broke his own promise to Gorbachev and helped plant the roots of the new cold war. "In psychological and political terms," Matlock says, "President Bush planted a landmine under the future U.S.-Russian relationship" when he broke his promise and made that claim.
Bush's broken promise had two significant effects. Psychologically, it created the appearance in the Russian psyche that Gorbachev had been tricked by America: it eroded trust in America and in the new peace. Politically, it created in the American psyche the false idea that Russia was a defeated country whose sphere of interest did not need to be considered. Both these perceptions contributed to the new cold war.
Not only was the broken promise of NATO expansion not the first broken American promise, it was also not the last. In 1997, when President Clinton made the decision to expand NATO much more than an inch to the east, he at least signed the Russia-NATO Founding Act , which explicitly promised that as NATO expanded east, there would be no "permanent stationing of substantial combat forces." This obliterated American promise planted the third root of the new cold war.
Since that third promise, NATO has, in the words of Stephen Cohen, built up its "permanent land, sea and air power near Russian territory, along with missile-defense installations." US and NATO weapons and troops have butted right up against Russia's borders, while anti-missile installations have surrounded it, leading to the feeling of betrayal in Russia and the fear of aggression. Among the earliest moves of the Trump administration were the moving of NATO troops into Lithuania, Romania, Bulgaria and nearby Norway.
Mikhail Gorbachev, who offered the West Russia and cooperation in place of the Soviet Union and Cold War, was rewarded with lies, broken promises and betrayal. That was the sowing of the first seeds of the new cold war. The second planting happened during the Yeltsin years that followed. During this stage, the Russian people were betrayed because their hopes for democracy and for an economic system compatible with the West were both destroyed by American intervention.
The goal, Matlock too gently explains, "had to be a shift of the bulk of the economy to private ownership." What transpired was what Naomi Klein called in The Shock Doctrine "one of the greatest crimes committed against a democracy in modern history." The States allowed no gradual transition. Matlock says the "Western experts advised a clean break with the past and a transition to private ownership without delay." But there was no legitimate private capital coming out of the communist system, so there was no private money with which to privatize. So, there was only one place for the money to come. As Matlock explains, the urgent transition allowed "privileged insiders[to] join the criminals who had been running a black market [and to] steal what they could, as fast as they could." The sudden, uncompromising transition imposed on Russia by the United States enabled, according to Cohen, "a small group of Kremlin-connected oligarchs to plunder Russia's richest assets and abet the plunging of some two-thirds of its people into poverty and misery."
The rape of Russia was funded, overseen and ordered by the United States and handed over by President George H.W. Bush to the International Monetary Fund and the World Bank. Much of their advice, Matlock says generously, "was not only useless, but sometimes actually damaging."
Sometimes damaging? In the first year, millions lost their entire life savings. Subsidy cuts meant that many Russians didn't get paid at all. Klein says that by 1992, Russians were consuming 40% less than they were the year before, and one third of them had suddenly sunk below the poverty line. The economic policies wrestled onto Russia by the US and the transition experts and international development experts it funded and sent over led to, what Cohen calls, "the near ruination of Russia." Russia's reward for ending the Cold War and joining the Western economic community was, in Cohen's words, "the worst economic depression in peacetime, the disintegration of the highly professionalized Soviet middle class, mass poverty, plunging life expectancy [for men, it had fallen below sixty], the fostering of an oligarchic financial elite, the plundering of Russia's wealth, and more."
By the time Putin came to power in 2000, Cohen says, "some 75% of Russians were living in poverty." 75%! Millions and millions of Russian lives were destroyed by the American welcoming of Russia into the global economic community.
But before Putin came to power, there was more Boris Yeltsin. Yeltsin was a necessity for Clinton and the United States because Yeltsin was the pliable puppet who would continue to enforce the cruel economic transition. But to continue the interference in, and betrayal of, the Russian people economically, it would now be necessary to interfere in and betray the Russian democracy.
In late 1991, after the fall of the Soviet Union, Boris Yeltsin won a year of special powers from the Russian Parliament: for one year, he was to be, in effect, the dictator of Russia to facilitate the midwifery of the birth of a democratic Russia. In March of 1992, under pressure from the, by now, impoverished, devastated and discontented population, parliament repealed the dictatorial powers it had granted him. Yeltsin responded by declaring a state of emergency, re-bestowing upon himself the repealed dictatorial powers. Russia's Constitutional Court ruled that Yeltsin was acting outside the constitution. But the US sided – against the Russian people and against the Russian Constitutional Court – with Yeltsin.
Intoxicated with American support, Yeltsin dissolved the parliament that had rescinded his powers and abolished the constitution of which he was in violation. In a 636-2 vote, the Russian parliament impeached Yeltsin. But, President Clinton again sided with Yeltsin against the Russian people and the Russian law, backed him and gave him $2.5 billion in aid. Clinton was blocking the Russian people's choice of leaders.
Yeltsin took the money and sent police officers and elite paratroopers to surround the parliament building. Clinton "praised the Russian President has (sic) having done 'quite well' in managing the standoff with the Russian Parliament," as The New York Times reported at the time. Clinton added that he thought "the United States and the free world ought to hang in there" with their support of Yeltsin against his people, their constitution and their courts, and judged Yeltsin to be "on the right side of history."
On the right side of history and armed with machine guns and tanks, in October 1993, Yeltsin's troops opened fire on the crowd of protesters, killing about 100 people before setting the Russian parliament building on fire. By the time the day was over, Yeltsin's troops had killed approximately 500 people and wounded nearly 1,000. Still, Clinton stood with Yeltsin. He provided ludicrous cover for Yeltsin's massacre , claiming that "I don't see that he had any choice . If such a thing happened in the United States, you would have expected me to take tough action against it." Clinton's Secretary of State, Warren Christopher, said that the US supported Yeltsin's suspension of parliament in these "extraordinary times."
In 1996, elections were looming, and America's hegemonic dreams still needed Yeltsin in power. But it wasn't going to happen without help. Yeltsin's popularity was nonexistent, and his approval rating was at about 6%. According to Cohen, Clinton's interference in Russian politics, his "crusade" to "reform Russia," had by now become official policy . And so, America boldly interfered directly in Russian elections . Three American political consultants, receiving "direct assistance from Bill Clinton's White House," secretly ran Yeltsin's reelection campaign. As Time magazine broke the story , "For four months, a group of American political consultants clandestinely participated in guiding Yeltsin's campaign."
"Funded by the US government," Cohen reports, Americans "gave money to favored Russian politicians, instructed ministers, drafted legislation and presidential decrees, underwrote textbooks, and served at Yeltsin's reelection headquarters in 1996."
More incriminating still is that Richard Dresner, one of the three American consultants, maintained a direct line to Clinton's Chief Strategist, Dick Morris. According to reporting by Sean Guillory , in his book, Behind the Oval Office , Morris says that, with Clinton's approval, he received weekly briefings from Dresner that he would give to Clinton. Based on those briefings, Clinton would then provide recommendations to Dresner through Morris.
Then ambassador to Russia, Thomas Pickering, even pressured an opposing candidate to drop out of the election to improve Yeltsin's odds of winning.
The US not only helped run Yeltsin's campaign, they helped pay for it. The US backed a $10.2 billion International Monetary Fund (IMF) loan for Russia, the second-biggest loan the IMF had ever given. The New York Times reported that the loan was "expected to be helpful to President Boris N. Yeltsin in the presidential election in June." The Times explained that the loan was "a vote of confidence" for Yeltsin who "has been lagging well behind in opinion polls" and added that the US Treasury Secretary "welcomed the fund's decision."
Yeltsin won the election by 13%, and Time magazine's cover declared: "Yanks to the rescue: The secret story of how American advisers helped Yeltsin win". Cohen reports that the US ambassador to Russia boasted that "without our leadership we would see a considerably different Russia today." That's a confession of election interference.
Asserting its right as the unipolar victor of a Cold War it never won, betraying the central promise of the negotiated end of the cold war by engulfing Russia's neighbors, arming those nations against its written and signed word and stealing all Russian hope in capitalism and democracy by kidnapping and torturing Russian capitalism and democracy, the roots of the new cold war were not planted by Russian lies and aggression, as the doctrinal Western version teaches, but by the American lies and aggression that the fact checked, demythologized version of history reveals.
Ted Snider writes on analyzing patterns in US foreign policy and history.
|
|
|
Sep 15, 2019 | economistsview.typepad.com
likbez -> anne... , September 14, 2019 at 08:30 PM
"The US served as a benevolent hegemon, administering the occasional rap on the knuckles to those acting in bad faith"USA foreign policy since 70th was controlled by neocons who as a typical Trotskyites (neoliberalism is actually Trotskyism for the rich) were/are hell-bent of world domination and practice gangster capitalism in foreign policy.
Bolton attitude to UN is very symptomatic for the neocons as a whole.
Madeline "not so bright" Allbright was the first swan. As well as Clinton attempts to bankrupt and subdue Russia and criminal (in a sense of no permission from the UN) attack on Yugoslavia. Both backfired: Russia became permanently hostile. The fact he and his coterie were not yet tried by something like Nuremberg tribunal is only due to the USA dominance at this stage of history.
The truth is that after the dissolution of the USSR the USA foreign policy became completely unhinged. And inside the country the elite became cannibalistic, as there was no external threat to its dominance in the form of the USSR.
The USA stated to behave like a typical Imperial state (New Rome, or, more correctly, London) accepting no rules/laws that are not written by themselves (and when it is convenient to obey them) with the only difference from the classic imperial states that the hegemony it not based on the military presence/occupation ( like was the case with British empire)
Although this is not completely true as there are 761 US Military Bases across the planet and only 46 Countries with no US military presence. Of them, seven countries with 13 New Military Bases were added since 09/11/2001.In 2001 the US had a quarter million troops posted abroad.
Still as an imperial state and the center of neoliberal empire the USA relies more on financial instruments and neoliberal comprador elite inside the country.
I recently learned from https://akarlin.com/2010/04/on-liberasts-and-liberasty/ that the derogatory term for the neoliberal part of the Russian elite is "liberasts" and this term gradually slipping into English language ( http://onlineslangdictionary.com/meaning-definition-of/liberast ;-)
With the collapse of neoliberal ideology in 2008 the USA centered neoliberal empire experiences first cracks. Brexit and election of Trump widened the cracks in a sense of further legitimizing the ruling neoliberal elite (big middle finger for Hillary was addressed to the elite as whole)
If oil price exceed $100 per barrel there will yet another crack or even repetition of the 2008 Great Recession on a new level (although we may argue that the Great Recession never ended and just entered in Summers terms "permanent stagnation: phase)
Although currently with a bully at the helm the USA empire still going strong in forcing vassals and competitors to reconsider their desire to challenge the USA that situation will not last. Trump currently is trying to neutralize the treat from China by rejecting classic neoliberal globalization mechanism as well as signed treaties like WTO. He might be successful in the short run but in the "long run" that undermines the USA centered neoliberal empire and speed up its demise. .
In the long run the future does not look too bright as crimes committed by the USA during triumphal period of neoliberalism hangs like albatross around the USA neck.
EU now definitely wants to play its own game as Macron recently stated and which Merkel tacitly supports. If EU allies with Russia it will became No.1 force in the world with the USA No. 2. With severe consequences for the USA.
If Russia allied with China the USA Np.1 position will hinge of keeping EU vassals in check and NATO in place. Without them it will became No.2 with fatal consequences for the dollar as world reserve currency and sudden change of the USA financial position due to the level of external debt and requires devaluation of the dollar.
Looks like 75 year after WWII the world started to self-organize a countervailing force trying to tame the USA with some interest expressed by such players as EU, Russia, China, India, Iran, Turkey, Pakistan and even Saudi Arabia. As well as ( in the past; and possibly in the future as neoliberal counterrevolutions in both countries probably will end badly) by Brazil and Argentina.
Only Canada, Australia and probably UK can be counted as the reliable parts of the USA empire. That's not much.
|
|
|
Aug 31, 2019 | Chris Fraser @ChrisFraser_HKU • Aug 27 \z
Replying to @edennnnnn_ @AMFChina @lihkg_forum
A related resource that deserves wide circulation:
CHENOWETH: I think it really boils down to four different things. The first is a large and diverse participation that's sustained.
The second thing is that [the movement] needs to elicit loyalty shifts among security forces in particular, but also other elites. Security forces are important because they ultimately are the agents of repression, and their actions largely decide how violent the confrontation with -- and reaction to -- the nonviolent campaign is going to be in the end. But there are other security elites, economic and business elites, state media. There are lots of different pillars that support the status quo, and if they can be disrupted or coerced into noncooperation, then that's a decisive factor.
The third thing is that the campaigns need to be able to have more than just protests; there needs to be a lot of variation in the methods they use.
The fourth thing is that when campaigns are repressed -- which is basically inevitable for those calling for major changes -- they don't either descend into chaos or opt for using violence themselves. If campaigns allow their repression to throw the movement into total disarray or they use it as a pretext to militarize their campaign, then they're essentially co-signing what the regime wants -- for the resisters to play on its own playing field. And they're probably going to get totally crushed.
Wai Sing-Rin @waisingrin • Aug 27
Replying to @ChrisFraser_HKU @edennnnnn_ and 2 others
Anyone who watched the lone frontliner (w translator) sees the frontliners are headed for disaster. They're fighting just to fight with no plans nor objectives.
They see themselves as heroes protecting the HK they love. No doubt their sincerity, but there are 300 of them left.
|
|
|
Sep 07, 2019 | www.zerohedge.com
Tunga , 12 minutes ago link
Oh those securities!
""Certain key unknown figures in the Federal Reserve may have 'conspired' with key unknown figures at the Bank of New York to create a situation where $240 billion in off balance sheet securities created in 1991 as part of an official covert operation to overthrow the Soviet Union, could be cleared without publicly acknowledging their existence. These securities, originally managed by Cantor Fitzgerald, were cleared and settled in the aftermath of September 11th
through the BoNY. The $100 billion account balance bubble reported by the Wall Street Journalas being experienced in the BoNY was tip of a three day operation, when these securities were moved from off-balance-sheet to the balance sheet.
Tunga , 12 minutes ago link
pparalegal , 3 minutes ago linkhttps://www.newyorkfed.org/medialibrary/media/research/epr/02v08n2/0211flempdf.pdf
Oops. Building 7 and all the records gone in a collapsed vertical pancake. What a shame.
|
|
|
Sep 02, 2019 | www.nakedcapitalism.com
ambrit , , August 31, 2019 at 11:55 am
Thatcher was an English politico. It is not what she said, but what she did that counts. She is probably down in Dante's Inferno, Ring 8, sub-rings 7-10. (Frauds and false councilors.) See, oh wayward sinners: http://danteworlds.laits.utexas.edu/circle8b.html
The Rev Kev , , September 2, 2019 at 12:37 am
Ring 8, sub-rings 7-10? She will probably find Milton Friedman in the basement there.
ambrit , September 2, 2019 at 7:09 am
Ah, you think that Milton should be at the bottom, eh? Then, I hope that he knows how to ice skate. (He was the worst kind of 'class traitor.' [His parents were small store owner/managers.])
Ring 8 of the Inferno is for 'frauds' of all sorts, sub-rings 7-10 are reserved for Thieves, Deceivers, Schismatics, and Falsifiers. Maggie should feel right at home there.
|
|
|
Sep 02, 2019 | www.zerohedge.com
Authored by Jeff Thomas via InternationalMan.com,Years ago, Doug Casey mentioned in a correspondence to me, "Empires fall from grace with alarming speed."
Every now and then, you receive a comment that, although it may have been stated casually, has a lasting effect, as it offers uncommon insight. For me, this was one of those and it's one that I've kept handy at my desk since that time, as a reminder.
I'm from a British family, one that left the UK just as the British Empire was about to begin its decline. They expatriated to the "New World" to seek promise for the future.
As I've spent most of my life centred in a British colony – the Cayman Islands – I've had the opportunity to observe many British contract professionals who left the UK seeking advancement, which they almost invariably find in Cayman. Curiously, though, most returned to the UK after a contract or two, in the belief that the UK would bounce back from its decline, and they wanted to be on board when Britain "came back."
This, of course, never happened. The US replaced the UK as the world's foremost empire, and although the UK has had its ups and downs over the ensuing decades, it hasn't returned to its former glory.
And it never will.
If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal. Whether we're looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that's existed at one time, history is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it's fallen.
But of what importance is this to us today?
Well, today, the US is the world's undisputed leading empire and most Americans would agree that, whilst it's going through a bad patch, it will bounce back and might even be better than ever.
Not so, I'm afraid. All empires follow the same cycle. They begin with a population that has a strong work ethic and is self-reliant. Those people organize to form a nation of great strength, based upon high productivity.
This leads to expansion, generally based upon world trade. At some point, this gives rise to leaders who seek, not to work in partnership with other nations, but to dominate them, and of course, this is when a great nation becomes an empire. The US began this stage under the flamboyant and aggressive Teddy Roosevelt.
The twentieth century was the American century and the US went from victory to victory, expanding its power.
But the decline began in the 1960s, when the US started to pursue unwinnable wars, began the destruction of its currency and began to expand its government into an all-powerful body.
Still, this process tends to be protracted and the overall decline often takes decades.
So, how does that square with the quote, "Empires fall from grace with alarming speed"?
Well, the preparation for the fall can often be seen for a generation or more, but the actual fall tends to occur quite rapidly.
What happens is very similar to what happens with a schoolyard bully.
The bully has a slow rise, based upon his strength and aggressive tendency. After a number of successful fights, he becomes first revered, then feared. He then takes on several toadies who lack his abilities but want some of the spoils, so they do his bidding, acting in a threatening manner to other schoolboys.
The bully then becomes hated. No one tells him so, but the other kids secretly dream of his defeat, hopefully in a shameful manner.
Then, at some point, some boy who has a measure of strength and the requisite determination has had enough and takes on the bully.
If he defeats him, a curious thing happens. The toadies suddenly realise that the jig is up and they head for the hills, knowing that their source of power is gone.
Also, once the defeated bully is down, all the anger, fear and hatred that his schoolmates felt for him come out, and they take great pleasure in his defeat.
And this, in a nutshell, is what happens with empires.
A nation that comes to the rescue in times of genuine need (such as the two World Wars) is revered. But once that nation morphs into a bully that uses any excuse to invade countries such as Afghanistan, Libya, Iraq and Syria, its allies may continue to bow to it but secretly fear it and wish that it could be taken down a peg.
When the empire then starts looking around for other nations to bully, such as Iran and Venezuela, its allies again say nothing but react with fear when they see the John Boltons and Mike Pompeos beating the war drums and making reckless comments.
At present, the US is focusing primarily on economic warfare, but if this fails to get the world to bend to its dominance, the US has repeatedly warned, regarding possible military aggression, that "no option is off the table."
The US has reached the classic stage when it has become a reckless bully, and its support structure of allies has begun to de-couple as a result.
At the same time that allies begin to pull back and make other plans for their future, those citizens within the empire who tend to be the creators of prosperity also begin to seek greener pastures.
History has seen this happen countless times. The "brain drain" occurs, in which the best and most productive begin to look elsewhere for their future. Just as the most productive Europeans crossed the Pond to colonise the US when it was a new, promising country, their present-day counterparts have begun moving offshore.
The US is presently in a state of suspended animation. It still appears to be a major force, but its buttresses are quietly disappearing. At some point in the near future, it's likely that the US government will overplay its hand and aggress against a foe that either is stronger or has alliances that, collectively, make it stronger.
Basil1931 , 30 minutes ago link
Ms No , 38 minutes ago linkThe greatest (so called) threats to America- the Russians, Chinese, Iranians, North Koreans, ISIS, ( fill in the blank for the latest overseas bogeyman-of-the-week ) pale into a wisp beside the ongoing disintegration of American traditional family life. Self-discipline, self sacrifice and self restraint are the prices which must be paid for a civilization to survive, much less flourish, and Americans are increasingly unwilling to pay up. The America of a generation or two down the road will have the social cohesion of El Salvador.
ohm , 55 minutes ago linkYou also cant warn people about the collapse of empire either. People notoriously go into denial about it and it shocks the **** out of everybody. Since empires bluff and bluster at the end its all to easy for people want to believe.
Being that history is always written by the tyrant of the time (which in our case was definitely behind the two last empires and a big player in Rome as and Spain as well) people are also led to believe that empire is a desireable state of cicumstance. It never was. Its the ambitions and conquistador actions of the collective psychopath. They feed on the strength of civilizations and utilize it for megalomaniac ambitions over power of others and power over everything.
HillaryOdor , 46 minutes ago linkThose of you hoping for the end of American Empire need to think about what would replace it. if you think that the world would enter the age of Aquarius and peace will rule the planet you are extremely naive and stupid. If you think that the Chinese would be more benign rulers you are mistaken. The only reason China doesn't use its military to dominate other countries is because it is kept in check by the US.
ohm , 41 minutes ago linkYou are completely delusional. The world is not better off under American stewardship. We don't need and shouldn't want anything to replace it. We don't need and shouldn't want any empire ruling the world. We would be better off without any state at all, so we could finally be free people.
And no it probably wouldn't be better off under the Chinese. Although if the world stopped respecting American IP law, that would be a huge positive step forward.
In the real world, Chinese terrorists are just as bad as American terrorists. Despite the most popular hypnosis gripping the American psyche, you can't have liberty or justice as long as either one is in charge. Whether the Chinese would be worse is debatable. It's not like America has some great track record to compete against. Their reign has been a complete disaster for human rights.
HillaryOdor , 34 minutes ago linkWe don't need any empire ruling the world.
Agreed. But wishing that something isn't going to happen doesn't stop it from happening.
simpson seers , 43 minutes ago linkPretending you are better off under the current arrangement doesn't make it so.
Pretending you have any control over the future of world politics doesn't make it so.
ohm , 42 minutes ago link'Those of you hoping for the end of American Empire need to think about what would replace it '
for starters, peace would replace it, fake phoney ******.......
ohm , 42 minutes ago linkWhy? Do you have a historical example?
SHsparx , 37 minutes ago linkWhy? Do you have a historical example?
Ms No , 29 minutes ago linkExpecting the inevitable and hoping for something are two different things.
ultramaroon , 11 minutes ago linkIf China became the new empire we wouldnt live under it. It would be at least 100 years out. This empire will screw everybody epically first, plus we have decline weather patterns with super solar grand minimum. Also those people's who may see that next empire will deal with whatever circumstances present themselves and they wont give one **** what we think about it.
Basically power has kept moving west. Nobody will forget the depravity of this one. If written about accurately this one will be remembered most for the medical tyranny and intentional damage it did to human beings through injections and modified good supply, as well as moral depravity and proxy sadistic terrorism. Remember empire backed terrorist groups trafficked children and harvested organs. You can miss it if you want, few will.
Ms No , 8 minutes ago linkI do not _hope_ for an end of the American Empire, and I dread what is going to replace it. Howsoever, no empire lasts forever, and our empire is near its end. The Chinese are relentlessly cruel, and that's in their genotype. I probably won't live to see them take over the scraps and bits and pieces of our former empire. Those who are alive and in the prime of their lives when that happens will suffer unimaginably while they live, and their blood will cry out from the grave after they die. It makes me so heart-sick I can't bear to think about it for long, but our progeny will be forced to live it without let or hindrance.
SmallerGovNow2 , 1 hour ago linkLets find out the whole details of what they have done to our biology and our children's first before we say how cruel China might be. For starters look at what US and British did in Africa compared to China and Russia's involvement there. They are doing deals and not killing anybody, same with Venezuela.
SmallerGovNow2 , 1 hour ago linkWhere else you going to go? What nation ISN'T broke? Europe is going to hell. So is South America. Africa has always been hell. Asia? Look what's going down in Hong Kong. China's broke. Make no mistake, the USA is in decline. But so is the rest of the world...
perikleous , 1 hour ago linkI'd say it's a race to the bottom but it's really that everyone is falling off the cliff at the same time...
Argentumentum , 1 hour ago linkregardless of what is printed China is not falling, they have a plan and have only advanced it. The debt side will not hurt them because they have been poor before and they have a route to success. They do not have resources but the industrial side is needed everywhere in the world. We are talking about a nation that literally prospered off of our garbage and resells it back to us! Think about it we use something up and pay them to take it away, they recycle it and resell it to us again and moved a nation 4x our population forward!
You really think debt will hurt them, especially the way the US determines debt! A huge portion of it is in the infrastructucture in China and along the BRI which will have returns over time, just as if we in the states rebuilt all our infrastructure by living wage employment rather than MIC investment!
He–Mene Mox Mox , 1 hour ago linkYes, all are broke. Assisted suicides of countries all over the world. Emphasise on "assisted".
Nations have been demoralized (the US most certainly, check Yuri Bezmenov) we are in destabilization phase already, collapse has to be next, it is unavoidable now. This will not end well, ignore at your own risk!
I am not talking about countries, just some Life Hedge Regions left in the world. People with brains and resources, you don need a Life Hedge Property! Away from Northern Hemisphere, away from Ring of Fire, etc... Get in touch. lifehedge(at) protonmail.com
perikleous , 1 hour ago linkWhat got America into trouble was when Americans who thought of themselves as being "exceptional" became exceptionally stupid. The best and the brightest have already left America. Any wonder why we now depend on Russia to send our astronauts up on their rockets into space, or depend on China, South Korea, and Japan for our electronic products, or why better health care is found in other places outside the U.S., why our educational system has become poorer than what it was 60 years ago, etc.,?
SmallerGovNow2 , 1 hour ago linkWhen we decided to financialize everything and make nothing but investments we crippled our advancement.
When we decided to take the brightest minds in the world and recruit them into the US and then rather than advance the world with true science, we offer them lucrative money to enter financial markets to use their knowledge in that field.
We take the ones with morals and principles that choose to actually remain in science and then corrupt them over time with money/fame to regurgetate whatever their contractor chooses or lose funding for their projects.
We have corrupted every aspect of advancement and now just use our fake printed money to force the desperate to bend to our will.
Dump , 1 hour ago linkWhere do you see this better health care?
And you're saying the best and brightest left the USA for Russia, China, South Korea, and Japan? I don't think so...
The Herdsman , 1 hour ago linkGood read on the subject of empires Sir John Glubb - The fate of empires and Search for survival.
We are probably near the end of the American Empire. And a fascinating by product of the HK protests is that we may well be near the end of Chinese Communism.
Nothing moves forward in a straight line. They move up and down. Empires are no exception. The Romans had their ups and downs throughout the course of their empire. You never know when a down cycle is the end but people who want it to end will always write articles like this.
American dominance might be drawing to an end....or it might be gearing up to go another 200 years. Nobody knows so it's a waste of time to speculate.
|
|
|
intpolicydigest.org
Mikhail Khodorkovsky was found guilty of fraud related to his control of Siberian oil fields through his Yukos corporation and was sentenced to nine years in prison on this date in 2005. Khodorkovsky, who was behind bars until Vladimir Putin pardoned him in 2013, is half-Jewish (on his father's side).Many of the Russian oligarchs, most of whom exploited their political connections during the privatization years under Boris Yeltsin's highly corrupt government to become hugely wealthy, are similarly half-Jewish or Jewish, including Boris Berezovsky, who took over Russia's main television channel and died under uncertain circumstances (likely suicide) in 2013; Alexander Abramov, a steel magnate; Mikhail Fridman, a banker; Roman Abramovich, a younger billionaire investor; Viktor Vekselberg, an aluminum tycoon; and Leonid Mikhelson, a natural-gas billionaire, and a half-dozen others.
The shock-capitalism that vaulted these men to the Forbes list of billionaires is known in Russia as the katastroika and "brought in its wake mass pauperisation and unemployment," writes Seumas Milne in The Guardian , "wild extremes of inequality; rampant crime; virulent antisemitism and ethnic violence; combined with legalised gangsterism on a heroic scale and precipitous looting of public assets. . . .
By the late 1990s, national income had fallen by more than 50 percent(compare that with the 27 percent drop in output during the great American depression), investment by 80 percent, real wages by half, and meat and dairy herds by 75 percent. . . . while epidemics of cholera and typhus . . . re-emerged, millions of children suffer[ed] from malnutrition and adult life expectancy . . . plunged." Several of the oligarchs were prosecuted and harassed by Putin's government between 2000 and 2004, before an unofficial agreement was struck to permit most of them to keep their lives and their fortunes as long as they demurred from opposing Putin's political power.
"The oligarchs, idiotically rich in a country that was largely poor, and given to parading their wealth in a manner that makes American hip-hoppers look like an especially reticent community of Amish farmers, could certainly have given any former Soviet citizen pause to wonder, as he queued for beetroot, what the proletarian revolution had been for. The oligarchs, not content with buying companies, villas, yachts, planes and the most beautiful of Russia's beautiful women, also bought power. In 1996, they connived to engineer the re-election of the politically and physically ailing Boris Yeltsin. In 2000, they helped steer Yeltsin's successor into power -- Vladimir Putin, a saturnine former spook with the KGB, and its descendant organisation, the FSB. This, as Russian Godfathers demonstrates, may have been the moment at which the oligarchs out-clevered themselves." –Andrew Mueller, The Guardian
|
|
|
Aug 31, 2019 | www.nakedcapitalism.com
A new opinion poll released by NBC News and the Wall Street Journal last Sunday shows that 70% of Americans are "angry" because our political system seems to only be working for the insiders with money and power. Both Senator Bernie Sanders and Senator Elizabeth Warren have also reflected on this sentiment during their campaigns. Sanders has said that we live in a "corrupt political system designed to protect the wealthy and the powerful." Warren said it's a "rigged system that props up the rich and powerful and kicks dirt on everyone else."
A New York Times opinion article written by the political scientist Greg Weiner felt compelled to push back on this message, writing a column with the title, The Shallow Cynicism of 'Everything Is Rigged'. In his column, Weiner basically makes the argument that believing everything is corrupt and rigged is a cynical attitude with which it is possible to dismiss political opponents for being a part of the corruption. In other words, the Sanders and Warren argument is a shortcut, according to Weiner, that avoids real political debate.
Joining me now to discuss whether it makes sense to think of a political system as rigged and corrupt, and whether the cynical attitude is justified, is someone who should know a thing or two about corruption: Bill Black. He is a white collar criminologist, former financial regulator, and associate professor of economics and law at the University of Missouri, Kansas City. He's also the author of the book, The Best Way to Rob a Bank is to Own One. Thanks for joining us again, Bill.
BILL BLACK: Thank you.
GREG WILPERT: As I mentioned that the outset, it seems that Sanders and Warren are in effect taking an open door, at least when it comes to the American public. That is, almost everyone already believes that our political and economic system is rigged. Would you agree with that sentiment that the system is corrupt and rigged for the rich and against pretty much everyone else but especially the poor? What do you think?
BILL BLACK: One of the principal things I study is elite fraud, corruption and predation. The World Bank sent me to India for months as an anti-corruption alleged expert type. And as a financial regulator, this is what I dealt with. This is what I researched. This is a huge chunk of my life. So I wouldn't use the word, if I was being formal in an academic system, "the system." What I would talk about is specific systems that are rigged, and they most assuredly are rigged.
Let me give you an example. One of the most important things that has transformed the world and made it vastly more criminogenic, much more corrupt, is modern executive compensation. This is not an unusual position. This is actually the normal position now, even among very conservative scholars, including the person who was the intellectual godfather of modern executive compensation, Michael Jensen. He has admitted that he spawned unintentionally a monster because CEOs have rigged the compensation system. How do they do that? Well, it starts even before you get hired as a CEO. This is amazing stuff. The standard thing you do as a powerful CEO is you hire this guy, and he specializes in negotiating great deals for CEOs. His first demand, which is almost always given into, is that the corporation pay his fee, not the CEO. On the other side of the table is somebody that the CEO is going to be the boss of negotiating the other side. How hard is he going to negotiate against the guy that's going to be his boss? That's totally rigged.
Then the compensation committee hires compensation specialists who–again, even the most conservative economists agree it is a completely rigged system. Because the only way they get work is if they give this extraordinary compensation. Then, everybody in economics admits that there's a clear way you should run performance pay. It should be really long term. You get the big bucks only after like 10 years of success. In reality, they're always incredibly short term. Why? Because it's vastly easier for the CEO to rig the short-term reported earnings. What's the result of this? Accounting profession, criminology profession, economics profession, law profession. We've all done studies and all of them say this perverse system of compensation causes CEOs to (a) cheat and (b) to be extraordinarily short term in their perspective because it's easier to rig the short-term reported results. Even the most conservative economists agree that's terrible for the economy.
What I've just gone through is a whole bunch of academic literature from over 40-plus years from top scholars in four different fields. That's not cynicism. That's just plain facts if you understand the system. People like Elizabeth Warren and Bernie Sanders, they didn't, as you say, kick open an open door. They made the open door. It's not like Elizabeth Warren started talking about this six months ago when she started being a potential candidate. She has been saying this and explaining in detail how individual systems are rigged in favor of the wealthy for at least 30 years of work. Bernie Sanders has been doing it for 45 years. This is what the right, including the author of this piece who is an ultra-far right guy, fear the most. It's precisely what they fear, that Bernie and Elizabeth are good at explaining how particular systems are rigged. They explain it in appropriate detail, but they're also good in making it human. They talk the way humans talk as opposed to academics.
That's what the right fear is more than anything, that people will basically get woke. In this, it's being woke to how individual systems have been rigged by the wealthy and powerful to create a sure thing to enrich them, usually at our direct expense.
GREG WILPERT: I think those are some very good examples. They're mostly from the realm of economics. I want to look at one from the realm of politics, which specifically Weiner makes. He cites Sanders, who says that the rich literally buy elections, and Weiner counters this by saying that, "It is difficult to identify instances in American history of an electoral majority wanting something specific that it has not eventually gotten." That's a pretty amazing statement actually, I think, for him to say when you look at the actual polls of what people want and what people get. He then also adds, "That's not possible to dupe the majority with advertising all of the time." What's your response to that argument?
BILL BLACK: Well, actually, that's where he's trying to play economist, and he's particularly bad at economics. He was even worse at economics than he is at political science, where his pitch, by the way is–I'm not overstating this–corruption is good. The real problem with Senator Sanders and Senator Warren is that they're against corruption.
Can you fool many people? Answer: Yes. We have good statistics from people who actually study this as opposed to write op-eds of this kind. In the great financial crisis, one of the most notorious of the predators that targeted blacks and Latinos–we actually have statistics from New Century. And here's a particular scam. The loan broker gets paid more money the worse the deal he gets you, the customer, and he gets paid by the bank. If he can get you to pay more than the market rate of interest, then he gets a kickback, a literal kickback. In almost exactly half of the cases, New Century was able to get substantially above market interest rates, again, targeted at blacks and Latinos.
We know that this kind of predatory approach can succeed, and it can succeed brilliantly. Look at cigarettes. Cigarettes, if you use them as intended, they make you sick and they kill you. It wasn't that very long ago until a huge effort by pushback that the tobacco companies, through a whole series of fake science and incredible amounts of ads that basically tried to associate if you were male, that if you smoked, you'd have a lot of sex type of thing. It was really that crude. It was enormously successful with people in getting them to do things that almost immediately made them sick and often actually killed them.
He's simply wrong empirically. You can see it in US death rates. You can see it in Hell, I'm overweight considerably. Americans are enormously overweight because of the way we eat, which has everything to do with how marketing works in the United States, and it's actually gotten so bad that it's reducing life expectancy in a number of groups in America. That's how incredibly effective predatory practices are in rigging the system. That's again, two Nobel Laureates in economics have recently written about this. George Akerlof and Shiller, both Nobel Laureates in economics, have written about this predation in a book for a general audience. It's called Phishing with a P-H.
GREG WILPERT: I want to turn to the last point that Weiner makes about cynicism. He says that calling the system rigged is actually a form of cynicism. And that cynicism, the belief that everything and everyone is bad or corrupt avoids real political arguments because it tires everyone you disagree with as being a part of that corruption. Would you say, is the belief that the system is rigged a form of cynicism? And if it is, wouldn't Weiner be right that cynicism avoids political debate?
BILL BLACK: He creates a straw man. No one has said that everything and everyone is corrupt. No one has said that if you disagree with me, you are automatically corrupt. What they have given in considerable detail, like I gave as the first example, was here is exactly how the system is rigged. Here are the empirical results of that rigging. This produces vast transfers of wealth to the powerful and wealthy, and it comes at the expense of nearly everybody else. That is factual and that needs to be said. It needs to be said that politicians that support this, and Weiner explicitly does that, says, we need to go back to a system that is more openly corrupt and that if we have that system, the world will be better. That has no empirical basis. It's exactly the opposite. Corruption kills. Corruption ruins economies.
The last thing in the world you want to do is what Weiner calls for, which he says, "We've got to stop applying morality to this form of crime." In essence, he is channeling the godfather. "Tell the Don it wasn't personal. It was just business." There's nothing really immoral in his view about bribing people. I'm sorry. I'm a Midwesterner. It wasn't cynicism. It was morality. He says you can't compromise with corruption. I hope not. Compromising with corruption is precisely why we're in this situation where growth rates have been cut in half, why wage growth has been cut by four-fifths, why blacks and Latinos during the great financial crisis lost 60% to 80% of their wealth in college-educated households. That's why 70% of the public is increasingly woke on this subject.
GREG WILPERT: Well, we're going to leave it there. I was speaking to Bill Black, associate professor of economics and law at the University of Missouri, Kansas City. Thanks again, Bill, for having joined us today.
BILL BLACK: Thank you.
GREG WILPERT: And thank you for joining The Real News Network.
fdr-fan , August 31, 2019 at 2:13 am
Well, Sanders certainly knows that elections are rigged. But he's not quite right when he says that money does the rigging. It would be more accurate to say that powerful people are powerful because they're criminals, and they're rich because they're criminals.
Money is a side effect, not the driver. Specific example: Hillary and Bernie are in the same category of net worth, but Bernie isn't powerful. The difference is that Bernie ISN'T willing to commit murder and blackmail to gain power.
Lambert Strether , August 31, 2019 at 3:31 am
> Hillary and Bernie are in the same category of net worth
Clinton's net worth (says Google) is $45 million; Sanders $2.5 million. So, an order of magnitude difference. I guess that puts Sanders in the 1% category, but Clinton is much closer to the 0.1% category than Sanders.
Steve H. , August 31, 2019 at 6:57 am
There's also a billion-dollar foundation in the mix.
We had our choice of two New York billionaires in the last presidential election. How is this not accounted for? It's like the bond market, the sheer weight carries its own momentum.
Very similar to CEO's. I may not own a private jet, but if the company does, and I control the company, I have the benefit of a private jet. I don't need to own the penthouse to live in it.
Bugs Bunny , August 31, 2019 at 4:18 am
I despise HRC as well but those kinds of accusations would need some real evidence to back them up. Not a helpful comment.
Sorry, but I had to call that out.
Ian Perkins , August 31, 2019 at 10:26 am
"We came, we saw, he died. Tee hee hee!"
"Did it have anything to do with your visit?"
"I'm sure it did."
From a non-legal perspective at least, that makes her an accessory to murder, doesn't it?Oh , August 31, 2019 at 10:18 am
"Money talks and everything else walks". Don't kid yourself; money is the driver.
Susan the other` , August 31, 2019 at 11:38 am
there's a solution for that
Leroy , August 31, 2019 at 11:53 am
Perhaps you can elaborate on the "murder and blackmail" Mr. Trump !!
vlade , August 31, 2019 at 2:15 am
In the treaser, it says "prevents evidence", I don't think Bill would do that :)
Off The Street , August 31, 2019 at 10:45 am
Treaser -- > Treason
+1Tyronius , August 31, 2019 at 2:57 am
Is it fair to say the entire system is rigged when enough interconnected parts of it are rigged that no matter where one turns, one finds evidence of corruption? Because like it or not, that's where we are as a country.
Spoofs desu , August 31, 2019 at 7:15 am
Indeed well said
Susan the other` , August 31, 2019 at 11:42 am
Yes. And it is also fair to say, and has been said by lots of cynics over the centuries, that both democracy and capitalism sow the seeds of their own destruction.
OpenThePodBayDoorsHAL , August 31, 2019 at 3:44 am
Burns me to see yet another "water is not wet" argument being foisted by the NYT, hard to imagine another reason the editorial board pushed for this line *except* to protect the current corrupt one percenters who call their shots. Once Liz The Marionette gets appointed we might get some fluff but the rot will persist, eventually rot becomes putrefaction and the polity dies. Gore Vidal called America and Christianity "death cults".
Oh , August 31, 2019 at 10:21 am
Apt description of Liz.
"I'm a marionette, I'm a marionette, just pull the string" – ABBABugs Bunny , August 31, 2019 at 4:23 am
Another instance where the top comments "Reader Picks" in a NYT op-ed are much more astute than the NYT picks
https://www.nytimes.com/2019/08/25/opinion/trump-warren-sanders-corruption.html#commentsContainer
People get it.
inode_buddha , August 31, 2019 at 8:28 am
"Due to technical difficulties, comments are unavailable"
Pisses me off that I gave the propaganda rag of note a click and didn't even get the joy of the comments section. I'm sure there's some cynical reason why
Ian Perkins , August 31, 2019 at 10:28 am
I got there first time. No doubt some cynical reason
Barbara , August 31, 2019 at 10:56 am
NYT PicksReader PicksAll
Ronald Weinstein commented August 26
Ronald Weinstein
New YorkAug. 26
Times PickShallow cynicism vs profound naivete. I don't know what to chose.
57 RecommendJeff W , August 31, 2019 at 11:41 am
People do get it. That struck me, too.
The other thing is that the NYT runs this pretty indefensible piece by a guy who is a visiting scholar at the American Enterprise Institute. Just how often does NYT -- whose goal, according to its executive editor, "should be to understand different views" -- run a piece from anyone who is leftwing? What's the ratio of pro-establishment, pro-Washington consensus pieces to those that are not? Glenn Greenwald points out that the political spectrum at the NYT op-ed page "spans the small gap from establishment centrist Democrats to establishment centrist Republicans." That, in itself, is consistent with the premise that the system is, indeed, rigged.
Spoofs desu , August 31, 2019 at 7:09 am
I think we have to drill down another level and ask ourselves a more fundamental question "why is cynicism necessarily bad to begin with?" Black's response of parsing to individual systems as being corrupt is playing into the NYT authors trap, sort to speak.
This NYT article is another version of the seemingly obligatory attribute of the american character; we must ultimately be optimistic and have hope. Why is that useful? Or maybe more importantly, to whom is that useful? What is the point?
In my mind (and many a philosopher), cynicism is a very healthy, empowering response to a world whose institutional configuration is such that it will to fuck you over whenever it is expedient to do so.
Furthermore, the act of voting lends legitimacy to an institution that is clearly not legitimate. The institution is very obviously very corrupt. If you really want to change the "system" stop giving it legitimacy; i.e. be cynical, don't vote. The whole thing is a ruse. Boycott it .
Some may say, in a desperate attempt to avoid being cynical, "well, the national level is corrupt but we need to increase engagement at the community level via local elections ", or something like that. This is nothing more than rearranging the chairs on the deck of the titanic. And collecting signature isn't going to help anymore than handing out buckets on the titanic would.
So, to answer my own rhetorical question above, "to whom is it useful to not be cynical?" It is useful to those who want things to continue as they currently are.
So, be cynical. Don't vote. It is an empowering and healthy way to kinda say "fuck you" to the corrupt and not become corrupted yourself by legitimizing it. The best part about it is that you don't have to do anything.
Viva la paz (Hows that for a non cynical salutation?)
jrs , August 31, 2019 at 11:29 am
Uh this sounds like the ultimate allowing things to continue as they currently are, do you really imagine the powers that be are concerned about a low voting rate, and we have one, they don't care, they may even like it that way. Do you really imagine they care about some phantom like perceived legitimacy? Where is the evidence of that?
kiwi , August 31, 2019 at 12:08 pm
Politicians do care about staying in office and will respond on some issues that will cost them enough votes to get booted from office. But it has to be those particular issues in their own backyard; otherwise, they just kind of limp along with the lip service collecting their paychecks.
IMO, it is sheer idiocy to not vote. If you are a voter, politicians will pay some attention to you at least. If you don't vote, you don't even exist to them.
inode_buddha , August 31, 2019 at 7:37 am
"I don't think it should be legal at ALL to become a corporate lobbyist if you've served in Congress," said Ocasio-Cortez. "At minimum there should be a long wait period."
"If you are a member of Congress + leave, you shouldn't be allowed to turn right around&leverage your service for a lobbyist check.
I don't think it should be legal at ALL to become a corporate lobbyist if you've served in Congress."–AOC, as reported by NakedCapitalism on May 31, 2019
Which is worse - bankers or terrorists , August 31, 2019 at 11:45 am
I bet she opens up her lobbying shop in December 2020.
inode_buddha , August 31, 2019 at 7:52 am
It isn't cynical if it is real. Truth is the absolute defense.
Bugs Bunny , August 31, 2019 at 7:58 am
A shrink friend once said "cynicism is the most logical reaction to despair".
Off The Street , August 31, 2019 at 10:52 am
I try to be despairing, but I can't keep up.
Attributed to a generation or two after Lily Tomlin's quote about cynicism.Out of curiosity, would it be cynical to question that political scientist's grant funding or other sources of income? These days, I feel inclined to look at what I'll call the Sinclair Rule* , added to Betteridge's, Godwin's and all those other, ahem, modifications to what used to be an expectation that communication was more or less honest.
* Sinclair Rule, where you add a interpretive filter based on Upton's famous quote: It is difficult to get a man to understand something when his salary depends upon his not understanding it.
jrs , August 31, 2019 at 11:43 am
It's good to look at funding sources. But it's kind of a slander to those who must work for a living when assuming it's paychecks (which we need to live in this system) that corrupt people.
If it's applied to the average working person, maybe it's often true, maybe it has a tendency to push in that direction, but if you think there are no workers that realize the industry they are working in might be destructive, that they may be exploited by such systems but have little choice etc. etc., come now there are working people who are politically aware and do see a larger picture, they just don't have a lot of power to change it much of the time. Does the average working person's salary depend on his not understanding though? No, of course not, it merely depends on him obeying. And obeying enough to keep a job, not always understanding, is what a paycheck buys.
timbers , August 31, 2019 at 7:57 am
With all the evidence of everyday life (airplanes, drug prices, health insurance, Wall Street, CEO pay, the workforce changes in the past 20 years if you've been working those years etc) this Greg better be careful as he might be seen as a Witch to be hanged and burned in Salem, Ma a few hundred years ago.
It's cynical to say it's cynical to believe the system is corrupt.
Greg Weiner is cynic, and his is using his cynicism to dismiss the political arguments of people he disagrees with.
MyMoneysNotGreenAnymore , August 31, 2019 at 8:17 am
And just this week, I found out I couldn't even buy a car unless I'd be willing to sign a mandatory binding arbitration agreement. I was ready to pay and sign all the paperwork, and they lay a document in front of me that reserves for the dealer the right to seek any remedy against me if I harm the dealer (pay with bad check, become delinquent on loan, fail to provide clean title on my trade); but forces me to accept mandatory binding arbitration, with damages limited to the value of the car, for anything the dealer might do wrong.
It is not cynical at all when even car dealers now want a permission slip for any harm they might do to me.
Donald , August 31, 2019 at 8:24 am
Three words -- climate change denial.
Okay, a few more. We are literally facing the possibility of a mass extinction in large part because of dishonesty on the par of oil companies, politicians, and people paid to make bad arguments.
Donald , August 31, 2019 at 8:35 am
A few more words
"Saddam Hussein has WMD's."
"Assad (and by implication Assad's forces alone) killed 500,000 Syrians."
"Israel is just defending itself."
I can't squeeze the dishonesty about the war in Yemen into a short slogan, but I know from personal experience that getting liberals to care when it was Obama's war was virtually impossible. Even under Trump it was hard, until Khashoggi's murder. On the part of politicians and think tanks this was corruption by Saudi money. With ordinary people it was the usual partisan tribal hypocrisy.
dearieme , August 31, 2019 at 11:11 am
Two words: Goebbels Warming.
pretzelattack , August 31, 2019 at 12:36 pm
a lot of gibberish in those 2 words, dearie. are you going to grace us with your keen scientific insights on the issue?
jfleni , August 31, 2019 at 8:30 am
Conclusion: Even before they dress in the AM, they S C R E A M,
G I M M E!!Rodger Malcolm Mitchell , August 31, 2019 at 8:45 am
The motivator is " Gap Psychology ," the human desire to distance oneself from those below (on any scale), and to come nearer to those above.
The rich are rich because the Gap below them is wide, and the wider the Gap, the richer they are .
And here is the important point: There are two ways the rich widen the Gap: Either gain more for themselves or make sure those below have less.
That is why the rich promulgate the Big Lie that the federal government (and its agencies, Social Security and Medicare) is running short of dollars. The rich want to make sure that those below them don't gain more, as that would narrow the Gap.
Off The Street , August 31, 2019 at 10:56 am
Negative sum game, where one wins but the other has to lose more so the party of the first part feels even better about winning. There is an element of sadism, sociopathy and a few other behaviors that the current systems allow to be gamed even more profitably. If you build it, or lobby to have it built, they will come multiple times.
The Rev Kev , August 31, 2019 at 9:07 am
A successful society should be responsive to both threats and opportunities. Any major problems to that society are assessed and changes are made, usually begrudgingly, to adapt to the new situation. And this is where corruption comes into it. It short circuits the signals that a society receives so that it ignores serious threats and elevates ones that are relatively minor but which benefit a small segment of that society. If you want an example of this at work, back in 2016 you had about 40,000 Americans dying to opioids each and every year which was considered only a background issue. But a major issue about that time was who gets to use what toilets. Seriously. If it gets bad enough, a society gets overwhelmed by the problems that were ignored or were deferred to a later time. And I regret to say that the UK is going to learn this lesson in spades.
Ian Perkins , August 31, 2019 at 10:37 am
'Sanders has said that we live in a "corrupt political system designed to protect the wealthy and the powerful." Warren said it's a "rigged system that props up the rich and powerful and kicks dirt on everyone else."'
Yet the rest of the article focuses almost entirely on internal US shenanigans. When it comes to protecting wealth and power, George Kennan hit the nail on the head in 1948, with "we have about 50% of the world's wealth but only 6.3 of its population. This disparity is particularly great as between ourselves and the peoples of Asia. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships, which will permit us to maintain this position of disparity." This, which has underpinned US policy ever since, may not be corrupt in the sense of illegal, but it certainly seems corrupt in the sense of morally repugnant to me.dearieme , August 31, 2019 at 11:16 am
Warren said it's a "rigged system that props up the rich and powerful and kicks dirt on everyone else."
Is she referring to the system of race privilege that she exploited by making a false claim to be a Cherokee, or some other rigged system?
Still, compared to some of the gangsters who have been president I suppose she's been pretty small time in her nefarious activities. So far as I know.
Susan the other` , August 31, 2019 at 12:07 pm
About Kennan's comment. That's interesting because no one questioned the word "wealth". Even tho' we had only 6.3% of the world's population we had 50% of the wealth. The point of that comment had to be that we should "spread the wealth" and we did do just that. Until we polluted the entire planet. I'd like some MMT person to take a long look at that attitude because it is so simplistic. And not like George Kennan at all who was sophisticated to the bone. But that's just more proof of a bred-in-the-bone ignorance about what money really is. In this case Kennan was talking about money, not wealth. He never asked Nepal for advice on gross national happiness, etc. Nor did he calculate the enormous debt burden we would incur for our unregulated use and abuse of the environment. That debt most certainly offsets any "wealth" that happened.
shinola , August 31, 2019 at 11:09 am
Approaching from the opposite direction, if someone were to say "I sincerely believe that the USA has the most open & honest political system and the fairest economic system in human history" would you not think that person to be incredibly naive (or, cynically, a liar)?
There has been, for at least the last couple of decades. a determined effort to do away with corruption – by defining it away. "Citizens United" is perhaps the most glaring example but the effort is ongoing; that Weiner op-ed is a good current example.
jef , August 31, 2019 at 11:34 am
What is cynical is everyone's response when point out that the system is corrupt. They all say " always has been, always will be so just deal with it ".
Susan the other` , August 31, 2019 at 12:14 pm
Strawmannirg has got to be the most cynical behavior in the world. Weiner is the cynic. I think Liz's "the system is rigged " comment invites discussion. It is not a closed door at all. It is a plea for good capitalism. Which most people assume is possible. It's time to define just what kind of capitalism will work and what it needs to continue to be, or finally become, a useful economic ideology. High time.
Susan the other` , August 31, 2019 at 12:25 pm
Another thing. Look how irrational the world, which is now awash in money, has become over lack of liquidity. There's a big push now to achieve an optimum flow of money by speeding up transaction time. The Fed is in the midst of designing a new real-time digital payments system. A speedy accounting and record of everything. Which sounds like a very good idea.
But the predators are busy keeping pace – witness the frantic grab by Facebook with Libra. Libra is cynical. To say the least. The whole thing a few days ago on the design of Libra was frightening because Libra has not slowed down; it has filed it's private corporation papers in Switzerland and is working toward a goal of becoming a private currency – backed by sovereign money no less! Twisted. So there's a good discussion begging to be heard: The legitimate Federal Reserve v. Libra. The reason we are not having this discussion is because the elite are hard-core cynics.
|
|
|
Feb 23, 2019 | www.zerohedge.com
William Dorritt , 3 hours ago link
William Dorritt , 3 hours ago linkLOLITA EXPRESS...ORGY ISLAND...ELITE PEDOPHILE RING ?-2006* George W Bush President: January 20, 2001 – Jan. 20, 2009* Alberto R. Gonzales, Attorney General USA: Feb. 3, 2005–Sept. 17, 2007* Michael Bernard Mukasey, AG. USA: Nov. 9, 2007 – Jan. 20, 2009* Eric Holder, A G. USA: Feb. 3, 2009 – April 27, 2015* Loretta Lynch, Attorney General USA: April 27, 2015 – Present* Assistant U.S. Attorney Marie Villafana* Epstein's Attorneys: Gerald Lefcourt, Roy Black, Ken Starr, Alan Dershowitz.+ "He (Epstein) is an enthusiastic member of the Trilateral Commission and the Council on Foreign Relations."
+ Bill Clinton...26 trips aboard the "Lolita Express"
Jeffrey Epstein's Boeing 727 is equipped with the necessary hardware for him to wake up, roll out of bed, and start trading.
+ Clinton shared more than a dozen flights with a woman who federal prosecutors believe procured underage girls to sexually service Epstein and his friends and acted as a "potential co-conspirator" in his crimes.
+ Socialite Ghislaine Maxwell and Epstein's former assistant Sarah Kellen -- have been repeatedly accused in court filings of acting as pimps. Oxford-educated Maxwell, recently seen dining with Clinton at Nello's on Madison Avenue. Manhattan-London G. Maxwell, daughter of the mysteriously deceased media titan Robert Maxwell.
+ A new lawsuit has revealed how Clinton took multiple trips to Epstein's private island where he 'kept young women as sex slaves'
+ Clinton was also apparently friends with a woman who collected naked pictures of underage girls for Epstein to choose from
+ Clinton invited her (pimp) to Chelsea's wedding
+ According to former child sex slave Virginia Roberts and a class action lawsuit against convicted billionaire pedophile Jeffrey Epstein, former President Bill Clinton was present during sex parties involving up to twenty underage girls at Epstein's secluded island in the Caribbean.
+ 20 girls between the ages of 14 and 17 said were sexually abused by Epstein, Palm Beach Police and FBI
+ 35 female minors sexually abused, Epstein settled lawsuits from more than 30 "Jane Doe" victims since 2008; the youngest alleged victim was 12 years old at the time of her abuse.
..............................Source: FBI & Federal Prosecutors
+ flights on Epstein's planes 1997 to 2005, include Dershowitz (FOX NEWS, Harvard Law), former Treasury Secretary and Harvard president Larry Summers, Naomi Campbell, and scientist Stephen Pinker.
+ In the most recent court documents, filed on December 30, Roberts further claims she was sex-trafficked to "many other powerful men, including numerous prominent American politicians, powerful business executives, foreign presidents, a well-known Prime Minister, and other world leaders." Roberts said Epstein trafficked children to politicians, Wall Streeters and A- listers to curry favor, advance his business, and for political influence.
The FIX
2015 Doc Release by Judge:
Assistant U.S. Attorney Marie Villafana wrote to Epstein lawyer Jay Lefkowitz in a Sept. 19, 2007, email. "I will include our standard language regarding resolving all criminal liability and I will mention 'co-conspirators,' but I would prefer not to highlight for the judge all of the other crimes and all of the other persons that we could charge ... maybe we can set a time to meet, if you want to meet 'off campus' somewhere, that is fine. I will make sure that I have all the necessary decision makers present or 'on call' as well."
"I wanted to tell you that I have compiled a list of 34 confirmed minors," Villafana wrote to Lefkowitz. "There are six others, whose name [sic] we already have, who need to be interviewed by the FBI to confirm whether they were 17 or 18 at the time of their activity with Mr. Epstein."
In a December 2007 letter, the prosecutor acknowledges some notifications of alleged victims but says they were sent after the U.S. Attorney's Office signed the plea deal and halted for most of the women at the request of Epstein's lawyers.
"Three victims were notified shortly after the signing of the Non-Prosecution Agreement of the general terms of that Agreement," Villafana wrote, again to Lefkowitz. "You raised objections to any victim notification, and no further notifications were done."
Original Deal Hidden
On Sept. 24, 2007, in a deal shrouded in secrecy that left alleged victims shocked at its leniency,
Epstein agreed to a 30-month sentence, including 18 months of jail time and 12 months of house arrest and the agreement to pay dozens of young girls under a federal statute providing for compensation to victims of child sexual abuse. .the U.S. Attorney's Office promised not to pursue any federal charges against Epstein or his Named and Un-Named co-conspirators.
Sources:
Fox By Malia Zimmerman, May 13, 2016
Daily Mail Reporter 19 March 2014
Gawker Nick Bryant 01/22/15
Western Journalism Kris Zane March 27, 2014
Politico By Josh Gerstein 07/07/15
New York Magazine, By Landon Thomas Jr.
- http://nymag.com/nymetro/news/people/n_7912/
- http://i.dailymail.co.uk/i/pix/2015/01/23/24FC867300000578-2922773-image-a-1_1422040373109.jpg
- http://i.kinja-img.com/gawker-media/image/upload/s--8lxTGpfN--/c_fit,fl_progressive,q_80,w_636/wvoyfgwzetlpbojxt8l1.jpg
- http://i1.wp.com/snn.bz/wp-content/uploads/2015/01/aQAZcTi.jpg.pagespeed.ce_.lYFVOh3c_hU9NXmv4_g8.jpg?resize=634%2C480
- http://i.dailymail.co.uk/i/pix/2015/01/22/2461078600000578-2921637-Dershowitz_said_any_legal_success_he_has_against_the_woman_named-a-3_1421933700669.jpg
http://dcxposed.com/wp-content/uploads/prince-andrew-epstein.jpg- https://www.miamiherald.com/news/local/article214210674.html
THE FIX IS IN
"In 2006 the FBI counted at least 40 underage girls who had been molested by Epstein. Authorities searched his Florida mansion and found two computers containing child *********** and homemade video and photographs from cameras hidden in bedroom walls which had been used to film sex acts. The case was airtight for many counts of sexual crimes but Palm Beach State Attorney Barry Krischer and the Justice Department stepped in and offered Epstein a plea deal. In 2008 Epstein pleaded guilty in a Florida court to one count of soliciting underage girls for sex. His punishment was 13 months of "8 hour nights only" at a halfway house. No other charges about raping underage girls nor running an underage sex trafficking ring were mentioned in the plea. His legal team? Gerald Lefcourt, Roy Black, Ken Starr, and Alan Dershowitz.
The federal non-prosecution agreement Epstein's legal team negotiated immunized all named and unnamed potential co-conspirators in Epstein's child trafficking network, which includes those who allegedly procured minors for Epstein and any powerbrokers who may have molested them."
The Talented Mr. Epstein
Lately, Jeffrey Epstein's high-flying style has been drawing oohs and aahs: the bachelor financier lives in New York's largest private residence, claims to take only billionaires as clients, and flies celebrities including Bill Clinton and Kevin Spacey on his Boeing 727. But pierce his air of mystery and the picture changes. Vicky Ward explores Epstein's investment career, his ties to retail magnate Leslie Wexner, and his complicated past.
June 27, 2011 12:00 am
http://www.vanityfair.com/news/2003/03/jeffrey-epstein-200303
Jeffrey Epstein: International Moneyman of Mystery
So how do termite grouping patterns fare as an investment strategy? Again, facts are hard to come by. A working day for Epstein starts at 5 a.m., when he gets up and scours the world markets on his Bloomberg screen -- each of his houses, in New York, St. Thomas, Palm Beach, and New Mexico, as well as the 727, is equipped with the necessary hardware for him to wake up, roll
|
|
|
Jul 13, 2019 | caucus99percent.com
** A footnote on Larry Summers seems important here: Harvard-trained economists have been running the US economy for a very long time, and continue to do so. Summers began his ascent as a professor of economics at Harvard University, leaving shortly before Bill Clinton won the Presidency. He was clearly the Neoliberal seed planted for the New American Century.
In 1993, Summers was appointed Undersecretary for International Affairs of the United States Department of the Treasury under the Clinton Administration. In 1995, he was promoted to Deputy Secretary of the Treasury under his long-time political mentor Robert Rubin. In 1999, he succeeded Rubin as Secretary of the Treasury.
While working for the Clinton administration Summers played a leading role in the American response to the 1994 economic crisis in Mexico, the 1997 Asian financial crisis, and the Russian financial crisis. He was also influential in the Harvard Institute for International Development and American-advised privatization of the economies of the post-Soviet states, and in the deregulation of the U.S financial system, including the repeal of the Glass-Steagall Act.
At This Point the Ball is Passed to the Bush Team Republicans, while the Democrats Sit Back and Wait for 2008.
There's now a Treasury surplus to transfer to the wealthy, and the necessary deregulation for Wall Street empowerment is in place. The Soviet era had ended and Russia is ended forever. The world is finally primed to be seized by the One Exceptional Power. It's 2001, and we are standing on the threshold of the New American Century . Time to throw a flash-bang of chaos onto the world stage and trigger the booming War Economy that will carry us directly to global control.
There's a rocky road ahead for Larry Summers. Summers introduces Epstein into the Harvard fold, but becomes reckless with his newly-refined Neoliberalism and his opinions concerning "lady scholars."
Following the end of Clinton's term, Summers served as the 27th President of Harvard University from 2001 to 2006. Summers resigned as Harvard's president in the wake of a no-confidence vote by Harvard faculty, which resulted in large part from Summers's conflict with Cornel West, financial conflict of interest questions regarding his relationship with Andrei Shleifer, and a 2005 speech in which he suggested that the under-representation of women in science and engineering could be due to a "different availability of aptitude at the high end", and less to patterns of discrimination and socialization. Remarking upon political correctness in institutions of higher education, Summers said in 2016:
There is a great deal of absurd political correctness. Now, I'm somebody who believes very strongly in diversity, who resists racism in all of its many incarnations, who thinks that there is a great deal that's unjust in American society that needs to be combated, but it seems to be that there is a kind of creeping totalitarianism in terms of what kind of ideas are acceptable and are debatable on college campuses.
After his departure from Harvard, Summers cooled his jets on Wall Street, positioning himself to be called back into the game when it was Team Democrat's turn in 2008.
Summers worked as a managing partner at the hedge fund D. E. Shaw & Co., and as a freelance speaker at other financial institutions, including Goldman Sachs, JPMorgan Chase, Citigroup, Merrill Lynch and Lehman Brothers. Summers rejoined public service during the Obama administration, serving as the Director of the White House United States National Economic Council for President Barack Obama from January 2009 until November 2010, where he emerged as a key economic decision-maker in the Obama administration's response to the Great Recession.
Jeffery Epstein continued to weave himself into the fabric of government like a good psychopath would. He was by no means the only one.
|
|
|
Jul 11, 2019 | www.unz.com
American Pravda: Secrets of Military Intelligence RON UNZ JUNE 10, 2019 12,500 WORDS 1,580 COMMENTS REPLY RSS
Some may remember that in 2005 a major media controversy engulfed Harvard President Larry Summers over his remarks at an academic conference. Casually speaking off-the-record at the private gathering, Summers had gingerly raised the hypothetical possibility that on average men might be a bit better at mathematics than women, perhaps partially explaining the far larger number of males holding faculty positions in the math, science, and engineering departments.
These controversial speculations were soon leaked to the press, and an enormous firestorm of protest erupted, with MIT professor Nancy Hopkins claiming that merely hearing Summers' words at the event had left her physically ill, forcing her to quickly exit the room lest she suffer a blackout and collapse .
Harvard students and faculty members soon launched an organized campaign to have Summers removed from the summit of our academic world, with noted evolutionary-psychologist Steven Pinker being one of the very few professors willing to publicly defend him. Eventually, an unprecedented "no confidence" vote by the entire faculty and growing loss of confidence by the Board of Trustees forced Summers to resign , becoming the first Harvard President to suffer that fate in the university's 350 year history, thus apparently demonstrating the astonishing power of feminist "political correctness" on college campuses.
The true story for those who followed it was actually quite a bit more complex. Summers, a former Clinton Administration Treasury Secretary, had a long record of very doubtful behavior, which had outraged many faculty members for entirely different reasons. As I wrote a few years ago:
Now I am hardly someone willing to defend Summers from a whole host of very serious and legitimate charges. He seems to have played a major role in transmuting Harvard from a renowned university to an aggressive hedge fund , policies that subsequently brought my beloved alma mater to the very brink of bankruptcy during the 2008 financial crisis. Under his presidency, Harvard paid out $26 million dollars to help settle international insider-trading charges against Andrei Shleifer, one of his closest personal friends, who avoided prison as a consequence. And after such stellar financial and ethical achievements, he was naturally appointed as one of President Obama's top economic advisors, a position from which he strongly supported the massive bailout of Wall Street and the rest of our elite financial services sector, while ignoring Main Street suffering. Perhaps coincidentally, wealthy hedge funds had paid him many millions of dollars for providing a few hours a week of part-time consulting advice during the twelve months prior to his appointment.
Moreover, Summers had previously denounced anti-Israel activism by Harvard students and faculty members as "anti-Semitic," an accusation that provoked fierce opposition . A few years later, it also came out that Summers may have played a crucial role in favoring Mark Zuckerberg over the Winkelvoss brothers in their early battle for ownership of Facebook, while Summers' former assistant Sheryl Sandberg later became Facebook president, making her a multi-billionaire.
Although Summers' impolitic remarks regarding female math ability had certainly sparked his ouster, the underlying cause was probably his many years of extremely unbecoming behavior. Indeed, I think a reasonable case can be made that Summers was the worst and most disreputable president in all of Harvard's long history.
Still, even a broken or crooked clock is right twice a day, and I doubt that Larry Summers is the only person in the world who suspects that men might be a bit better at math than women. But some strongly disagree with this assessment, and in the wake of the Summers controversy one of his fiercest academic opponents was a certain Janet Mertz, who specializes in cancer research at the University of Wisconsin.
In order to effectively refute Summers' odious speculations, she and her co-authors decided to carefully examine the total roster of participants in the International Math Olympiads for the years 1988-2007. These 3200-odd individuals represent the world's highest-performing math students drawn from the secondary schools of dozens of countries, and the gender distribution across so many different cultures and years would surely constitute powerful quantitative evidence of whether males and females significantly differed in their average aptitudes. Since most of these thousands of Math Olympians are drawn from non-Western countries, determining the genders of each and every one is hardly a trivial undertaking, and we should greatly commend the diligent research that Mertz and her colleagues undertook to accomplish this task.
They published their important results in a 10,000 word academic journal article, whose "first and foremost" conclusion, provided in bold-italics, was that "the myth that females cannot excel in mathematics must be put to rest." And in her subsequent press interviews , she proclaimed that her research had demonstrated that men and women had equal innate ability in mathematics, and that any current differences in performance were due to culture or bias, a result which our media gleefully promoted far and wide.
But strangely enough, when I actually bothered to read the text and tables of her eye-glazingly long and dull academic study, I noticed something quite intriguing, especially in the quantitative results conveniently summarized in Tables 6 and 7 (pp. 1252-53), and mentioned it in a column of my own:
The first of these shows the gender-distribution of the 3200-odd Math Olympians of the leading 34 countries for the years 1988-2007, and a few minutes with a spreadsheet reveals that the skew is 95% male and 5% female. Furthermore, almost every single country, whether in Europe, Asia, or elsewhere, seems to follow this same pattern, with the female share ranging between 0% and 12% but mostly close to 5%; Serbia/Montenegro is the only major outlier at 20% female. Similarly, Table 7 provides a gender distribution of results for just the United States, and we find that just 5 of our 126 Math Olympians -- or 4% -- have been female. Various other prestigious math competitions seem to follow a roughly similar gender skew.
These remarkable findings are even more easily grasped when we summarize the male percentages of top math students aggregated across 1988-2008 for each individual country:
ASIA:
China, 96% male
India, 97% male
Iran, 98% male
Israel, 98% male
Japan, 98% male
Kazakhstan, 99% male
South Korea, 93% male
Taiwan, 95% male
Turkey, 96% male
Vietnam, 97% male
EUROPE:
Belarus, 94% male
Bulgaria, 91% male
Czech Republic, 96% male
Slovakia, 88% male
France 97% male
Germany, 94% male
Hungary, 94% male
Poland, 99% male
Romania, 94% male
Russia/USSR, 88% male
Serbia and Montenegro, 80% male
Ukraine, 93% male
United Kingdom, 93% maleOTHER:
Australia, 94% male
Brazil, 96% male
Canada, 90% male
USA, 96% maleINTERNATIONAL AVERAGE , 94.4% male
These are the empirical results that Mertz and her co-authors touted as conclusively demonstrating that males and females have equal mathematical ability. As near as I can tell, no previous journalist or researcher had noticed the considerable difference between Mertz's empirical data and her stated conclusions, or perhaps any such individuals were just too intimidated to focus public attention on the discrepancy.
This striking disconnect between a study's purported findings and its actual results should alert us to similar possibilities elsewhere. Perhaps it is not so totally rare that diligent researchers whose ideological zeal sufficiently exceeds their mental ability may spend enormous time and effort gathering information but then interpreting it in a manner exactly contrary to its obvious meaning.
These thoughts recently came to my mind when I decided to read a remarkable analysis of the American military by Joseph W. Bendersky of Virginia Commonwealth University, a Jewish historian specializing in Holocaust Studies and the history of Nazi Germany. Last year, I had glanced at a few pages of his text for my long article on Holocaust Denial , but I now decided to carefully read the entire work, published in 2000.
Bendersky devoted ten full years of research to his book, exhaustively mining the archives of American Military Intelligence as well as the personal papers and correspondence of more than 100 senior military figures and intelligence officers. The "Jewish Threat" runs over 500 pages, including some 1350 footnotes, with the listed archival sources alone occupying seven full pages. His subtitle is "Anti-Semitic Politics of the U.S. Army" and he makes an extremely compelling case that during the first half of the twentieth century and even afterward, the top ranks of the U.S. military and especially Military Intelligence heavily subscribed to notions that today would be universally dismissed as "anti-Semitic conspiracy theories."
Put simply, U.S. military leaders in those decades widely believed that the world faced a direct threat from organized Jewry, which had seized control of Russia and similarly sought to subvert and gain mastery over America and the rest of Western civilization.
In these military circles, there was an overwhelming belief that powerful Jewish elements had financed and led Russia's Bolshevik Revolution, and were organizing similar Communist movements elsewhere aimed at destroying all existing Gentile elites and imposing Jewish supremacy throughout America and the rest of the Western world. While some of these Communist leaders were "idealists," many of the Jewish participants were cynical opportunists, seeking to use their gullible followers to destroy their ethnic rivals and thereby gain wealth and supreme power. Although intelligence officers gradually came to doubt that the Protocols of the Elders of Zion was an authentic document, most believed that the notorious work provided a reasonably accurate description of the strategic plans of the Jewish leadership for subverting America and the rest of the world and establishing Jewish rule.
Although Bendersky's claims are certainly extraordinary ones, he provides an enormous wealth of compelling evidence to support them, quoting or summarizing thousands of declassified Intelligence files, and further supporting his case by drawing from the personal correspondence of many of the officers involved. He conclusively demonstrates that during the very same years that Henry Ford was publishing his controversial series The International Jew , similar ideas, but with a much sharper edge, were ubiquitous within our own Intelligence community. Indeed, whereas Ford mostly focused upon Jewish dishonesty, malfeasance, and corruption, our Military Intelligence professionals viewed organized Jewry as a deadly threat to American society and Western civilization in general. Hence the title of Bendersky's book.
The International Jew The World's Foremost Problem HENRY FORD • 1920 • 323,000 WORDS
These widespread beliefs had important political consequences. In recent decades, our leading immigration restrictionists have regularly argued that anti-Semitism played absolutely no role in the 1924 Immigration Act drastically curtailing European immigration; and the debates and speeches found in the Congressional Record have tended to support their claims. However, last year, I speculated that the widespread awareness of the Jewish leadership of the Bolshevik Revolution may have been a large factor behind the legislation, but one that was kept away from the public record. Bendersky's research fully confirms my suspicions, and he reveals that one of the former military officers most fearful of Jewish immigrant subversion actually played a crucial role in orchestrating the legislation, whose central unstated goal was eliminating any further influx of Eastern European Jews.
The bulk of the fascinating material that Bendersky cites comes from intelligence reports and official letters contained in permanent military archives. Therefore, we must keep in mind that the officers producing such documents would surely have chosen their words carefully and avoided putting all their controversial thoughts down on paper, raising the possibility that their actual beliefs may have been far more extreme. A particular late 1930s case involving one top general provides insight into the likely opinions and private conversations of at least some of those individuals.
Although his name would mean nothing today, Deputy Chief of Staff George Van Horn Moseley spent most of the 1930s as one of America's most highly-regarded generals, having been considered for the top command of our armed forces and also serving as a personal mentor to Dwight D. Eisenhower, future Secretary of State George C. Marshall, and numerous other leading military figures. He seems to have been well-liked within our military establishment, and had an excellent personal reputation.
Moseley also had very strong opinions on the major public issues of the day, and after his retirement in 1938 freed him from military discipline, he began to aggressively promote these, going on a nationwide speaking tour. He repeatedly denounced Roosevelt's military buildup and in an early 1939 speech, he declared that "The war now being proposed is for the purpose of establishing Jewish hegemony throughout the world." He stated that only Jews would profit from the war, claimed that leading Wall Street Jews had financed the Russian Revolution, and warned Americans not to let history repeat itself. Although Moseley's outspokenness soon earned him a reprimand from the Roosevelt Administration, he also received private letters of support from other top generals and former president Herbert Hoover.
In his Congressional testimony just before the outbreak of World War II, Moseley became even more outspoken. He declared that the "murder squads" of Jewish Communists had killed "millions of Christians," but that "fortunately, the character of the German people was aroused" against these traitors within their midst and that therefore "We should not blame the Germans for settling the problem of the Jew within their borders for all time." He even urged our national leaders to "benefit" from the German example in addressing America's own festering domestic Jewish problem.
As might be expected, Moseley's 1939 praise of Germany's Jewish policy in front of Congress provoked a powerful media backlash, with a lead story in The New Republic denouncing him as a Nazi "fifth columnist" and The Nation attacking him in similar fashion; and after war broke out, most public figures gradually distanced themselves. But both Eisenhower and Marshall continued to privately regard him with great admiration and remained in friendly correspondence for many years, strongly suggesting that his harsh appraisal of Jews had hardly been a deep secret within his personal circle.
Bendersky claims that Moseley's fifty boxes of memoirs, private papers, and correspondence "embody every kind of anti-Semitic argument ever manifested in the history of Western civilization," and based on the various extreme examples he provides, few would dispute that verdict. But he also notes that Moseley's statements differed little from the depictions of Jews expressed by General George S. Patton immediately after World War II, and even from some retired generals well into the 1970s.
Although I would not question the accuracy of Bendersky's exhaustive archival research, he seems considerably less sure-footed regarding American intellectual history and sometimes allows his personal sentiments to lead him into severe error. For example, his first chapter devotes a couple of pages to E.A. Ross, citing some of his unflattering descriptions of Jews and Jewish behavior, and suggesting he was a fanatic anti-Semite, who dreaded "the coming catastrophe of an America overrun by racially inferior people."
But Ross was actually one of our greatest early sociologists, and his 26 page discussion of Jewish immigrants published in 1913 was scrupulously fair-minded and even-handed, describing both positive and negative characteristics, following similar chapters on Irish, German, Scandinavian, Italian, and Slavic newcomers. And although Bendersky routinely denounces his own ideological villains as "Social Darwinists," the source he actually cites regarding Ross correctly identified the scholar as one of America's leading critics of Social Darwinism. Indeed, Ross's stature in left-wing circles was so great that he was selected as a member of the Dewey Commission, organized to independently adjudicate the angry conflicting accusations of Stalinists and Trotskyites. And in 1936, a Jewish leftist fulsomely praised Ross's long and distinguished scholarly career in the pages of The New Masses , the weekly periodical of the American Communist Party, only regretting that Ross had never been willing to embrace Marxism.
The Old World in the New The Eastern European Hebrews E.A. ROSS • 1914 • 5,000 WORDSSimilarly, Bendersky is completely out of his depth in discussing scientific issues, especially those involving anthropology and human behavior. He ridicules the "scientific racism" that he noted was widely found among the military officers he studied, claiming that such theories had already been conclusively debunked by Franz Boas and his fellow cultural anthropologists. But modern science has firmly established that the notions he so cavalierly dismisses were substantially if not entirely correct while those of Boas and his disciples were largely fallacious, and the Boasian conquest of the academic world actually imposed a half-century Dark Age upon the anthropological sciences, much like Lysenko had done in Soviet biology. Indeed, the views of Boas, an immigrant Jew, may have been primarily motivated by ideological considerations, and his most famous early work seemed to involve outright fraud: he claimed to have proven that the shape of human heads was determined by diet, and rapidly changed among immigrant groups in America.
But far more serious than Bendersky's lapses in areas outside of his professional expertise are the massive, glaring omissions found at the very heart of his thesis. His hundreds of pages of text certainly demonstrate that for decades our top military professionals were extremely concerned about the subversive activities of Jewish Communists, but he seems to casually dismiss those fears as nonsensical, almost delusional. Yet the actual facts are quite different. As I briefly noted last year after my cursory examination of his book:
The book runs well over 500 pages, but when I consulted the index I found no mention of the Rosenbergs nor Harry Dexter White nor any of the other very numerous Jewish spies revealed by the Venona Decrypts, and the term "Venona" itself is also missing from the index. Reports of the overwhelmingly Jewish leadership of the Russian Bolsheviks are mostly treated as bigotry and paranoia, as are descriptions of the similar ethnic skew of America's own Communist Party, let alone the heavy financial support of the Bolsheviks by Jewish international bankers. At one point, he dismisses the link between Jews and Communism in Germany by noting that "less than half" of the Communist Party leadership was Jewish; but since fewer than one in a hundred Germans came from that ethnic background, Jews were obviously over-represented among Communist leaders by as much as 5,000%. This seems to typify the sort of dishonesty and innumeracy I have regularly encountered among Jewish Holocaust experts.
Admittedly, Bendersky's book was published just 18 months after the seminal first Venona volume of John Earl Haynes and Harvey Klehr appeared in early 1999. But the Venona Decrypts themselves had been declassified in 1995 and soon begun circulating within the academic community. For Bendersky to stubbornly ignore the undeniable reality that a large and overwhelmingly Jewish network of Stalinist agents was situated near the top of the Roosevelt Administration, while ridiculing the military officers who made such claims at the time, raises severe doubts about his credibility as an objective historian.
As I pointed out earlier this year:
From 1941 to 1944 FDR's Vice President was Henry Wallace, who would have succeeded to the presidency if Roosevelt had renominated him in that latter year or had died prior to early 1945. And although Wallace himself was not disloyal, his top advisors were mostly Communist agents. Indeed, he later stated that a Wallace Administration would have included Laurence Duggan as Secretary of State and Harry Dexter White as Secretary of the Treasury, thereby installing Stalinist henchmen at the top of the Cabinet, presumably supported by numerous lower-level officials of a similar political ilk. One might jokingly speculate whether the Rosenbergs -- later executed for treason -- would have been placed in charge of our nuclear weapons development program.
That America's national government of the early 1940s actually came within a hair's breadth -- or rather a heart-beat -- of falling under Communist control is a very uncomfortable truth. And our history books and popular media have maintained such total silence about this remarkable episode that even among today's well-educated Americans I suspect that fewer than five in one hundred are aware of this grim reality.
The Venona Project constituted the definitive proof of the massive extent of Soviet espionage activities in America, which for many decades had been routinely denied by many mainstream journalists and historians, and it also played a crucial secret role in dismantling that hostile spy network during the late 1940s and 1950s. But Venona was nearly snuffed out just a year after its birth. In 1944 Soviet agents became aware of the crucial code-breaking effort, and soon afterwards arranged for the Roosevelt White House to issue a directive ordering the project shut down and all efforts to uncover Soviet spying abandoned. The only reason that Venona survived, allowing us to later reconstruct the fateful politics of that era, was that the determined Military Intelligence officer in charge of the project risked a court-martial by directly disobeying the explicit Presidential order and continuing his work.
That officer was Col. Carter W. Clarke, but his place in Bendersky's book is a much less favorable one, being described as a prominent member of the anti-Semitic "clique" who constitute the villains of the narrative. Indeed, Bendersky particularly condemns Clarke for still seeming to believe in the essential reality of the Protocols as late as the 1970s, quoting from a letter he wrote to a brother officer in 1977:
If, and a big -- damned big IF, as the Jews claim the Protocols of the Elders of Zion were f -- - cooked up by Russian Secret Police, why is it that so much they contain has already come to pass, and the rest so strongly advocated by the Washington Post and the New York Times .
Our historians must surely have a difficult time digesting the remarkable fact that the officer in charge of the vital Venona Project, whose selfless determination saved it from destruction by the Roosevelt Administration, actually remained a lifelong believer in the importance of the Protocols of the Elders of Zion .
Let us take a step back and place Bendersky's findings in their proper context. We must recognize that during much of the era covered by his research, U.S. Military Intelligence constituted nearly the entirety of America's national security apparatus -- being the equivalent of a combined CIA, NSA, and FBI -- and was responsible for both international and domestic security, although the latter portfolio had gradually been assumed by J. Edgar Hoover's own expanding organization by the end of the 1920s.
Bendersky's years of diligent research demonstrate that for decades these experienced professionals -- and many of their top commanding generals -- were firmly convinced that major elements of the organized Jewish community were ruthlessly plotting to seize power in America, destroy all our traditional Constitutional liberties, and ultimately gain mastery over the entire world.
I have never believed in the existence of UFOs as alien spacecraft, always dismissing such notions as ridiculous nonsense. But suppose declassified government documents revealed that for decades nearly all of our top Air Force officers had been absolutely convinced of the reality of UFOs. Could I continue my insouciant refusal to even consider such possibilities? At the very least, those revelations would force me to sharply reassess the likely credibility of other individuals who had made similar claims during that same period.
As I wrote in 2018:
Some years ago, I came across a totally obscure 1951 book entitled The Iron Curtain Over America by John Beaty, a well-regarded university professor. Beaty had spent his wartime years in Military Intelligence, being tasked with preparing the daily briefing reports distributed to all top American officials summarizing available intelligence information acquired during the previous 24 hours, which was obviously a position of considerable responsibility.
As a zealous anti-Communist, he regarded much of America's Jewish population as deeply implicated in subversive activity, therefore constituting a serious threat to traditional American freedoms. In particular, the growing Jewish stranglehold over publishing and the media was making it increasingly difficult for discordant views to reach the American people, with this regime of censorship constituting the "Iron Curtain" described in his title. He blamed Jewish interests for the totally unnecessary war with Hitler's Germany, which had long sought good relations with America, but instead had suffered total destruction for its strong opposition to Europe's Jewish-backed Communist menace.
Beaty also sharply denounced American support for the new state of Israel, which was potentially costing us the goodwill of so many millions of Muslims and Arabs. And as a very minor aside, he also criticized the Israelis for continuing to claim that Hitler had killed six million Jews, a highly implausible accusation that had no apparent basis in reality and seemed to be just a fraud concocted by Jews and Communists, aimed at poisoning our relations with postwar Germany and extracting money for the Jewish State from the long-suffering German people.
He was scathing toward the Nuremberg Trials, which he described as a "major indelible blot" upon America and "a travesty of justice." According to him, the proceedings were dominated by vengeful German Jews, many of whom engaged in falsification of testimony or even had criminal backgrounds. As a result, this "foul fiasco" merely taught Germans that "our government had no sense of justice." Sen. Robert Taft, the Republican leader of the immediate postwar era took a very similar position, which later won him the praise of John F. Kennedy in Profiles in Courage . The fact that the chief Soviet prosecutor at Nuremberg had played the same role during the notorious Stalinist show trials of the late 1930s, during which numerous Old Bolsheviks confessed to all sorts of absurd and ridiculous things, hardly enhanced the credibility of the proceedings to many outside observers.
Then as now, a book taking such controversial positions stood little chance of finding a mainstream New York publisher, but it was soon released by a small Dallas firm, and then became enormously successful, going through some seventeen printings over the next few years. According to Scott McConnell, founding editor of The American Conservative , Beaty's book became the second most popular conservative text of the 1950s, ranking only behind Russell Kirk's iconic classic, The Conservative Mind .
Bendersky devotes several pages to a discussion of Beaty's book, which he claims "ranks among the most vicious anti-Semitic diatribes of the postwar era." He also describes the story of its tremendous national success, which followed an unusual trajectory.
Books by unknown authors that are released by tiny publishers rarely sell many copies, but the work came to the attention of George E. Stratemeyer, a retired general who had been one of Douglas MacArthur's commanders, and he wrote Beaty a letter of endorsement. Beaty began including that letter in his promotional materials, drawing the ire of the ADL, whose national chairman contacted Stratemeyer, demanding that he repudiate the book, which was described as a "primer for lunatic fringe groups" all across America. Instead, Stratemeyer delivered a blistering reply to the ADL, denouncing it for making "veiled threats" against "free expression and thoughts" and trying to establish Soviet-style repression in the United States. He declared that every "loyal citizen" should read The Iron Curtain Over America , whose pages finally revealed the truth about our national predicament, and he began actively promoting the book around the country while attacking the Jewish attempt to silence him. Numerous other top American generals and admirals soon joined Statemeyer in publicly endorsing the work, as did a couple of influential members of the U.S. Senate, leading to its enormous national sales.
Having now discovered that Beaty's views were so totally consistent with those of nearly all our Military Intelligence professionals, I decided to reread his short book, and found myself deeply impressed. His erudition and level-headedness were exactly what one would expect from an accomplished academic with a Columbia Ph.D. who had risen to the rank of colonel during his five years of service in Military Intelligence and on the General Staff. Although strongly anti-Communist, by all indications Beaty was very much a moderate conservative, quite judicious in his claims and proposals. Bendersky's hysterical denunciation reflects rather badly upon the issuer of that fatwa .
Beaty's book was written nearly 70 years ago, at the very beginning of our long Cold War, and is hardly free from various widely-held errors of that time, nor from deep concerns about various calamities that did not come to pass, such as a Third World War. Moreover, since it was published just a couple of years after Mao's victory in China and in the midst of our own involvement in the Korean War, its discussion of those large contemporary events is far more lengthy and detailed than would probably be of interest to present-day readers. But leaving aside those minor blemishes, I think the account he provides of the true circumstances behind America's involvement in both the First and Second World Wars and their immediate aftermath is greatly superior to the heavily slanted and expurgated versions we find in our standard history books. And Beaty's daily wartime responsibility for collating and summarizing all incoming intelligence information and then producing a digest for distribution to the White House and our other top officials surely provided him a far more accurate picture of the reality than that of the typical third-hand scribe.
At the very least, we should acknowledge that Beaty's volume provides an excellent summary of the beliefs of American Military Intelligence officers and many of our top generals during the first half of the twentieth century. With copyright having long lapsed, I'm pleased to make it available in convenient HTML format, allowing those so interested to read it and judge for themselves:
The Iron Curtain Over America JOHN BEATY • 1951 • 82,000 WORDSDespite Bendersky's fulminations, Beaty seems to have been someone of quite moderate sentiments, who viewed extremism of any type with great disfavor. After describing the ongoing seizure of power in American society by Jewish immigrants, mostly aligned with international Zionism or international Communism, his suggested responses were strikingly inoffensive. He urged American citizens to demonstrate their disapproval by writing letters to their newspapers and elected officials, signing petitions, and providing their political support to the patriotic elements of both the Democratic and Republican parties. He also argued that the most dangerous aspect of the current situation was the enfolding "Iron Curtain" of Jewish censorship that was preventing ordinary Americans from recognizing the great looming threat to their freedoms, and claimed that combating such media censorship was a task of the highest importance.
Others of similar background and views sometimes moved in far more extreme directions. About a dozen years ago I began noticing scattered references on fringe websites to a certain Revilo P. Oliver, an oddly-named political activist of the mid-twentieth century, apparently of enormous stature in Far Right circles. According to these accounts, after important World War II service at the War Department, he began a long and distinguished career as a Classics professor at the University of Illinois. Then, beginning in the mid-1950s, he became active in politics, establishing himself as a leading figure in the early days of both National Review and the John Birch Society, though he eventually broke with both those organizations when he came to regard them as too politically-compromised and ineffective. Thereafter, he gradually became more angry and extreme in his views, and by 1974 had become friendly with William Pierce of the National Alliance, suggesting the theme for his novel The Turner Diaries which sold hundreds of thousands of copies as a huge underground bestseller and according to federal prosecutors later served as the inspiration for the 1995 Oklahoma City bombings.
Although I had never heard of Oliver nor his unusual career, most of the facts I could verify seemed correct. The early years of National Review had carried more than 100 of his articles and reviews and a major feature in The Saturday Evening Post discussed his rancorous break with The John Birch Society. A few years later, I became sufficiently curious that I ordered his 1981 book America's Decline: The Education of a Conservative , containing his personal memoir and many of his writings. So few were available, that by chance the one I received was the author's own personal copy, with his address label glued to the cover and including a few pages of his personal correspondence and errata notes sent to his publisher. These days, the numerous copies available for sale on Amazon start at an outrageous price of almost $150, but fortunately the book is also freely available for reading or downloading at Archive.org .
When I first read Oliver's book seven or eight years ago, it constituted one of my earliest exposures to the literature of the Far Right, and I was not at all sure what to make of it. His enormous classical erudition was quite apparent, but his political rhetoric seemed totally outrageous, with the word "conspiracy" used with wild abandon, seemingly on almost every other page. Given his bitter political feuds with so many other right-wingers and the total lack of any mainstream endorsements, I viewed his claims with a great deal of skepticism, though a number of them stuck in my mind. However, after having very recently absorbed the remarkable material presented by Bendersky and reread Beaty, I decided to revisit Oliver's volume, and see what I thought of it the second time round.
Revilo P. Oliver, 1963. Credit: Wikimedia Commons
Bendersky makes no mention of Oliver, which is unfortunate since all the spurious accusations he had leveled against Ross and Beaty would have been entirely correct if made against Oliver. Unlike most right-wingers, then or now, Oliver was a militant atheist, holding scathing views towards Christianity, and he instead placed racial conflict at the absolute center of his world-view, making him exactly the sort of outspoken Social Darwinist not uncommon in the early years of the twentieth century, but long since driven into hiding. A good indication of the explicit harshness of Oliver's sentiments appears on the very first page of his preface, when he ridicules the total ineffectiveness of conservatives in combating "the existing situation, which has resulted from the invasion of their country by hordes of aliens who are, by a biological necessity, their racial enemies." This sort of statement would have been unimaginable in Beaty, who emphasized Christian charity and goodwill.
More than half of the fairly long text consists of pieces that appeared during 1955-1966 in National Review , American Opinion (the Birch magazine), and Modern Age , generally book reviews. Most of the topics are hardly of great current interest, and discuss the internal conflicts of Ancient Rome, or perhaps provide Oliver's views on Spengler, Toynbee, John Dewey, or Haitian history; but the material certainly establishes the impressive intellectual breadth of the author. According to the book's introduction, Oliver was conversant in eleven languages, including Sanskrit, and I can well credit that claim.
As mentioned, Oliver particularly despised Christianity and Christian preachers, and he devoted a substantial portion of the remainder of the book to ridiculing them and their doctrines, often deploying his great scholarship laced with crude invective, and generally writing in an arch, rather droll style. Although not of much interest to me, I'd think that those who share Oliver's religious disinclinations might find his remarks rather amusing.
However, the remaining one-third or so of the volume is focused on factual and political matters, much of the material being quite significant. According to the back cover, Oliver had spent World War II as director of a secret research group at the War Department, leading a staff that eventually grew to 175, and afterward being cited for his outstanding government service. His statements certainly present himself as extremely knowledgeable about the "hidden history" of that war, and he minced absolutely no words about his views. The combination of his strong academic background, his personal vantage point, and his extreme outspokenness would make him a uniquely valuable source on all those matters.
But that value is tempered by his credibility, cast into serious doubt by his often wild rhetoric. Whereas I would consider Beaty's book quite reliable, at least relative to the best information available at the time, and might place Henry Ford's The International Jew in much the same category, I would tend to be far more cautious in accepting Oliver's claims, especially given the strong emotions he expressed. Aside from his many reprinted articles, the rest of the book was written when he was in his seventies, and he repeatedly expressed his political despair concerning his many years of total failure in various right-wing projects. He declared that he had lost any hope of ever restoring the Aryan-controlled America of 1939, and instead foresaw our country's inevitable decline, alongside that of the rest of Western civilization. Moreover, many of the events he recounts had occurred three or four decades earlier, and even under the best of circumstances his recollections might have become a little garbled.
That being said, in rereading Oliver I was struck by how much of his description of America's involvement in the two world wars seemed so entirely consistent with Beaty's account, or that of numerous other highly-regarded journalists and historians of that era, such as the contributors to Perpetual War for Perpetual Peace . I had encountered this material some years after reading Oliver's book, and it greatly buttressed his credibility.
But unlike those other writers, Oliver often framed the same basic facts in extremely dramatic fashion. For example, he denounced Churchill's 1940 aerial bombing strategy as the most monstrous sort of war crime:
Great Britain, in violation of all the ethics of civilized warfare that had theretofore been respected by our race, and in treacherous violation of solemnly assumed diplomatic covenants about "open cities", had secretly carried out intensive bombing of such open cities in Germany for the express purpose of killing enough unarmed and defenceless men and women to force the German government reluctantly to retaliate and bomb British cities and thus kill enough helpless British men, women, and children to generate among Englishmen enthusiasm for the insane war to which their government had committed them.
It is impossible to imagine a governmental act more vile and more depraved than contriving death and suffering for its own people -- for the very citizens whom it was exhorting to "loyalty" -- and I suspect that an act of such infamous and savage treason would have nauseated even Genghis Khan or Hulagu or Tamerlane, Oriental barbarians universally reprobated for their insane blood-lust. History, so far as I recall, does not record that they ever butchered their own women and children to facilitate lying propaganda .In 1944 members of British Military Intelligence took it for granted that after the war Marshal Sir Arthur Harris would be hanged or shot for high treason against the British people
At the time I originally read those words, my knowledge of World War II was mostly limited to half-remembered portions of my old History 101 textbooks, and I was naturally quite skeptical at Oliver's astonishing charges. But during subsequent years, I discovered that the circumstances were exactly as Oliver claimed, with so notable a historian as David Irving having fully documented the evidence. So although we may question Oliver's exceptionally harsh characterization or his heated rhetoric, the factual case he makes seems not to be under serious dispute.
His discussion of America's own entrance in the war is equally strident. He emphasizes that his colleagues in the War Department had completely broken the most secure Japanese codes, giving our government complete knowledge of all Japanese plans:
Perhaps the most exhilarating message ever read by American Military Intelligence was one sent by the Japanese government to their Ambassador in Berlin (as I recall), urging him not to hesitate to communicate certain information by telegrams and assuring him that "no human mind" could decipher messages that had been enciphered on the Purple Machine. That assurance justified the merriment it provoked
However, just as many others have alleged, Oliver claims that Roosevelt then deliberately allowed the attack on Pearl Harbor to proceed and failed to warn the local military commanders, whom he then ordered court-martialed for their negligence:
Everyone now knows, of course, that the message to the Japanese Ambassador in Washington, warning him that Japan was about to attack the United States, was read by Military Intelligence not long after the Ambassador himself received it, and that the frantic cover-up, involving some successful lying about details, was intended, not to preserve that secret, but to protect the traitors in Washington who made certain that the Japanese attack, which they had labored so long to provoke, would be successful and produce the maximum loss of American lives and destruction of American ships.
Numerous historians seem to have thoroughly established that Roosevelt did everything he could to provoke a war with Japan. But Oliver adds a fascinating detail that I have never seen mentioned elsewhere:
In January 1941, almost eleven months before Pearl Harbor, preparation for it began in Washington when Franklin D Roosevelt summoned the Portuguese Ambassador to the United States and, enjoining him to the utmost secrecy, asked him to inform Premier Salazar that Portugal need have no concern for the safety of Timor and her other possessions in Southeast Asia; the United States, he said, had decided to crush Japan forever by waiting until her military forces and lines of communication were stretched to the utmost and then suddenly launching an all-out war with massive attacks that Japan was not, and could not be, prepared to resist. As expected, the Portuguese Ambassador communicated the glad tidings to the head of his government, using his most secure method of communication, an enciphered code which the Portuguese doubtless imagined to be "unbreakable," but which Roosevelt well knew had been compromised by the Japanese, who were currently reading all messages sent in it by wireless. The statement, ostensibly entrusted in "strict secrecy" to the Portuguese Ambassador, was, of course, intended for the Japanese government, and, as a matter of fact, it became certain that the trick had succeeded when the contents of the Portuguese Ambassador's message to Salazar promptly appeared in a Japanese message enciphered by the Purple Machine. Roosevelt had only to wait for Japan to act on the "secret" information about American plans thus given her, and to order naval movements and diplomatic negotiations that would appear to the Japanese to confirm American intentions.
The fact that I have just mentioned is really the ultimate secret of Pearl Harbor, and seems to have been unknown to Admiral Theobald when he wrote his well-known book on the subject.
Oliver notes that Roosevelt had long sought to have America participate in the great European war whose outbreak he had previously orchestrated , but had been blocked by overwhelming domestic anti-war sentiment. His decision to provoke a Japanese attack as a "back door" to war only came after all his military provocations against Germany had failed to accomplish a similar result:
His first plan was defeated by the prudence of the German government. While he yammered about the evils of aggression to the white Americans whom he despised and hated, Roosevelt used the United States Navy to commit innumerable acts of stealthy and treacherous aggression against Germany in a secret and undeclared war, hidden from the American people, hoping that such massive piracy would eventually so exasperate the Germans that they would declare war on the United States, whose men and resources could then be squandered to punish the Germans for trying to have a country of their own. These foul acts of the War Criminal were known, of course, to the officers and men of the Navy that carried out the orders of their Commander-in-Chief, and were commonly discussed in informed circles, but, so far as I know, were first and much belatedly chronicled by Patrick Abbazia in Mr. Roosevelt's Navy: the Private War of the U.S. Atlantic Fleet, 1939-1942 , published by the Naval Institute Press in Annapolis in 1975.
Although the U.S. Navy's acts of outrageous piracy on the high seas were successfully concealed from the majority of the American people before Pearl Harbor, they were, of course, well known to the Japanese, and partly account for Roosevelt's success in deceiving them with his "confidences" to the Portuguese Ambassador they assumed that when Roosevelt was ready to attack them, his power over the American press and communications would enable him to simulate an attack they had not in fact made. That the deception was successful was, of course, shown in December 1941, when they made a desperate effort to avert the treacherous blow they feared.
Once America thus entered the war, Oliver then focuses on the horrific way the Allies waged it, using aerial bombardment to deliberately slaughter the civilian population of Germany:
Both British and Americans have always claimed to be humane and have loudly condemned unnecessary bloodshed, mass massacres, and sadistic delight in the infliction of pain in 1945 their professions could still be credited without doubt, and that meant they would be stricken with remorse for a ferocious act of unmitigated savagery unparalleled in the history of our race and unsurpassed in the record of any race. The bombing of the unfortified city of Dresden, nicely timed to insure an agonizing death to the maximum number of white women and children, has been accurately described by David Irving in The Destruction of Dresden (London, 1963), but the essentials of that sickening atrocity were known soon after it was perpetrated. To be sure, it is true that such an act might have been ordered by Hulagu, the celebrated Mongol who found pleasure in ordering the extermination of the population of all cities that did not open their gates to him -- and of some that did -- so that the severed heads of the inhabitants could be piled up into pyramids as perishable but impressive monuments to his glory. The Americans and British, however, deem themselves more civilized than Hulagu and less sadistic.
He also harshly condemns the very brutal nature of the American occupation of Germany that followed the end of the war:
with the American invasion of German territory began the innumerable atrocities against her civilian population -- the atrocities against prisoners began even earlier -- that have brought on our people the reputation of Attila's hordes. The outrages were innumerable and no one, so far as I know, has even tried to compile a list of typical incidents of rape and torture and mayhem and murder. Most of the unspeakable atrocities, it is true, were committed by savages and Jews in American uniforms, but many, it must be confessed, were perpetrated by Americans, louts from the dregs of our own society or normal men crazed with hatred. All victorious armies, it is true, contain elements that want to outrage the vanquished, and few commanders in "democratic" wars can maintain the tight discipline that made Wellington's armies the marvels of Europe or the discipline that generally characterized the German armies in both World Wars; what so brands us with shame is that the atrocities were encouraged by our supreme commander in Europe, whose orders, presumably issued when he was not drunk or occupied with his doxies, made it difficult or hazardous for responsible American generals to observe what had been the rules of civilized warfare. Almost every American soldier in Germany had witnessed the barbarous treatment of the vanquished, the citizens of one of the greatest nations of Western civilization and our own kinsmen, and -- despite the efforts to incite them to inhuman hate with Jewish propaganda -- many of our soldiers witnessed such outrages with pity and shame. The cumulative effect of their reports when they returned to their own country should have been great. It is needless to multiply examples, some of which may be found in F.J.P. Veale's Advance to Barbarism (London, 1953).
And he suggests that the Nuremberg Tribunals brought everlasting shame upon his own country:
I was, of course, profoundly shocked by the foul murders at Nuremberg that brought on the American people an indelible shame. Savages and Oriental barbarians normally kill, with or without torture, the enemies whom they have overcome, but even they do not sink so low in the scale of humanity as to perform the obscene farce of holding quasi-judicial trials before they kill, and had the Americans -- for, given their absolute power, the responsibility must fall on them, and their guilt cannot be shifted to their supposed allies -- had the Americans, I say, merely slaughtered the German generals, they could claim to be morally no worse than Apaches, Balubas, and other primitives. Civilized peoples spare the lives of the vanquished, showing to their leaders a respectful consideration, and the deepest instincts of our race demand a chivalrous courtesy to brave opponents whom the fortunes of war have put in our power.
To punish warriors who, against overwhelming odds, fought for their country with a courage and determination that excited the wonder of the world, and deliberately to kill them because they were not cowards and traitors, because they did not betray their nation -- that was an act of vileness of which we long believed our race incapable. And to augment the infamy of our act, we stigmatized them as "War Criminals" which they most certainly were not, for if that phrase has meaning, it applies to traitors who knowingly involve their nations in a war contrived to inflict loss, suffering, and death on their own people, who are thus made to fight for their own effective defeat -- traitors such as Churchill, Roosevelt, and their white accomplices. And to add an ultimate obscenity to the sadistic crime, "trials" were held to convict the vanquished according to "laws" invented for the purpose, and on the basis of perjured testimony extorted from prisoners of war by torture
The moral responsibility for those fiendish crimes, therefore, falls on our own War Criminals, and, as a practical matter, nations always bear the responsibility for the acts of the individuals whom they, however mistakenly, placed in power. We cannot reasonably blame Dzhugashvili, alias Stalin: he was not a War Criminal, for he acted, logically and ruthlessly, to augment the power and the territory of the Soviet Empire, and he (whatever his personal motives may have been) was the architect of the regime that transformed a degraded and barbarous rabble into what is now the greatest military power on earth.
Oliver's memoirs were published by a tiny London press in a cheap paper binding, lacked even an index, and were hardly likely to ever reach a substantial audience. That, together with the internal evidence of his text, leads me to believe that he was quite sincere in his statements, at least with regard to all these sorts of historical and political matters. And given those beliefs, we should hardly be surprised at the heated rhetoric he directs against the targets of his wrath, especially Roosevelt, whom he repeatedly references as "the great War Criminal."
Sincerity is obviously no guarantee of accuracy. But Bendersky's extensive review of private letters and personal memoirs reveals that a large portion of our Military Intelligence officers and top generals seemed to closely share Oliver's appraisal of Roosevelt, whose eventual death provoked widespread "exultation" and "fierce delight" in their social circle. Finally, one of them wrote, "The evil man was dead!"
Moreover, although Oliver's words are as heated as those of Beaty are measured, the factual claims of the two authors are quite similar with regard to World War II, so that all the high-ranking generals who enthusiastically endorsed Beaty's bestselling 1951 book may be regarded as providing some implicit backing for Oliver.
Consider also the personal diaries and reported conversations of Gen. George S. Patton, one of our most renowned field commanders. These reveal that shortly after the end of fighting he became outraged over how he had been totally deceived regarding the circumstances of the conflict, and he planned to return to the U.S., resign his military commission, and begin a national speaking-tour to provide the American people with the true facts about the war. Instead, he died in a highly-suspicious car accident the day before his scheduled departure, and there is very considerable evidence that he was actually assassinated by the American OSS.
Oliver's discussion of the Second World War provides remarkably vivid rhetorical flourishes and some intriguing details, but his basic analysis is not so different from that of Beaty or numerous other writers. Moreover, Beaty had a far superior vantage point during the conflict, while his book was published just a few years after the end of fighting and was also far more widely endorsed and distributed. So although Oliver's extreme candor may add much color to our historical picture, I think his memoirs are probably more useful for their other elements, such as his unique insights into the origins of both National Review and the John Birch Society, two of the leading right-wing organizations established during the 1950s.
Oliver opens his book by describing his departure from DC and wartime government service in the fall of 1945, fully confident that the horrific national treachery he had witnessed at the top of the American government would soon inspire "a reaction of national indignation that would become sheer fury." As he puts it:
That reaction, I thought, would occur automatically, and my only concern was for the welfare of a few friends who had innocently and ignorantly agitated for war before the unspeakable monster in the White House successfully tricked the Japanese into destroying the American fleet at Pearl Harbor. I wondered whether a plea of ignorance would save them from the reprisals I foresaw!
He spent the next decade entirely engaged in his Classical scholarship and establishing an academic career, while noting some of the hopeful early signs of the political uprising that he fully expected to see:
In 1949 Congressman Rankin introduced a bill that would recognize as subversive and outlaw the "Anti-"Defamation League of B'nai B'rith, the formidable organization of Jewish cowboys who ride herd on their American cattle In both the Houses of Representatives and the Senate committees were beginning investigations of covert treason and alien subversion Then Senator McCarthy undertook a somewhat more thorough investigation, which seemed to open a visible leak in the vast dike of deceit erected by our enemies, and it was easy to assume that the little jet of water that spurted through that leak would grow hydraulically until the dam broke and released an irresistible flood.
However, by 1954 he recognized that McCarthy's political destruction was at hand, and the opposing forces he so despised had gained the upper hand. He faced the crucial decision of whether to involve himself in politics, and if so, what form that might take.
One of his friends, a right-wing Yale professor named Wilmoore Kendall, argued that a crucial factor in the Jewish domination of American public life was their control over influential opinion journals such as The Nation and The New Republic , and that launching a competing publication might be the most effective remedy. For this purpose, he had recruited a prize student of his named William F. Buckley, Jr., who could draw upon the financial resources of his wealthy father, long known in certain circles for his discreet sponsorship of various anti-Jewish publications and "his drastic private opinion about the aliens' perversion of our national life."
A few years earlier, H.L. Mencken's famous literary monthly The American Mercury had fallen on hard times and been purchased by one of America's wealthiest men, Russell Maguire, who hoped to use it partly as a vehicle for his extremely strong anti-Jewish sentiments. Indeed, one of Maguire's senior staffers for a couple of years was George Lincoln Rockwell, best known for later founding the American Nazi Party. But according to Oliver, enormous concerted pressure by Jewish interests upon both newstands and printers had caused great difficulties for that magazine, which were to eventually force Maguire to abandon the effort and sell the magazine.
Kendall and Oliver hoped that Buckley's new effort might succeed where Maguire's was failing, perhaps by avoiding any direct mention of Jewish issues and instead focusing upon threats from Communists, socialists, and liberals, who were far less risky targets to attack. Buckley had previously gained some journalistic experience by working at the Mercury for a couple of years, so he was probably well aware of the challenging political environment he might face.
Although L. Brent Bozell, another one of his young Yale proteges, would also be working with Buckley on the new venture, Kendall told Oliver that he had failed to locate a single university professor willing to risk his name as a contributor. This prompted Oliver to take up the challenge with such determination that more of his pieces appeared in National Review during the 1950s than almost any other writer, even ahead of Kendall himself. Apparently Oliver had already been friendly with Buckley, having been a member of the latter's 1950 wedding party .
But from Oliver's perspective, the project proved a dismal failure. Against all advice, Buckley founded his magazine as a profit-making enterprise, circulating a prospectus, selling stock and debentures, and promising his financial backers an excellent financial return. Instead, like every other political magazine, it always lost money and was soon forced to plead for donations, greatly irritating his initial investors.
Another concern was that just before launch, a couple of Jewish former Communists then running an existing conservative magazine caught wind of the new publication and offered to betray their employer and bring over all their existing subscribers if they were given senior roles. Although they were duly brought on board, their planned coup at The Freeman failed, and no promised bounty of subscribers appeared. In later hindsight, Oliver became deeply suspicious of these developments and how the publication had been so quickly diverted from its intended mission, writing:
it was only long after Professor Kendall had been shouldered out of the organization and I had severed my connections with it that I perceived that whenever a potentially influential journal is founded, it receives the assistance of talented "conservative" Jews, who are charged with the duty of supervising the Aryan children and making certain that they play only approved games.
Oliver also emphasized the severe dilemma faced by the magazine and all other organizations intended to combat the influence of Jews and Communists. For obvious reasons, these almost invariably centered themselves around strong support for Christianity. But Oliver was a militant atheist who detested religious faith and therefore believed that such an approach inevitably alienated "the very large number of educated men who were repelled by the hypocrisy, obscurantism, and rabid ambitions of the clergy." Thus, Christian anti-Communist movements often tended to produce a large backlash of sympathy for Communism in elite circles.
Small ideological publications are notorious for their bitter intrigues and angry disputes, and I have made no effort to compare Oliver's brief sketch of the creation of National Review with other accounts, which would surely provide very different perspectives. But I think his basic facts ring true to me.
By 1958 Oliver had established himself as one of National Review 's leading contributors, and he was contacted by a wealthy Massachusetts businessman named Robert Welch, who had been an early investor in the magazine but was greatly disappointed by its political ineffectiveness, so the two men corresponded and gradually became quite friendly. Welch said he was concerned that the publication focused largely on frivolity and pseudo-literary endeavors, while it increasingly minimized or ignored the conspiratorial role of the Jewish aliens who had gained such a degree of control over the country. The two men eventually met, and according to Oliver seemed to be entirely in agreement about America's plight, which they discussed in complete candor.
Late that same year, Welch described his plans for regaining control of the country by the creation of a semi-secret national organization of patriotic individuals, primarily drawn from the upper middle classes and prosperous businessmen, which eventually became known as the John Birch Society. With its structure and strategy inspired by the Communist Party, it was to be tightly organized into individual local cells, whose members would then establish a network of front organizations for particular political projects, all seemingly unconnected but actually under their dominant influence. Secret directives would be passed along to each local chapter by the word of mouth via coordinators dispatched from Welch's central headquarters, a system also modeled after the strict hierarchical discipline of Communist movements.
Welch privately unveiled his proposal to a small group of prospective co-founders, all of whom with the exception of Oliver were wealthy businessmen. He candidly admitted his own atheism and explained that Christianity would have no role in the project, which cost him a couple of potential supporters; but about a dozen committed themselves, notably including Fred Koch, founding father of Koch Industries. Minimal emphasis was to be placed upon Jewish matters, partly to avoid drawing media fire and partly in hopes that a growing schism between Zionist and non-Zionist Jews might weaken their powerful adversary, or if the former gained the upper hand, perhaps help ensure the removal of all Jews to the Middle East.
As the project moved forward, a monthly magazine called American Opinion was launched and Oliver took responsibility for a large portion of each issue. Given his academic and political prominence, he also became one of the leading speakers for the organization in public venues and also an influential visitor to many of its local chapters.
Although Oliver remained a top figure in the organization until 1966, in later years he concluded that Welch's serious mistakes had doomed the project to failure within just a couple of years after its establishment. Very early on, a Jewish journalist had obtained a copy of some of Welch's secret, controversial writings and their public disclosure had panicked one of the most prominent Birch leaders, soon producing a major media scandal. Welch repeatedly vacillated between defending and denying his secret manuscript, forcing his associates to take contradictory positions, and making the entire leadership seem both dishonest and ridiculous, a pattern that was to be repeated in future years.
According to Oliver, nearly eighty thousand men and women enlisted in the organization during the first decade, but he feared that their energetic efforts and commitment were entirely wasted, producing nothing of any value. As the years went by, the organization's ineffectiveness became more apparent, while Welch's autocratic control blocked any necessary changes from within since his executive council functioned merely as a powerless fig-leaf. Although Oliver remained convinced that Welch had been sincere when he began the effort, the accumulation of so many unnecessary missteps eventually led him to suspect deliberate sabotage. He claimed that his careful investigation revealed that the organization's financial problems had forced Welch to turn in desperation to outside Jewish donors, who then became his secret overlords, leading Oliver to rancorously break with the organization in 1966 and denounce it as a fraud. Although I have no easy means of verifying most of Oliver's claims, his story hardly seems implausible.
Oliver also makes an important point about the severe dilemma produced by Welch's strategy. One of the central goals of the organization had been to combat organized Jewish influence in America, but any mention of Jews was forbidden, so the officially designed term for their subversive foes was the "International Communist Conspiracy." Oliver admitted that the usage of that ubiquitous phrase became "forced" and "monotonous," and indeed it or its variants appear with remarkable regularity in his articles reprinted from the Birch magazine.
According to Oliver, the intent was to allow members to draw their own logical conclusions about who was really behind the "conspiracy" they opposed while allowing the organization itself to maintain plausible deniability. But the result was total failure, with Jewish organizations fully understanding the game being played, while intelligent individuals quickly concluded that the Birch organization was either dishonest or delusional, hardly an unreasonable inference. As an example of this situation, the late investigative journalist Michael Collins Piper in 2005 told the story of how at the age of sixteen he had embraced a 'One-Minute' Membership in the John Birch Society . Indeed, by the late 1960s, any public expressions of anti-Semitism by Birch members became grounds for immediate expulsion, a rather ironic situation for an organization originally founded just a decade earlier with avowedly anti-Semitic goals.
Following his 1966 rupture with Welch, Oliver greatly reduced his political writing, which henceforth only appeared in much smaller and more extreme venues than the Birch magazine. His book contains just a couple of such later pieces, but the second of these, published in a right-wing British magazine during 1980, is of some interest.
Just as we might expect, Oliver had always been particularly scathing towards the supposed Jewish Holocaust, and near the very beginning of his book, he states his own views in typically forceful fashion:
The Hoax of the Twentieth Century The Case Against the Presumed Extermination of European Jewry ARTHUR R. BUTZ • 1976/2015 • 225,000 WORDSThe Americans were howling with indignation over the supposed extermination by the Germans of some millions of Jews, many of whom had taken the opportunity to crawl into the United States, and one could have supposed in 1945 that when the hoax, devised to pep up the cattle that were being stampeded into Europe, was exposed, even Americans would feel some indignation at having been so completely bamboozled.
The prompt exposure of the bloody swindle seemed inevitable, particularly since the agents of the O.S.S., commonly known in military circles as the Office of Soviet Stooges, who had been dispatched to conquered Germany to set up gas chambers to lend some verisimilitude to the hoax, had been so lazy and feckless that they merely sent back pictures of shower baths, which were so absurd that they had to be suppressed to avoid ridicule. No one could have believed in 1945 that the lie would be used to extort thirty billion dollars from the helpless Germans and would be rammed into the minds of German children by uncouth American "educators" -- or that civilized men would have to wait until 1950 for Paul Rassinier, who had been himself a prisoner in a German concentration camp, to challenge the infamous lie, or until 1976 for Professor Arthur Butz's detailed and exhaustive refutation of the venomous imposture on Aryan credulity.
In his republished article, Oliver discussed this same topic at far greater length and in the context of its broader theoretical implications. After recounting various examples of historical frauds and cover-ups, starting with the possibly forged letter of the younger Pliny, he expressed his amazement at the continuing widespread acceptance of the Holocaust story, despite the existence of hundreds of thousands of direct eyewitnesses to the contrary. He suggested that such an astonishing scholarly situation must force us to reassess our assumptions about the nature of evidentiary methods in historiography.
Oliver's peremptory dismissal of the standard Holocaust narrative led me to take a closer look at the treatment of the same topic in Bendersky's book, and I noticed something quite odd. As discussed above, his exhaustive research in official files and personal archives conclusively established that during World War II a very considerable fraction of all our Military Intelligence officers and top generals were vehemently hostile to Jewish organizations and also held beliefs that today would be regarded as utterly delusional. The author's academic specialty is Holocaust studies, so it is hardly surprising that his longest chapter focused on that particular subject, bearing the title "Officers and the Holocaust, 1940-1945." But a close examination of the contents raises some troubling questions.
Across more than sixty pages, Bendersky provides hundreds of direct quotes, mostly from the same officers who are the subject of the rest of his book. But after carefully reading the chapter twice, I was unable to find a single one of those statements referring to the massive slaughter of Jews that constitutes what we commonly call the Holocaust, nor to any of its central elements, such as the existence of death camps or gas chambers.
The forty page chapter that follows focuses on the plight of the Jewish "survivors" in post-war Europe, and the same utter silence applies. Bendersky is disgusted by the cruel sentiments expressed by these American military men towards the Jewish former camp inmates, and he frequently quotes them characterizing the latter as thieves, liars, and criminals; but the officers seem strangely unaware that those unfortunate souls had only just barely escaped an organized mass extermination campaign that had so recently claimed the lives of the vast majority of their fellows. Numerous statements and quotes regarding Jewish extermination are provided, but all of these come from various Jewish activists and organizations, while there is nothing but silence from all of the military officers themselves.
Bendersky's ten years of archival research brought to light personal letters and memoirs of military officers written decades after the end of the war, and in both those chapters he freely quotes from these invaluable materials, sometimes including private remarks from the late 1970s, long after the Holocaust had become a major topic in American public life. Yet not a single statement of sadness, regret, or horror is provided. Thus, a prominent Holocaust historian spends a decade researching a book about the private views of our military officers towards Jews and Jewish topics, but the one hundred pages he devotes to the Holocaust and its immediate aftermath contains not a single directly-relevant quote from those individuals, which is simply astonishing. A yawning chasm seems to exist at the center of his lengthy historical volume, or put another way, a particular barking dog is quite deafening in its silence.
I am not an archival researcher and have no interest in reviewing the many tens of thousands of pages of source material located at dozens of repositories across the country that Bendersky so diligently examined while producing his important book. Perhaps during their entire wartime activity and also the decades of their later lives, not a single one of the hundred-odd important military officers who were the focus of his investigation ever once broached the subject of the Holocaust or the slaughter of Jews during World War II. But I think there is another distinct possibly.
As mentioned earlier, Beaty spent his war years carefully reviewing the sum-total of all incoming intelligence information each day and then producing an official digest for distribution to the White House and our other top leaders. And in his 1951 book, published just a few years after the end of fighting, he dismissed the supposed Holocaust as a ridiculous wartime concoction by dishonest Jewish and Communist propagandists that had no basis in reality. Soon afterward, Beaty's book was fully endorsed and promoted by many of our leading World War II generals, including those who were subjects of Bendersky's archival research. And although the ADL and various other Jewish organizations fiercely denounced Beaty, there is no sign that they ever challenged his absolutely explicit "Holocaust denial."
I suspect that Bendersky gradually discovered that such "Holocaust denial" was remarkably common in the private papers of many of his Military Intelligence officers and top generals, which presented him with a serious dilemma. If only one or two of those individuals had expressed such sentiments, their shocking statements could be cited as further evidence of their delusional anti-Semitism. But what if a substantial majority of those officers -- who certainly had possessed the best knowledge of the reality of World War II -- held private beliefs that were very similar to those publicly expressed by their former colleagues Beaty and Oliver? In such a situation, Bendersky may have decided that certain closed doors should remain in that state, and entirely skirted the topic.
At the age of 89, Richard Lynn surely ranks as the "grand old man" of IQ research, and in 2002 he and his co-author Tatu Vanhanen published their seminal work IQ and the Wealth of Nations . Their volume strongly argued that mental ability as measured by standardized tests was overwhelmingly determined by hereditary, genetic factors, and for nearly two decades their research findings have constituted a central pillar of the IQ movement that they have long inspired. But as I argued in a major article several years ago, the massive quantity of evidence they presented actually demonstrates the exact opposite conclusion:
We are now faced with a mystery arguably greater than that of IQ itself. Given the powerful ammunition that Lynn and Vanhanen have provided to those opposing their own "Strong IQ Hypothesis," we must wonder why this has never attracted the attention of either of the warring camps in the endless, bitter IQ dispute, despite their alleged familiarity with the work of these two prominent scholars. In effect, I would suggest that the heralded 300-page work by Lynn and Vanhanen constituted a game-ending own-goal against their IQ-determinist side, but that neither of the competing ideological teams ever noticed.
For ideologically-blinkered scholars to sometimes produce research that constitutes "a game-ending own-goal" may be much more common than most of us would expect. Janet Mertz and her zealously feminist co-authors expended enormous time and effort to conclusively establish that across nearly all nations of the world, regardless of culture, region, language, the group of highest-performing math students has almost always been roughly 95% male and just 5% female, a result that would seem to deeply undercut their hypothesis that men and women have equal mathematical ability.
Similarly, ten years of exhaustive archival research by Joseph Bendersky produced a volume that seems to utterly demolish our conventional narrative of Jewish political activism in both Europe and America between the two world wars. Moreover, when carefully considered I think his text constitutes a dagger aimed with deadly accuracy straight at the heart of our conventional Holocaust narrative, his own lifelong area of study and a central pillar of the West's current ideological framework.
Over the last year or two, pressure from the ADL and other Jewish activist organizations has induced Amazon to ban all books that challenge the Holocaust or other beliefs deeply held by organized Jewry. Most of these purged works are quite obscure, and many are of indifferent quality. In general, their public impact has been severely diminished by the real or perceived ideological associations of their authors.
Meanwhile, for nearly twenty years a book of absolutely devastating historical importance has sat on the Amazon shelves, freely available for sale and bearing glowing cover-blurbs by mainstream, reputable scholars, but by its Amazon sales-rank, selling almost no copies, a massive, unexploded shell whom nearly no one seems to have properly recognized. I suggest that interested readers purchase their copies of Bendersky's outstanding opus before steps are taken to permanently flush it down the memory hole.
Related Reading:
American Pravda: The Bolshevik Revolution and Its Aftermath American Pravda: Was General Patton Assassinated? American Pravda: Our Great Purge of the 1940s American Pravda: Our Deadly World of Post-War Politics American Pravda: Holocaust Denial
anonymous [469] Disclaimer , says: June 10, 2019 at 5:37 am GMT
FB , says: Website June 10, 2019 at 5:37 am GMTOne wonders how it serves them that they allow unz.com to continue. Giant Honey Pot? Social safety valve? In any case, I look forward to more as Weimerica continues it's trajectory. Thank you Ron.
Blake , says: June 10, 2019 at 6:43 am GMTA very insightful article only not in the way Mr Unz intended
Ostensibly an article about the Bendersky book, which treats the longstanding issue of anti-Semitism in the US military the article actually devotes 90 percent of its 12,000 words to an obscure crackpot a creature of the long past days of open race hate one Revilo P Oliver
Now I understand the 'intellectual' nourishment that the troglodytes writing and commenting on this site have been nourished on I'm sure there are many more Olivers and his ilk in the dark past of the United States which is actually still ongoing but only among the truly developmentally challenged that flock to this site fortunately for all good and decent people a mere numerical irrelevance of harmless outliers
As for Mr Unz's conclusion that the Bendersky book is somehow devoid of its center the Holocaust well it's because 'none' of the anti Semites in the US military mentioned in the book, actually talk about the Holocaust gee go figure anti-Semites not talking about gas chambers ?
Mr Unz's conclusion about the 'fatal flaw' of Bendersky rests on that one single sentence none of these Jew haters mentioned the slaughter of Jews ergo it didn't happen LOL
And of course one might ask Mr Unz if these people mentioned in the Bendersky book are representative of the entire cadre of military men familiar with the genocide or if not, what percentage this important question remains a mystery so the reader has zero clue as to whether these downplayers of the Holocaust constitute near unanimity or a tiny minority ?
Hmm
Blake , says: June 10, 2019 at 6:49 am GMTFantastic resources as always. Much appreciated
@FBj2 , says: June 10, 2019 at 7:10 am GMTHonestly get a life.
Bruno , says: June 10, 2019 at 7:23 am GMTNice article. But I comment your article of the IQ. There you state about twin studies:
"These individual results, usually based on relatively small statistical samples of adopted twins or siblings, seemingly demonstrate the extreme rigidity of IQ -- the "Strong IQ Hypothesis" -- while we have also seen the numerous examples above of large populations whose IQs have drastically shifted over relatively short periods of time. How can these contradictory findings be squared? I do not have the solution, but it would seem a very worthwhile subject for further research, on both theoretical and practical grounds."
[MORE]
j2 , says: June 10, 2019 at 7:31 am GMTBtw, i was even more I nterested by the example than buy the main point, the olympiad in math is the best example of IQ power but it seems to be hard to grasp (selecting with math predicts math scores. So what ?).
Field medal is harder to get than Nobel prize in physics or Bank of Sweden prize in economy : you have 10 000 PhD every year and a bit less than 1 fields medal (4, sometimes 3 or 2 every 4 year)
The test is very low on math knowledge (high school level) but very high on complexity. It's not noble math. It's only about being astute and quick. That's why many good mathematician despize it like they despize scholastic MCQ.
But it's prediction of research stellar power is incredible.
Consider this : Field Medals are given in a 1:2:3:6 model so that there is 40/50 gold medalists for around 500/600 participants (1 in 12). 5 to 6 participants are selected by each country.
There are 6 problems scored 7 points each. Bronze score starts at 16/42 wich is the median score. Silver is 19. Golden is 24. USA math University tenured professor average 15.
[MORE]
@anonymousVojkan , says: June 10, 2019 at 7:52 am GMT"One wonders how it serves them that they allow unz.com to continue."
"in hopes that a growing schism between Zionist and non-Zionist Jews might weaken their powerful adversary, or if the former gained the upper hand, perhaps help ensure the removal of all Jews to the Middle East."
The reason for fomenting anti-Semitism (e.g. with the Protocols) in the end of the 19th century up to 1948 was to get people to Israel. A bit later the reason for fomenting anti-Semitism in Iraq was to have Iraqi Jews to move to Israel to get more people there.
Bruno , says: June 10, 2019 at 7:53 am GMTMrs Mertz visibly doesn't excel at math herself. "Men being on average better at math" doesn't logically imply that "females cannot excel at mathematics".
But then, ideology and science just don't go and never will go together. If reality contradicts the theory, ideologues adapt reality to suit the theory, while scientists adapt the theory to suit reality. Somehow, the ideologues' approach always has either failed miserably, in the better cases, or created catastrophes, in the worse cases.
The problem with scientific research today is that it has to be ideology and / or plutocracy compatible to attract funds, so little room is left for true science.LondonBob , says: June 10, 2019 at 7:57 am GMTSo International math Olympiad competition test is the best and clearest available example I know – Genome wide association stat maybe a thing in the future – that measurable individual ability differences is a real world fact.
Franz , says: June 10, 2019 at 8:09 am GMTWhen I was doing a course at MIT the teaching assistant had been at Harvard with the twins and Zuckerberg. Despite being a very nerdy guy he said the Winklevoss twins were great people and Zuckerberg was a weasel.
swamped , says: June 10, 2019 at 8:43 am GMTRevilo P. Oliver is mostly known for his suicide (he and his wife) and his hectoring and totally unreadable prose, with his anti-Christian book so badly executed it's been seen as an advertisement for the faith.
Oliver's error was thinking WWII is over. An error shared by many. Wm F. Buckley, Jr, started American Conservative, Inc, as a witches coven of anti-Midwest isolationism which Buckley pretty well acknowledged in the first few issues. Buckley was inducted into Skull & Bones (AKA brotherhood of death) in 1950, at midcentury, which is a Red Flag. As WFB was an ostentatious Roman Catholic, it was forbidden in that era for a Catholic to join any secret society much less a masonic subdivision at Yale. This ban was not lifted by the Church till the mid-1980s. Buckley either lied about his faith or is real masters, your bet is as good as any. Either way he lied to somebody for a whole generation.
The real conspiracy isn't the Birch, or Revilo Oliver, or even commies or the Jewish whatever. It's the ball-less American Right and the misfits and tossers who guide it, use it, rise to the top of it and all the while accomplish nothing whatsoever.
And it's a string of total failure stretching now back nearly a century. Time to call bullshit on the right and note the commies were right from the start: It was and is phony, and not an especially edifying one at that.
"This striking disconnect between a study's purported findings and its actual results should alert us to similar possibilities elsewhere" but not in the same article. There is much food for thought here but it would probably have been easier to digest if it were split into two separate essays: one on the follies of feminism(s) & the other on the Jewish-Bolshevik nudge (shove!) of America into WW2 & beyond. There's too great a "disconnect" between the two; although, they're both enticing subjects in their own right. (ha! three different there-eir-y're's & two too's in one sentence).
But just so as not to disconnect from the oblique opening of this regaling romp , back to the slimy Summers, who "Moreover had previously denounced anti-Israel activism by Harvard students and faculty members as 'anti-semitic'": i.e."Profoundly anti-Israel views are increasingly finding support in progressive intellectual communities. Serious and thoughtful people are advocating and taking actions that are anti-semitic in their effect if not their intent."(Lawrence Summers, 17 September 2002)
And just a couple of months ago on Twitter, Summers again:
"The US Department of State's definition of anti-Semitism explicitly identifies singling out Israel policy for criticism in a way different from other countries and drawing comparisons between it and the Nazis as anti-Semitic.
https://www.state.gov/s/rga/resources/267538.htm#.XKYyGfZfyyE.twitter (from @StateDept)
Lawrence H. Summers
Verified account
@LHSummers
By this standard, BDS and Israel Apartheid week @Harvard are anti-Semitic in both effect and intent.
9:36 AM – 4 Apr 2019"
The guy's a lost cause!
|
|
|
Jul 05, 2019 | www.unz.com
"The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers."
I'm Bonnie Faulkner. Today on Guns and Butter: Dr. Michael Hudson. Today's show: The IMF and World Bank: Partners In Backwardness . Dr. Hudson is a financial economist and historian. He is President of the Institute for the Study of Long-Term Economic Trend, a Wall Street Financial Analyst, and Distinguished Research Professor of Economics at the University of Missouri, Kansas City.
His most recent books include " and Forgive them Their Debts: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year "; Killing the Host: How Financial Parasites and Debt Destroy the Global Economy , and J Is for Junk Economics: A Guide to Reality in an Age of Deception . He is also author of Trade, Development and Foreign Debt , among many other books.
We return today to a discussion of Dr. Hudson's seminal 1972 book, Super Imperialism: The Economic Strategy of American Empire , a critique of how the United States exploited foreign economies through the IMF and World Bank, with a special emphasis on food imperialism.
... ... ...
Bonnie Faulkner : In your seminal work form 1972, Super-Imperialism: The Economic Strategy of American Empire , you write: "The development lending of the World Bank has been dysfunctional from the outset." When was the World Bank set up and by whom?
Michael Hudson : It was set up basically by the United States in 1944, along with its sister institution, the International Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent on the United States. To make sure that no other country or group of countries – even all the rest of the world – could not dictate U.S. policy. American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this veto power was to make sure that any policy was, in Donald Trump's words, to put America first. "We've got to win and they've got to lose."
The World Bank was set up from the outset as a branch of the military, of the Defense Department. John J. McCloy (Assistant Secretary of War, 1941-45), was the first full-time president. He later became Chairman of Chase Manhattan Bank (1953-60). McNamara was Secretary of Defense (1961-68), Paul Wolfowitz was Deputy and Under Secretary of Defense (1989-2005), and Robert Zoellick was Deputy Secretary of State. So I think you can look at the World Bank as the soft shoe of American diplomacy.
Bonnie Faulkner : What is the difference between the World Bank and the International Monetary Fund, the IMF? Is there a difference?
Michael Hudson : Yes, there is. The World Bank was supposed to make loans for what they call international development. "Development" was their euphemism for dependency on U.S. exports and finance. This dependency entailed agricultural backwardness – opposing land reform, family farming to produce domestic food crops, and also monetary backwardness in basing their monetary system on the dollar.
The World Bank was supposed to provide infrastructure loans that other countries would go into debt to pay American engineering firms, to build up their export sectors and their plantation sectors by public investment roads and port development for imports and exports. Essentially, the Bank financed long- investments in the foreign trade sector, in a way that was a natural continuation of European colonialism.
In 1941, for example, C. L. R. James wrote an article on "Imperialism in Africa" pointing out the fiasco of European railroad investment in Africa: "Railways must serve flourishing industrial areas, or densely populated agricult5ural regions, or they must open up new land along which a thriving population develops and provides the railways with traffic. Except in the mining regions of South Africa, all these conditions are absent. Yet railways were needed, for the benefit of European investors and heavy industry." That is why, James explained "only governments can afford to operate them," while being burdened with heavy interest obligations. [1] What was "developed" was Africa's mining and plantation export sector, not its domestic economies. The World Bank followed this pattern of "development" lending without apology.
The IMF was in charge of short-term foreign currency loans. Its aim was to prevent countries from imposing capital controls to protect their balance of payments. Many countries had a dual exchange rate: one for trade in goods and services, the other rate for capital movements. The function of the IMF and World Bank was essentially to make other countries borrow in dollars, not in their own currencies, and to make sure that if they could not pay their dollar-denominated debts, they had to impose austerity on the domestic economy – while subsidizing their import and export sectors and protecting foreign investors, creditors and client oligarchies from loss.
The IMF developed a junk-economics model pretending that any country can pay any amount of debt to the creditors if it just impoverishes its labor enough. So when countries were unable to pay their debt service, the IMF tells them to raise their interest rates to bring on a depression – austerity – and break up the labor unions. That is euphemized as "rationalizing labor markets." The rationalizing is essentially to disable labor unions and the public sector. The aim – and effect – is to prevent countries from essentially following the line of development that had made the United States rich – by public subsidy and protection of domestic agriculture, public subsidy and protection of industry and an active government sector promoting a New Deal democracy. The IMF was essentially promoting and forcing other countries to balance their trade deficits by letting American and other investors buy control of their commanding heights, mainly their infrastructure monopolies, and to subsidize their capital flight.
BONNIE FAULKNER : Now, Michael, when you began speaking about the IMF and monetary controls, you mentioned that there were two exchange rates of currency in countries. What were you referring to?
MICHAEL HUDSON : When I went to work on Wall Street in the '60s, I was balance-of-payments economist for Chase Manhattan, and we used the IMF's monthly International Financial Statistics every month. At the top of each country's statistics would be the exchange-rate figures. Many countries had two rates: one for goods and services, which was set normally by the market, and then a different exchange rate that was managed for capital movements. That was because countries were trying to prevent capital flight. They didn't want their wealthy classes or foreign investors to make a run on their own currency – an ever-present threat in Latin America.
The IMF and the World Bank backed the cosmopolitan classes, the wealthy. Instead of letting countries control their capital outflows and prevent capital flight, the IMF's job is to protect the richest One Percent and foreign investors from balance-of-payments problems.
The World Bank and American diplomacy have steered them into a chronic currency crisis. The IMF enables its wealthy constituency to move their money out of the country without taking a foreign-exchange loss. It makes loans to support capital flight out of domestic currencies into the dollar or other hard currencies. The IMF calls this a "stabilization" program. It is never effective in helping the debtor economy pay foreign debts out of growth. Instead, the IMF uses currency depreciation and sell-offs of public infrastructure and other assets to foreign investors after the flight capital has left and currency collapses. Wall Street speculators have sold the local currency short to make a killing, George-Soros style.
When the debtor-country currency collapses, the debts that these Latin American countries owe are in dollars, and now have to pay much more in their own currency to carry and pay off these debts. We're talking about enormous penalty rates in domestic currency for these countries to pay foreign-currency debts – basically taking on to finance a non-development policy and to subsidize capital flight when that policy "fails" to achieve its pretended objective of growth.
All hyperinflations of Latin America – Chile early on, like Germany after World War I – come from trying to pay foreign debts beyond the ability to be paid. Local currency is thrown onto the foreign-exchange market for dollars, lowering the exchange rate. That increases import prices, raising a price umbrella for domestic products.
A really functional and progressive international monetary fund that would try to help countries develop would say: "Okay, banks and we (the IMF) have made bad loans that the country can't pay. And the World Bank has given it bad advice, distorting its domestic development to serve foreign customers rather than its own growth. So we're going to write down the loans to the ability to be paid." That's what happened in 1931, when the world finally stopped German reparations payments and Inter-Ally debts to the United States stemming from World War I.
Instead, the IMF says just the opposite: It acts to prevent any move by other countries to bring the debt volume within the ability to be paid. It uses debt leverage as a way to control the monetary lifeline of financially defeated debtor countries. So if they do something that U.S. diplomats don't approve of, it can pull the plug financially, encouraging a run on their currency if they act independently of the United States instead of falling in line. This control by the U.S. financial system and its diplomacy has been built into the world system by the IMF and the World Bank claiming to be international instead of an expression of specifically U.S. New Cold War nationalism.
BONNIE FAULKNER : How do exchange rates contribute to capital flight?
MICHAEL HUDSON : It's not the exchange rate that contributes. Suppose that you're a millionaire, and you see that your country is unable to balance its trade under existing production patterns. The money that the government has under control is pesos, escudos, cruzeiros or some other currency, not dollars or euros. You see that your currency is going to go down relative to the dollar, so you want to get our money out of the country to preserve your purchasing power.
This has long been institutionalized. By 1990, for instance, Latin American countries had defaulted so much in the wake of the Mexico defaults in 1982 that I was hired by Scudder Stevens, to help start a Third World Bond Fund (called a "sovereign high-yield fund"). At the time, Argentina and Brazil were running such serious balance-of-payments deficits that they were having to pay 45 percent per year interest, in dollars, on their dollar debt. Mexico, was paying 22.5 percent on its tesobonos .
Scudders' salesmen went around to the United States and tried to sell shares in the proposed fund, but no Americans would buy it, despite the enormous yields. They sent their salesmen to Europe and got a similar reaction. They had lost their shirts on Third World bonds and couldn't see how these countries could pay.
Merrill Lynch was the fund's underwriter. Its office in Brazil and in Argentina proved much more successful in selling investments in Scudder's these offshore fund established in the Dutch West Indies. It was an offshore fund, so Americans were not able to buy it. But Brazilian and Argentinian rich families close to the central bank and the president became the major buyers. We realized that they were buying these funds because they knew that their government was indeed going to pay their stipulated interest charges. In effect, the bonds were owed ultimately to themselves. So these Yankee dollar bonds were being bought by Brazilians and other Latin Americans as a vehicle to move their money out of their soft local currency (which was going down), to buy bonds denominated in hard dollars.
BONNIE FAULKNER : If wealthy families from these countries bought these bonds denominated in dollars, knowing that they were going to be paid off, who was going to pay them off? The country that was going broke?
MICHAEL HUDSON : Well, countries don't pay; the taxpayers pay, and in the end, labor pays. The IMF certainly doesn't want to make its wealthy client oligarchies pay. It wants to squeeze ore economic surplus out of the labor force. So countries are told that the way they can afford to pay their enormously growing dollar-denominated debt is to lower wages even more.
Currency depreciation is an effective way to do this, because what is devalued is basically labor's wages. Other elements of exports have a common world price: energy, raw materials, capital goods, and credit under the dollar-centered international monetary system that the IMF seeks to maintain as a financial strait jacket.
According to the IMF's ideological models, there's no limit to how far you can lower wages by enough to make labor competitive in producing exports. The IMF and World Bank thus use junk economics to pretend that the way to pay debts owed to the wealthiest creditors and investors is to lower wages and impose regressive excise taxes, to impose special taxes on necessities that labor needs, from food to energy and basic services supplied by public infrastructure.
BONNIE FAULKNER: So you're saying that labor ultimately has to pay off these junk bonds?
MICHAEL HUDSON: That is the basic aim of IMF. I discuss its fallacies in my Trade Development and Foreign Debt , which is the academic sister volume to Super Imperialism . These two books show that the World Bank and IMF were viciously anti-labor from the very outset, working with domestic elites whose fortunes are tied to and loyal to the United States.
BONNIE FAULKNER : With regard to these junk bonds, who was it or what entity
MICHAEL HUDSON : They weren't junk bonds. They were called that because they were high-interest bonds, but they weren't really junk because they actually were paid. Everybody thought they were junk because no American would have paid 45 percent interest. Any country that really was self-reliant and was promoting its own economic interest would have said, "You banks and the IMF have made bad loans, and you've made them under false pretenses – a trade theory that imposes austerity instead of leading to prosperity. We're not going to pay." They would have seized the capital flight of their comprador elites and said that these dollar bonds were a rip-off by the corrupt ruling class.
The same thing happened in Greece a few years ago, when almost all of Greece's foreign debt was owed to Greek millionaires holding their money in Switzerland. The details were published in the "Legarde List." But the IMF said, in effect that its loyalty was to the Greek millionaires who ha their money in Switzerland. The IMF could have seized this money to pay off the bondholders. Instead, it made the Greek economy pay. It found that it was worth wrecking the Greek economy, forcing emigration and wiping out Greek industry so that French and German bondholding banks would not have to take a loss. That is what makes the IMF so vicious an institution.
BONNIE FAULKNER : So these loans to foreign countries that were regarded as junk bonds really weren't junk, because they were going to be paid. What group was it that jacked up these interest rates to 45 percent?
MICHAEL HUDSON : The market did. American banks, stock brokers and other investors looked at the balance of payments of these countries and could not see any reasonable way that they could pay their debts, so they were not going to buy their bonds. No country subject to democratic politics would have paid debts under these conditions. But the IMF, U.S. and Eurozone diplomacy overrode democratic choice.
Investors didn't believe that the IMF and the World Bank had such a strangle hold over Latin American, Asian, and African countries that they could make the countries act in the interest of the United States and the cosmopolitan finance capital, instead of in their own national interest. They didn't believe that countries would commit financial suicide just to pay their wealthy One Percent.
They were wrong, of course. Countries were quite willing to commit economic suicide if their governments were dictatorships propped up by the United States. That's why the CIA has assassination teams and actively supports these countries to prevent any party coming to power that would act in their national interest instead of in the interest of a world division of labor and production along the lines that the U.S. planners want for the world. Under the banner of what they call a free market, you have the World Bank and the IMF engage in central planning of a distinctly anti-labor policy. Instead of calling them Third World bonds or junk bonds, you should call them anti-labor bonds, because they have become a lever to impose austerity throughout the world.
BONNIE FAULKNER : Well, that makes a lot of sense, Michael, and answers a lot of the questions I've put together to ask you. What about Puerto Rico writing down debt? I thought such debts couldn't be written down.
MICHAEL HUDSON : That's what they all said, but the bonds were trading at about 45 cents on the dollar, the risk of their not being paid. The Wall Street Journal on June 17, reported that unsecured suppliers and creditors of Puerto Rico, would only get nine cents on the dollar. The secured bond holders would get maybe 65 cents on the dollar.
The terms are being written down because it's obvious that Puerto Rico can't pay, and that trying to do so is driving the population to move out of Puerto Rico to the United States. If you don't want Puerto Ricans to act the same way Greeks did and leave Greece when their industry and economy was shut down, then you're going to have to provide stability or else you're going to have half of Puerto Rico living in Florida.
BONNIE FAULKNER : Who wrote down the Puerto Rican debt?
MICHAEL HUDSON : A committee was appointed, and it calculated how much Puerto Rico can afford to pay out of its taxes. Puerto Rico is a U.S. dependency, that is, an economic colony of the United States. It does not have domestic self-reliance. It's the antithesis of democracy, so it's never been in charge of its own economic policy and essentially has to do whatever the United States tells it to do. There was a reaction after the hurricane and insufficient U.S. support to protect the island and the enormous waste and corruption involved in the U.S. aid. The U.S. response was simply: "We won you fair and square in the Spanish-American war and you're an occupied country, and we're going to keep you that way." Obviously this is causing a political resentment.
BONNIE FAULKNER : You've already touched on this, but why has the World Bank traditionally been headed by a U.S. secretary of defense?
MICHAEL HUDSON : Its job is to do in the financial sphere what, in the past, was done by military force. The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers.
In this case the loss of life occurs in the debtor countries. Population growth shrinks, suicides go up. The World Bank engages in economic warfare that is just as destructive as military warfare. At the end of the Yeltsin period Russia's President Putin said that American neoliberalism destroyed more of Russia's population than did World War II. Such neoliberalism, which basically is the doctrine of American supremacy and foreign dependency, is the policy of the World Bank and IMF.
BONNIE FAULKNER : Why has World Bank policy since its inception been to provide loans for countries to devote their land to export crops instead of giving priority to feeding themselves? And if this is the case, why do countries want these loans?
MICHAEL HUDSON : One constant of American foreign policy is to make other countries dependent on American grain exports and food exports. The aim is to buttress America's agricultural trade surplus. So the first thing that the World Bank has done is not to make any domestic currency loans to help food producers. Its lending has steered client countries to produce tropical export crops, mainly plantation crops that cannot be grown in the United States. Focusing on export crops leads client countries to become dependent on American farmers – and political sanctions.
In the 1950s, right after the Chinese revolution, the United States tried to prevent China from succeeding by imposing grain export controls to starve China into submission by putting sanctions on exports. Canada was the country that broke these export controls and helped feed China.
The idea is that if you can make other countries export plantation crops, the oversupply will drive down prices for cocoa and other tropical products, and they won't feed themselves. So instead of backing family farms like the American agricultural policy does, the World Bank backed plantation agriculture. In Chile, which has the highest natural supply of fertilizer in the world from its guano deposits, exports guano instead of using it domestically. It also has the most unequal land distribution, blocking it from growing its own grain or food crops. It's completely dependent on the United States for this, and it pays by exporting copper, guano and other natural resources.
The idea is to create interdependency – one-sided dependency on the U.S. economy. The United States has always aimed at being self-sufficient in its own essentials, so that no other country can pull the plug on our economy and say, "We're going to starve you by not feeding you." Americans can feed themselves. Other countries can't say, "We're going to let you freeze in the dark by not sending you oil," because America's independent in energy. But America can use the oil control to make other countries freeze in the dark, and it can starve other countries by food-export sanctions.
So the idea is to give the United States control of the key interconnections of other economies, without letting any country control something that is vital to the working of the American economy.
There's a double standard here. The United States tells other countries: "Don't do as we do. Do as we say." The only way it can enforce this is by interfering in the politics of these countries, as it has interfered in Latin America, always pushing the right wing. For instance, when Hillary's State Department overthrew the Honduras reformer who wanted to undertake land reform and feed the Hondurans, she said: "This person has to go." That's why there are so many Hondurans trying to get into the United States now, because they can't live in their own country.
The effect of American coups is the same in Syria and Iraq. They force an exodus of people who no longer can make a living under the brutal dictatorships supported by the United States to enforce this international dependency system.
BONNIE FAULKNER : So when I asked you why countries would want these loans, I guess you're saying that they wouldn't, and that's why the U.S. finds it necessary to control them politically.
MICHAEL HUDSON : That's a concise way of putting it Bonnie.
BONNIE FAULKNER : Why are World Bank loans only in foreign currency, not in the domestic currency of the country to which it is lending?
MICHAEL HUDSON : That's a good point. A basic principle should be to avoid borrowing in a foreign currency. A country can always pay the loans in its own currency, but there's no way that it can print dollars or euros to pay loans denominated in these foreign currencies.
Making the dollar central forces other countries to interface with the U.S. banking system. So if a country decides to go its own way, as Iran did in 1953 when it wanted to take over its oil from British Petroleum (or Anglo Iranian Oil, as it was called back then), the United States can interfere and overthrow it. The idea is to be able to use the banking system's interconnections to stop payments from being made.
After America installed the Shah's dictatorship, they were overthrown by Khomeini, and Iran had run up a U.S. dollar debt under the Shah. It had plenty of dollars. I think Chase Manhattan was its paying agent. So when its quarterly or annual debt payment came due, Iran told Chase to draw on its accounts and pay the bondholders. But Chase took orders from the State Department or the Defense Department, I don't know which, and refused to pay. When the payment was not made, America and its allies claimed that Iran was in default. They demanded the entire debt to be paid, as per the agreement that the Shah's puppet government had signed. America simply grabbed the deposits that Iran had in the United States. This is the money that was finally returned to Iran without interest under the agreement of 2016.
America was able to grab all of Iran's foreign exchange just by the banks interfering. The CIA has bragged that it can do the same thing with Russia. If Russia does something that U.S. diplomats don't like, the U.S. can use the SWIFT bank payment system to exclude Russia from it, so the Russian banks and the Russian people and industry won't be able to make payments to each other.
This prompted Russia to create its own bank-transfer system, and is leading China, Russia, India and Pakistan to draft plans to de-dollarize.
BONNIE FAULKNER : I was going to ask you, why would loans in a country's domestic currency be preferable to the country taking out a loan in a foreign currency? I guess you've explained that if they took out a loan in a domestic currency, they would be able to repay it.
MICHAEL HUDSON : Yes.
BONNIE FAULKNER : Whereas a loan in a foreign currency would cripple them.
MICHAEL HUDSON : Yes. You can't create the money, especially if you're running a balance of payments deficit and if U.S. foreign policy forces you into deficit by having someone like George Soros make a run on your currency. Look at the Asia crisis in 1997. Wall Street funds bet against foreign currencies, driving them way down, and then used the money to pick up industry cheap in Korea and other Asian countries.
This was also done to Russia's ruble. The only country that avoided this was Malaysia, under Mohamed Mahathir, by using capital controls. Malaysia is an object lesson in how to prevent a currency flight.
But for Latin America and other countries, much of their foreign debt is held by their own ruling class. Even though it's denominated in dollars, Americans don't own most of this debt. It's their own ruling class. The IMF and World Bank dictate tax policy to Latin America – to un-tax wealth and shift the burden onto labor. Client kleptocracies take their money and run, moving it abroad to hard currency areas such as the United States, or at least keeping it in dollars in offshore banking centers instead of reinvesting it to help the country catch up by becoming independent agriculturally, in energy, finance and other sectors.
BONNIE FAULKNER : You say that: "While U.S. agricultural protectionism has been built into the postwar global system at its inception, foreign protectionism is to be nipped in the bud." How has U.S. agricultural protectionism been built into the postwar global system?
MICHAEL HUDSON : Under Franklin Roosevelt the Agricultural Adjustment Act of 1933 called for price supports for crops so that farmers could earn enough to invest in equipment and seeds. The Agriculture Department was a wonderful department in spurring new seed varieties, agricultural extension services, marketing and banking services. It provided public support so that productivity in American agriculture from the 1930s to '50s was higher over a prolonged period than that of any other sector in history.
But in shaping the World Trade Organization's rules, the United States said that all countries had to promote free trade and could not have government support, except for countries that already had it. We're the only country that had it. That's what's called "grandfathering". The Americans said: "We already have this program on the books, so we can keep it. But no other country can succeed in agriculture in the way that we have done. You must keep your agriculture backward, except for the plantation crops and growing crops that we can't grow in the United States." That's what's so evil about the World Bank's development plan.
BONNIE FAULKNER : According to your book: "Domestic currency is needed to provide price supports and agricultural extension services such as have made U.S. agriculture so productive." Why can't infrastructure costs be subsidized to keep down the economy's overall cost structure if IMF loans are made in foreign currency?
MICHAEL HUDSON : If you're a farmer in Brazil, Argentina or Chile, you're doing business in domestic currency. It doesn't help if somebody gives you dollars, because your expenses are in domestic currency. So if the World Bank and the IMF can prevent countries from providing domestic currency support, that means they're not able to give price supports or provide government marketing services for their agriculture.
America is a mixed economy. Our government has always subsidized capital formation in agriculture and industry, but it insists that other countries are socialist or communist if they do what the United States is doing and use their government to support the economy. So it's a double standard. Nobody calls America a socialist country for supporting its farmers, but other countries are called socialist and are overthrown if they attempt land reform or attempt to feed themselves.
This is what the Catholic Church's Liberation Theology was all about. They backed land reform and agricultural self-sufficiency in food, realizing that if you're going to support population growth, you have to support the means to feed it. That's why the United States focused its assassination teams on priests and nuns in Guatemala and Central America for trying to promote domestic self-sufficiency.
BONNIE FAULKNER : If a country takes out an IMF loan, they're obviously going to take it out in dollars. Why can't they take the dollars and convert them into domestic currency to support local infrastructure costs?
MICHAEL HUDSON : You don't need a dollar loan to do that. Now were getting in to MMT. Any country can create its own currency. There's no reason to borrow in dollars to create your own currency. You can print it yourself or create it on your computers.
BONNIE FAULKNER: Well, exactly. So why don't these countries simply print up their own domestic currency?
MICHAEL HUDSON : Their leaders don't want to be assassinated. More immediately, if you look at the people in charge of foreign central banks, almost all have been educated in the United States and essentially brainwashed. It's the mentality of foreign central bankers. The people who are promoted are those who feel personally loyal to the United States, because they that that's how to get ahead. Essentially, they're opportunists working against the interests of their own country. You won't have socialist central bankers as long as central banks are dominated by the International Monetary Fund and the Bank for International Settlements.
BONNIE FAULKNER : So we're back to the main point: The control is by political means, and they control the politics and the power structure in these countries so that they don't rebel.
MICHAEL HUDSON : That's right. When you have a dysfunctional economic theory that is destructive instead of productive, this is never an accident. It is always a result of junk economics and dependency economics being sponsored. I've talked to people at the U.S. Treasury and asked why they all end up following the United States. Treasury officials have told me: "We simply buy them off. They do it for the money." So you don't need to kill them. All you need to do is find people corrupt enough and opportunist enough to see where the money is, and you buy them off.
BONNIE FAULKNER : You write that "by following U.S. advice, countries have left themselves open to food blackmail." What is food blackmail?
MICHAEL HUDSON : If you pursue a foreign policy that we don't like -- for instance, if you trade with Iran, which we're trying to smash up to grab its oil -- we'll impose financial sanctions against you. We won't sell you food, and you can starve. And because you've followed World Bank advice and not grown your own food, you will starve, because you're dependent on us, the United States and our Free World Ó allies. Canada will no longer follow its own policy independently of the United States, as it did with China in the 1950s when it sold it grain. Europe also is falling in line with U.S. policy.
BONNIE FAULKNER : You write that: "World Bank administrators demand that loan recipients pursue a policy of economic dependency above all on the United States as food supplier." Was this done to support U.S. agriculture? Obviously it is, but were there other reasons as well?
MICHAEL HUDSON : Certainly the agricultural lobby was critical in all of this, and I'm not sure at what point this became thoroughly conscious. I knew some of the World Bank planners, and they had no anticipation that this dependency would be the result. They believed the free-trade junk economics that's taught in the schools' economics departments and for which Nobel prizes are awarded.
When we're dealing with economic planners, we're dealing with tunnel-visioned people. They stayed in the discipline despite its unreality because they sort of think that abstractly it makes sense. There's something autistic about most economists, which is why the French had their non-autistic economic site for many years. The mentality at work is that every country should produce what it's best at – not realizing that nations also need to be self-sufficient in essentials, because we're in a real world of economic and military warfare.
BONNIE FAULKNER : Why does the World Bank prefer to perpetrate world poverty instead of adequate overseas capacity to feed the peoples of developing countries?
MICHAEL HUDSON : World poverty is viewed as solution , not a problem. The World Bank thinks of poverty as low-priced labor, creating a competitive advantage for countries that produce labor-intensive goods. So poverty and austerity for the World Bank and IMF is an economic solution that's built into their models. I discuss these in my Trade, Development and Foreign Debt book. Poverty is to them the solution, because it means low-priced labor, and that means higher profits for the companies bought out by U.S., British, and European investors. So poverty is part of the class war: profits versus poverty.
BONNIE FAULKNER : In general, what is U.S. food imperialism? How would you characterize it?
MICHAEL HUDSON : Its aim is to make America the producer of essential foods and other countries producing inessential plantation crops, while remaining dependent on the United States for grain, soy beans and basic food crops.
BONNIE FAULKNER : Does World Bank lending encourage land reform in former colonies?
MICHAEL HUDSON : No. If there is land reform, the CIA sends its assassination teams in and you have mass murder, as you had in Guatemala, Ecuador, Central America and Columbia. The World Bank is absolutely committed against land reform. When the Forgash Plan for a World Bank for Economic Acceleration was proposed in the 1950s to emphasize land reform and local-currency loans, a Chase Manhattan economist to whom the plan was submitted warned that every country that had land reform turned out to be anti-American. That killed any alternative to the World Bank.
BONNIE FAULKNER : Does the World Bank insist on client governments privatizing their public domain? If so, why, and what is the effect?
MICHAEL HUDSON : It does indeed insist on privatization, pretending that this is efficient. But what it privatizes are natural monopolies – the electrical system, the water system and other basic needs. Foreigners take over, essentially finance them with foreign debt, build the foreign debt that they build into the cost structure, and raise the cost of living and doing business in these countries, thereby crippling them economically. The effect is to prevent them from competing with the United States and its European allies.
BONNIE FAULKNER : Would you say then that it is mainly America that has been aided, not foreign economies that borrow from the World Bank?
MICHAEL HUDSON : That's why the United States is the only country with veto power in the IMF and World Bank – to make sure that what you just described is exactly what happens.
BONNIE FAULKNER : Why do World Bank programs accelerate the exploitation of mineral deposits for use by other nations?
MICHAEL HUDSON : Most World Bank loans are for transportation, roads, harbor development and other infrastructure needed to export minerals and plantation crops. The World Bank doesn't make loans for projects that help the country develop in its own currency. By making only foreign currency loans, in dollars or maybe euros now, the World Bank says that its clients have to repay by generating foreign currency. The only way they can repay the dollars spent on American engineering firms that have built their infrastructure is to export – to earn enough dollars to pay back for the money that the World Bank or IMF have lent.
This is what John Perkins' book about being an economic hit man for the World Bank is all about. He realized that his job was to get countries to borrow dollars to build huge projects that could only be paid for by the country exporting more – which required breaking its labor unions and lowering wages so that it could be competitive in the race to the bottom that the World Bank and IMF encourage.
BONNIE FAULKNER : You also point out in Super Imperialism that mineral resources represent diminishing assets, so these countries that are exporting mineral resources are being depleted while the importing countries aren't.
MICHAEL HUDSON : That's right. They'll end up like Canada. The end result is going to be a big hole in the ground. You've dug up all your minerals, and in the end you have a hole in the ground and a lot of the refuse and pollution – the mining slag and what Marx called the excrements of production.
This is not a sustainable development. The World Bank only promotes the U.S. pursuit of sustainable development. So naturally, they call their "Development," but their focus is on the United States, not the World Bank's client countries.
BONNIE FAULKNER : When Super Imperialism: The Economic Strategy of American Empire was originally published in 1972, how was it received?
MICHAEL HUDSON : Very positively. It enabled my career to take off. I received a phone call a month later by someone from the Bank of Montreal saying they had just made $240 million on the last paragraph of my book. They asked what it would cost to have me come up and give a lecture. I began lecturing once a month at $3,500 a day, moving up to $6,500 a day, and became the highest-paid per diem economist on Wall Street for a few years.
I was immediately hired by the Hudson Institute to explain Super Imperialism to the Defense Department. Herman Kahn said I showed how U.S. imperialism ran rings around European imperialism. They gave the Institute an $85,000 grant to have me go to the White House in Washington to explain how American imperialism worked. The Americans used it as a how-to-do-it book.
The socialists, whom I expected to have a response, decided to talk about other than economic topics. So, much to my surprise, it became a how-to-do-it book for imperialists. It was translated by, I think, the nephew of the Emperor of Japan into Japanese. He then wrote me that the United States opposed the book being translated into Japanese. It later was translated. It was received very positively in China, where I think it has sold more copies than in any other country. It was translated into Spanish, and most recently it was translated into German, and German officials have asked me to come and discuss it with them. So the book has been accepted all over the world as an explanation of how the system works.
BONNIE FAULKNER : In closing, do you really think that the U.S. government officials and others didn't understand how their own system worked?
MICHAEL HUDSON : Many might not have understood in 1944 that this would be the consequence. But by the time 50 years went by, you had an organization called "Fifty Years Is Enough." And by that time everybody should have understood. By the time Joe Stiglitz became the World Bank's chief economist, there was no excuse for not understanding how the system worked. He was amazed to find that indeed it didn't work as advertised, and resigned. But he should have known at the very beginning what it was all about. If he didn't understand how it was until he actually went to work there, you can understand how hard it is for most academics to get through the vocabulary of junk economics, the patter-talk of free trade and free markets to understand how exploitative and destructive the system is.
BONNIE FAULKNER : Michael Hudson, thank you very much.
MICHAEL HUDSON : It's always good to be here, Bonnie. I'm glad you ask questions like these.
I've been speaking with Dr. Michael Hudson. Today's show has been: The IMF and World Bank: Partners in Backwardness. Dr. Hudson is a financial economist and historian. He is president of the Institute for the Study of Long-Term Economic Trend, a Wall Street financial analyst and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. His 1972 book, Super Imperialism : The Economic Strategy of American Empire , a critique of how the United States exploited foreign economies through the IMF and World Bank, the subject of today's broadcast, is posted in PDF format on his website at michael-hudson.com. He is also author of Trade, Development and Foreign Debt , which is the academic sister volume to Super Imperialism. Dr. Hudson acts as an economic advisor to governments worldwide on finance and tax law. Visit his website at michael-hudson.com.
Guns and Butter is produced by Bonnie Faulkner, Yarrow Mahko and Tony Rango. Visit us at gunsandbutter.org to listen to past programs, comment on shows, or join our email list to receive our newsletter that includes recent shows and updates. Email us at [email protected] . Follow us on Twitter at #gandbradio.
|
|
|
Jun 29, 2019 | www.moonofalabama.org
snake , Jun 28, 2019 10:45:32 PM | 90
worth repeating=> wagelaborer @ 16 said;"The neoliberal economic plan is to suck the wealth out of the working class and funnel it up to the top 10%, especially the 1%. How to keep the working class from noticing the theft? How about divide and conquer?
Absolutely right on target..
@21 also with;
"Meanwhile, our ruling overlords pick their next puppet, let us all "vote" on computerized machines, and then the talking heads announce the "winner".And it all starts over. Just about covers it..
Good posts..
Putin's statesmanship is obvious...ben @ 72
juliania , Jun 28, 2019 11:04:54 PM | 91
C I eh? , Jun 29, 2019 3:58:10 AM | 112 BG , Jun 29, 2019 4:18:59 AM | 113At the end of the interview, Putin is asked to name someone he admires (I might have misremembered so do correct me if that wasn't the question). His answer surprised me - Peter the Great. That answer surprised me as there are some things about Peter the Great that wouldn't seem so admirable, but then I suppose much flowed from his reign.
Dostoievski did have roots in the liberalism of the day, being a Saint Petersburg resident and all, and his great talent was achieved thanks to the Europeanization which Peter helped bring about for Russia. His, Dostoievski's novels draw on European literature but bring to it a quality that is uniquely Russian. So too does their classical music, the ballet, opera - and Russian's know full well that their own Tchaikovski and many of their great dancers were and are gay.
Do you then condemn and reject? No, you do not. They are great artists; you cannot. There's the depth of Russian complexity - it is both east and west and its Christianity, as well as its atheism, is too.
It was Dostoievski after all, who found solace in the belief that the Russian people were the source of Russia's greatness, while embracing the slavic heritage; so indeed there is an interesting mixture there of elite and not so elite, which refuses really to be categorized as this or that 'ism'. It's like the idea of multipolarity - all fervent beliefs are to be respected but not one dominating over all the rest.
Has everybody forgotten the mess Russia was in during the late 90s? The Russians have not.arby , Jun 29, 2019 7:49:42 AM | 124In 1999, Shamil Basaev and his gang were on the verge of taking over Dagestan and completely cutting Russian land connection to the Eastern parts of the Caucasus. After it became clear how serious the situation was, Putin became Prime minister and on New Year's day Yeltsin resigned transferring power to Putin.
The first thing Putin did as acting president was to visit the troops in Chechnya and raise morale. In two years, the war was basically over, the rest being mop-up ops only.
Do you remember that one of the first things that he did when first elected was to gather the oligarchs and make them sign in !public! that from now on they will start paying taxes, treat their workers as humans and not mess in politics. The famous moment when Deripaska forgot to give Putin back his pen, the "please, give me my pen back" by Putin and the scared look on Deripaska's face?
Didn't Putin say in the early 2000s:"It is best for you to keep your money in Russia. Or you may found yourself choked by dust chasing for your money fruitlessly in Western courts"? Oh, the irony, 15 years later...
How much taxes did Yukos/Khodorkovsky pay? Anyone aware of the famous scheme where crude oil was classified in accounting as "earthen liquid", then bought from subsiduaries for nothing, so no taxes were paid. And now Gazprom or Rosneft announce that they have an annual income of 100 billion USD (figures are as an example) and that they paid 50 billion of it as taxes to the state?
The situation in Russia in Putin's early years was so dire that there was no other future but breakup and misery. You make your conclusions.
---
Seems a lot of folks think these "Russian Oligarchs" just showed up out of the blue.Russia was a communist country so how did a few 20/30 year olds communists manage to become billionaire oligarchs in 10 years or less after the fall of communism? My guess is money from the west supplied to a few to buy up Russia for less than pennies on the dollar.Peter AU 1 , Jun 29, 2019 8:10:09 AM | 126Putin described Oligarchs as people that influence the government in ways that create even more wealth for themselves. In that regard he said there are no more oligarchs in Russia.
Those billionaires have all fled Russia it seems.
arby 124somebody , Jun 29, 2019 9:15:52 AM | 131This is a good video on the rise of the oligarchs.https://www.youtube.com/watch?v=oLNKqbwec0s
It is some time since I watched it, but a big part of how the oligarchs came to control most of the state assets was in the way Anatoly Chubais went about privatisation. From memory all citizens were given paper that gave them part ownership of state assets. The wannabe oligarchs snapped these up for peanuts and owned the bulk of what were state assets.
128 arbysomebody , Jun 29, 2019 9:33:49 AM | 132I don't know about "coddling". But it is clear that - apart from the military-industrial complex, the securitiy services and state controlled oil and gas, this is where the power is in Russia.
Putin is in the role of mediator between these power centers. He also tries to rally the population (Russians know what revolution means) by religion, "traditional values", the promise of security and stability, and yes - Make Russia Great Again - therefore - Peter the Great.
The problem is that Russian oligarchy is without legitimacy. Most oligarchy world wide is based on historical robbery but in Russia it is within this generation . They used to be part of the Soviet nomenklatura Communist Party network. It IS conceivable to litigate the riches robbed from the people in the 1990's (and has been done to oligarchs "not close to Putin") and the only shield between "the oligarchs" and Russians considering this idea is Putin's popularity and "Russian conservatism".
The problem of rule by law in Russia.somebody , Jun 29, 2019 9:36:32 AM | 133These high-profile cases suggest that Russian legal outcomes, while unpredictable if one goes by the content of the law, are entirely predictable if one knows the preferences of the political sovereign: the Kremlin always wins.However, this predictability is exaggerated. Outside a few very salient cases, the Kremlin either does not reveal its preferences or simply has no preferences.
When the Kremlin's position is uncertain, lower-level political actors, the prosecution, and judges try to guess the politically correct outcome and this guessing game introduces significant unpredictability into the legal regime. In addition, when political actors vie for relative power within the regime, they often seek to demonstrate that power by influencing court decisions in politically relevant cases.
Consider the frequent conflicts between mayors of major cities and regional governors. These conflicts are often fought vicariously through court cases, with each side attempting to mobilize enough political resources up the power ladder to secure a victory in court. Judges face the tough task of interpreting the signals that come from judicial superiors and the extrajudicial actors to deliver a decision that would be acceptable to whoever represents power (vlast') in that concrete case.
add to 132 - So the only security for Russian oligarchs is to legalize their riches abroad - which they have done - or - if forced to keep their capital in Russia because of sanctions - Putin.Jen , Jun 29, 2019 9:41:37 AM | 134Somebody @ 119:The proposed legislation that was known as Rotenberg's Law (after Italy sanctioned Arkady Rotenberg's properties in that country) passed a first reading in the Duma in October 2014. That is not the same as being declared law: there is a second reading in the Duma the legislation should have undergone and passed, and that second reading appears not to have been done . Objections to the legislation were raised by the Supreme Court of the Russian Federation and the Supreme Arbitration Court, and the Minister for Economic Development at the time (late 2014) also raised concerns.
It seems odd that every business venture that might need some government funding or funding to develop necessary infrastructure has to undergo deliberation twice by lower houses in a country's parliament and then passed through the senate or its equivalent before the venture can go ahead?
If business people talk to Putin or people close to him, that does not mean their venture can go ahead without being put to tender or subjected to scrutiny to see that it complies with current regulations. I merely observed that it seems that business people who happen to meet Putin or talk to him about a venture they might have, seem to get tarred with the "Putin crony" brush.
The Moscow Times is an English-language weekly newspaper with a small circulation (about 55,000) which is given away for free. For several years it was published by a Finnish company (Sanoma Corporation). The newspaper is currently owned by a Dutch-based owner and its CEO runs a catering business for commercial airlines. For a leading English-language Russian newspaper, The Moscow Times seems to have a poor business model.
|
|
|
Jun 01, 2019 | consortiumnews.com
elmerfudzie , May 30, 2019 at 17:37
Tainted tenure indeed! No one asks the right questions anymore. For example, where did all that Brexit cash come from? As I commented previously at CONSORTIUMNEWS and it is redacted here; “The Panama Papers signaled a need for radical change(s) in the EU banking laws. Hiding money, legit or not from, fair and open taxation, has become increasingly difficult for the upper crust….”
The BREXIT cash originated, no surprise folks, from a Gibraltar based firm, where a Mr Arron Banks (big bucks Banks) a guy with money to burn, with corporate holdings in the Isle of Man and too, one of his buddies, an Alan Kentish of the STM group specializing in, oh you’ll love this, offshore wealth preservation! LOL
And again, a Mr. Jim Mellon a for real billionaire, several times over I should think, the same guy who carpetbagged Russia after the collapse of the CCCP. His gleanings were called “privatization”… of poor mother Russia. Well, to make a long story short, Mr Kentish, the original pro-BREXITeer was arrested in Gibraltar under the UK’s Crime Act for such suspicious money funneling(s). My oh my Ms May, what strange political bedfellows you seem to have!
|
|
|
Apr 28, 2019 | www.moonofalabama.org
Piotr Berman , Apr 27, 2019 3:26:43 PM | link
I think that at least some weapon systems that USA makes or develops can be indeed superior. The most acute loss from the approach of "invest in over-extending and un-balancing the opponent" is that USA, while powerful, cannot do everything in the same time.
My favorite comparison chart is timeliness of subway systems in major metropolitan areas. Honestly, I cannot find it, because the search is swamped with the tales of woe of subway commuters in NYC. As befits the greatest financial center, cultural metropolis etc. etc., NYC has a transportation system that is comparable in its extend to other metropolitan areas like Tokyo, Paris or London. However, the performance is uninspiring. On the chart in NYT that I can't find out at the moment, only Mexico City had a lower percentage of train rides delayed by less than 10 minutes. I checked Moscow that has a larger subway system (compared to NY) and which was not on the chart. They pride themselves with frequency of delays that is 5 times smaller than in Paris (50 times smaller than in NYC?). Moscovites can actually plan their daily lives assuming that their commutes will arrive on time.
This is the most glaring example of a lost opportunity to take care of domestic needs, but the quality of education, healthcare etc. is mediocre compared with the rest of OECD, although there is always the southern neighbor that saves USA from being dead last.
Incidentally, NYC subway is not exactly underfunded, instead, it may have the most irrational management among major metropolitan areas which accurately reflects deficiencies of American political system. Bloated costs are pervasive across many areas, surely in military, healthcare and broadly meant policing, and their originate in lobbo-cracy, a plethora of lobbies grabbing chunks of monies either directly spent or (mis)regulated by the government. The activity of these lobbies is tightly regulated by elaborate rules, but the end effect is as if USA were pathetically corrupted (say, half as corrupted as Nigeria).
Piotr Berman , Apr 27, 2019 3:46:11 PM | link
Concerning the capability of wrecking finances of other states, USA is not a slouch, the most powerful weapon is economic advise. If I interpret news correctly, it were experts of Goldman Sachs that help Greek government to borrow about twice as much as they could handle in the long run. The wreckage in Russia was as impressive, but, alas, hard to repeat, so now it remains to carp about their "bad behavior".
Sanctions are also powerful when directed at small/medium size economies. Russia, although disparaged as "a smaller economy than Italy", but in actuality, Italy has "GDP per capity PPP" that is 40% larger than Russia, and Russia has 2.4 times larger population, so quite a bit larger economy in terms of "purchasing parity", and the most glaring domestic production deficiency are fruit and vegetables that, according to latest news, have a number of potential suppliers that are most glad when they can sell their produce.
|
|
|
Apr 18, 2019 | www.moonofalabama.org
bevin , Apr 17, 2019 9:13:07 AM | link
Craig Murray has a piece on this today. There is nothing very new in what he writes but he sees the significance of this story, which is not about ducks or children or Donald Trump's personality but a concerted and thorough campaign, carried out largely by British state actors, to deepen the 'west's' isolation of Russia.
https://www.craigmurray.org.uk/
The real story of both the Cold War and the continually recurring propaganda stories about the "millions" of "victims of communism" is that the Soviet Union was manipulated throughout its history by capitalist control over the international economy. Like a demonic organist capitalist governments pulled out all the stops to control the moods and the policies of a state that the Bolsheviks never did get to rule.
In the end the Politburo gave in and did what the 'west' had always been wanted which is to hand over the country, lock, stock and population to the cannibals of capital.
The result being what was probably, after the 1930-45 war, the largest kill off of Russians in modern history: Yeltsin plus Harvard Business School being responsible for many more deaths than even the intoxicated propagandist Robert Conquest ever dreamed of.
It is that total control over Russia, through the manipulation of its economy, and the direction of its capitalists, that is behind the long series of sanctions, which are being added to every day: their purpose is to re-invent Yeltsinism, re-empower the Fifth Column in the Kremlin, and, in a stroke, re-establish the inevitable and eternal hegemony of the Washington centered Empire.
In this work the assistance of the 'cousins'in MI6 and GCHQ, plus the entire British military establishment has been crucial in a period in which the subservience of POTUS to the Deep State was, thanks to the underestimation of his electoral chances, very much in question. During a period in which Trump had to be tamed and brought under control the UK Establishment's assistance in coming up with a series of highly publicised interventions was crucia l.
Lysias points out that Haspel had acted as the CIA's Head of Station in London in 2016. It was in London that the entire "Russiagate" nonsense was put together, with British based actors continually prodding Congress, the media and the Democrats to act on revelations regarding Papadopolous, Mifsud, Stefan Halper.
Skripal was just one more effort to tighten sanctions against Putin's allies in the Russian oligarchy and isolate Trump from foreign policy initiatives not approved by the Deep State. The significance of the NY Times story, then, is that, inadvertently it reinforces the reality that in the matter of Russiagate and Trump all roads lead to London, the Tory Establishment, which has been living off US-Russian tensions for seventy years and security agencies doing what the CIA cannot do for itself.
|
|
|
Apr 05, 2019 | larrysummers.com
March 28, 2019
Tax reform debates have been transformed in recent weeks by a shift in emphasis from revenue raising and progressivity to an emphasis on going after the rich for the sake of equality and justice. Bold proposals from Representative Alexandria Ocasio-Cortez of New York, for a 70 percent marginal tax rate on top earners, and from Senator Elizabeth Warren of Massachusetts -- a 2020 Democratic presidential candidate -- for a wealth tax on those worth more than $50 million have attracted widespread attention.
Warren's proposal aspires to raise roughly 1 percent of GDP ($2.75 trillion in the next decade). Ocasio-Cortez's proposal is estimated to generate around one-third of 1 percent ($720 billion in the next decade). By way of comparison, the Trump tax cuts will cost the federal government about $2 trillion over the next decade. We agree with Ocasio-Cortez and Warren that increases in tax revenue of at least this magnitude are necessary. We also agree that the way forward is by generating more revenue from the most affluent Americans. Indeed, it may well be necessary and appropriate to raise more than Warren's targeted 1 percent of GDP from those at the top.
Where we differ from Warren and Ocasio-Cortez is in our belief that the best way to begin raising additional revenue from highest income tax payers is with a traditional tax reform approach of base broadening and loophole closing, improved compliance, and closing of shelters. We show that these measures, along with partial repeal of the Trump tax cut, can raise far more than recent proposals. These measures will increase economic efficiency, make our tax system more fair, and are perhaps more politically feasible than a wealth tax or large hikes of top rates. It may be that measures beyond base-broadening are appropriate and desirable given the magnitude of the revenue challenge we face. But base-broadening is the right place to begin.
Below we outline proposals for broadening the tax base that meet a stringent test: These are measures that would be desirable even if we did not have revenue needs. They are progressive and attack those who have received special breaks for too long. And together, the revenue-raising potential of these measures exceeds that of the 70 percent top rate or the wealth tax. We believe this is where the progressive tax policy debate should begin.
Emphasis on compliance and auditing of the rich. In 2017, the IRS had only 9,510 auditors -- down from over 14,000 in 2010. The last time the IRS had fewer than 10,000 auditors was in the mid-1950s. Since 2010, the IRS budget has decreased by over 20 percent in real terms. The result is that individuals and corporations are shirking their responsibilities: The most recent estimate by the IRS suggests that taxpayers paid only around 82 percent of owed taxes, losing the IRS over $400 billion a year.
The Congressional Budget Office estimates that spending an additional $20 billion on enforcement in the next decade could bring in $55 billion in additional tax revenues. This excludes the indirect deterrent effects of greater enforcement, which the Treasury Department has estimated are three times higher. Outlays at this level would still leave the IRS operating with budgets in real terms that were nearly 10 percent below peak levels, which themselves were leaving large amounts of revenue on the table.
In addition to the level of investment in enforcement, there is the question of the allocation of enforcement resources. It has been estimated that an extra hour spent auditing someone who earns more than $1 million a year generates an extra $1,000 in revenue. And yet in 2017 the IRS audited only 4.4 percent of returns with income of $1 million or higher, less than half the audit rate a decade prior. Remarkably, recipients of the earned income tax credit, who never have incomes above $50,000, are twice as likely to be audited as those who make $500,000 annually.
No one can know exactly the potential for increased enforcement to raise revenue. Suppose instead of investing an extra $20 billion over the next decade, we invested $40 billion and focused on wealthy taxpayers, perhaps taking the audit rate for million-dollar earners up to 25 percent. Considering the direct benefits and the multiplier from deterrence, it is not unreasonable to suppose that over a decade $300 billion to $400 billion could be raised.
This revenue increase -- unlike a revenue increase from new taxes or higher rates -- will have favorable incentive effects. It will encourage people to participate in the above-ground economy. And what could be more of a step toward fairness than collecting from wealthy scofflaws?
Closing corporate tax shelters. All too often, corporations are able to make use of tax havens, differences in accounting treatment across jurisdictions, and other devices to reduce tax liabilities. Economist Kimberly Clausing estimates that profit-shifting to tax havens costs the United States more than $100 billion a year. Although the Trump tax plan sought to reduce the incentives for profit-shifting, various exemptions and design flaws mean that the new system does little to deter shifting revenues to tax havens. Fairly incremental changes will have a large impact: For example, a per-country corporate minimum tax rather than a global minimum tax will increase tax revenues by nearly $170 billion in a decade.
But there is much more to be done. A robust attack on tax shelters -- that included, for example, tariffs or penalties on tax havens as well as stricter penalties for lawyers and accountants who sign off on dubious shelters -- could raise twice the revenue attainable from a per-country minimum tax, or about 30 billion annually. It would also encourage the location of economic activity in the United States and discourage the vast intellectual ingenuity that currently goes into tax avoidance.
Closing individual tax shelters. Like the corporations they own, wealthy individuals make use of myriad loopholes in the tax code to shelter their personal income from taxation. Most high-income taxpayers pay a 3.8 percent tax that pays into entitlement programs like Social Security and Medicare. However, some avoid these payroll taxes by setting up pass-through businesses and re-characterizing large shares of their income as profits from business ownership, rather than wage income. The Obama administration's proposals to close payroll tax loopholes were estimated to generate $300 billion over a decade.
Another egregious loophole is 1031 exchanges, which allow real estate investors to sell property, take a profit, and defer paying taxes on those profits so long as they reinvest them in similar investments. There is no limit on the number of these exchanges that investors can make. Consequently, the wealthy use 1031 exchanges to build up long-term tax-deferred wealth that can eventually be passed down to their heirs without taxes ever being paid. Outright repeal of 1031 exchanges were estimated in 2014 to raise around $40 billion in a decade and would raise almost $50 billion today.
Another tool used to shelter individual income from taxation is carried interest. Income that flows to partners of investment funds is often treated as capital gains and taxed at lower rates than ordinary income. This creates a tax-planning opportunity for investors to convert ordinary income into long-term capital gains that receive much more generous tax treatment. President Trump repeatedly vowed that his signature tax cuts would eliminate the carried-interest loophole, saying it was unfair that the ultra-wealthy were "getting away with murder." However, in the face of significant lobbying pressure, the administration abandoned these plans. The Joint Committee on Taxation estimates that taxing carried profits as ordinary income would generate over $20 billion in a decade.
Other ways in which individuals can shelter income include misvaluing interests such as shares in investment partnerships when putting them in retirement accounts as well as schemes involving nonrecourse lending.
Closing tax shelters would level the playing field in favor of investments by companies that create jobs and to the detriment of various kinds of financial operators. This would raise employment and incomes as well as contributing to fairness.
Eliminating "stepped-up basis." Wealth tax advocates rightly point to an important gap in our current system. An entrepreneur starts a company that turns out to be highly successful. She pays herself only a small salary, and shares in the company do not pay dividends, so the company can invest in growth. The entrepreneur becomes very wealthy without ever having paid appreciable tax, as the income that made the wealth possible represents unrealized capital gains.
Unrealized capital gains explain how Warren Buffett can pay only a few million dollars in taxes in a year when his wealth goes up by billions. Astoundingly, no capital gains tax is ever collected on appreciation of capital assets if they are passed on to heirs. Specifically: When an investor buys a stock, the cost of that purchase is the tax basis. If the stock rises in value and is then sold, the investor pays taxes on the gains. If an investor dies and leaves stock to her heir, that cost basis is "stepped up" to its price at the time the stock is inherited. The gain in value during the investor's life is never taxed.
Implementing the Obama administration's proposals for constructive realization of capital gains at death would raise $250 billion in the next decade. This is a progressive change that would impact only the very wealthy: Ninety-nine percent of the revenue from ending stepped-up basis will be collected from the top 1 percent of filers.
Eliminating stepped-up basis will also make the economy function better and so would be desirable even if it did not raise revenue. The fact that capital gains passed on to children entirely escape taxation provides aging small-business owners or real estate owners a strong incentive not to sell them to those who could operate them better while they are alive. It also makes it much more expensive to realize capital gains and use the proceeds to make new investments than it would be if the capital gains tax was inescapable.
Capping tax deductions for the wealthy. Today, a homeowner in the top tax bracket (post-Trump tax cuts, 37 percent) who makes a $1,000 mortgage payment saves $370 on her tax bill. Under an Obama administration proposal to limit the value of itemized deductions to 28 percent for all earners, that same write-off would save this wealthy taxpayer just $280. Importantly, such a cap would raise tax burdens only for the rich: Those with marginal rates under the cap would still be able to claim the full value of their itemized deductions. The plan to cap top-earners' itemized deductions was estimated to raise nearly $650 billion in a decade. Recognizing that the Trump tax plan scaled back the mortgage interest deduction and state and local tax deductions, we estimate that additional limits on top-earner deductions could generate around $250 billion in a decade.
As with the elimination of stepped-up basis, the distributional case for capping tax deductions is strong. The mortgage interest deduction provides a tax advantage to homeowners; promoting homeownership is a worthy goal. But there is little rationale for subsidizing home ownership at higher rates for richer rather than poorer taxpayers.
End the 20 percent pass-through deduction. Perhaps the most notorious of the Trump tax changes, the pass-through deduction provides a 20 percent deduction for certain qualified business income. This exacerbated the tax code's existing bias in favor of noncorporate business income and so reduces economic efficiency. And the complex maze of eligibility is arbitrary, foolish, and a drain on government resources: The Joint Committee on Taxation estimates that this provision will reduce federal revenues by $430 billion in the next decade. Eliminating the pass-through deduction will reduce incentives for tax gaming and raise revenue primarily from taxpayers making more than $1 million annually.
Broaden the estate tax base. Prior to the Trump tax reform, only 5,000 Americans were liable for estate taxes. The recent changes more than halved that small share by doubling the estate tax exemption to $22.4 million per couple. The Joint Committee on Taxation estimates that this change costs around $85 billion, with the benefits accruing entirely to 3,200 of the wealthiest American households. Repealing the Trump administration's changes and applying estate taxes even more broadly -- for example, as the Obama administration proposed, by lowering the threshold to $7 million for couples -- would raise around $320 billion in a decade. The estate tax would still only impact 0.3 percent of decedents.
In addition to the question of the appropriate floor on estates, there is also ample room to attack the many loopholes that enable wealthy families to largely avoid paying taxes when transferring wealth to their progeny during their lifetimes. This happens through a mix of trust arrangements, intra-family loans, and dubious valuation practices to evade gift-tax liability. Strengthening the taxation of estates would raise revenue and be efficient, diverting resources from tax planning and increasing work incentives for the children of the wealthy. We are enthusiastic about proposals, notably by Lily Batchelder, that call for the conversion of the estate tax into an inheritance tax, to appropriately tax inherited privilege and discourage large concentrations of wealth.
Increasing the corporate tax rate to 25 percent. When corporations began lobbying efforts on corporate tax reform, their stated objective was a 25 percent corporate rate. Business leaders produced estimates showing how this 25 percent rate would have prevented foreign purchases of thousands of companies and shifted billions in corporate taxable income to the United States. The Trump tax cuts delivered more than the business community asked, slashing the corporate rate to 21 percent. The CBO estimates that a 1 percentage point increase in the corporate tax rate will generate $100 billion in the next decade. Based on this estimate, a 4 percentage point increase to 25 percent will generate an additional $400 billion in revenue.
Raising the corporate tax rate would not increase the tax burden on most new investment, because it would raise in equal measure the value of the depreciation deductions that corporations could take when they undertook investments. The principle losers from an increase in the rate would be those earning economic rents in the form of monopoly profits and those who had received enormous windfalls from the Trump tax cut.
Closing tax shelters used by the wealthy alone raises more revenue than Ocasio-Cortez's proposal. And together, the reforms we propose raise far more than a 70 percent top tax rate, and more too than Warren claims her wealth tax will generate. These base-broadening, efficiency-enhancing reforms are the best way to start raising revenue as progressively and efficiently as possible. To be sure, it may well be that wealth taxation or large increases in top rates are necessary to adequately fund government activities. But we advocate these approaches only after the revenue-raising potential of base-broadening is exhausted.
Tomorrow: The challenges in the rate hike and wealth tax proposals.
|
|
|
Apr 04, 2019 | www.counterpunch.org
Academics have different interests from practitioners. Publications, tenure and mentoring students are university responsibilities, not responsibilities for governing the world. ( It is an open question whether [neoliberal] academics sub-consciously want to govern the world .)
Harvard University has a rule – known as the Kissinger rule – that faculty can only take two years off to do other activities such as government work in Washington.
David Halberstam's The Best and the Brightest is a damning recounting of how the Harvard elite failed to understand the Vietnam War because of its arrogance.)
|
|
|
Mar 31, 2019 | www.moonofalabama.org
S , Mar 30, 2019 8:51:37 PM | link
@b:What is the purpose of making that claim?The purpose is very simple: to create the perception that the government of Russia still somehow controls or manipulates the US government and thus gains some undeserved improvements in relations with the U.S. Once such perception is created, people will demand that relations with Russia are worsened to return them to a "fair" level. While in reality these relations have been systematically destroyed by the Western establishment (CFR) for many years.
It's a typical inversion to hide the hybrid war of the Western establishment against Russian people. Yes, Russian people. Not Putin, not Russian Army, not Russian intelligence services, but Russian people. Russians are not to be allowed to have any kind of industries, nor should they be allowed to know their true history, nor should they possess so much land.
Russians should work in coal mines for a dollar a day, while their wives work as prostitutes in Europe. That's the maximum level of development that the Western establishment would allow Russians to have (see Ukraine for a demo version). Why? Because Russians are subhumans.
Whatever they do, it's always wrong, bad, oppressive, etc. Russians are bad because they're bad. They must be "taught a lesson", "put into their place". It would, of course, be beneficial and highly profitable for Europeans to break with Anglo-Saxons and to live in peace and harmony with Russia, but Europeans simply can not overcome their racism towards Russians. The young Europeans are just as racist, with their incessant memes about "squatting Russians in tracksuits", "drunken Russians", etc., as if there's nothing else that is notable about a country of 147 million people.
The end goal of the Western establishment is a complete military, economic, psychological, and spiritual destruction of Russia, secession of national republics (even though in some of them up to 50% of population are Russians, but this will be ignored, as it has been in former Soviet republics), then, finally, dismemberment of what remains of Russia into separate states warring with each other.
The very concept of Russian nation should disappear. Siberians will call their language "Siberian", Muscovites will call their language "Moscovian", Pomorians will call their language "Pomorian", etc. The U.S. Department of State will, of course, endorse such terminology, just like they endorse the term "Montenegrian language", even though it's the same Serbo-Croatian language with the same Cyrillic writing system.
|
|
|
Mar 07, 2019 | www.nakedcapitalism.com
Yves here. Larry Summers, like Hillary Clinton, does not seem willing to get the message that it would behoove him to retreat from public life.By J. D. Alt, author of The Architect Who Couldn't Sing , available at Amazon.com or iBooks. Originally published at www.realprogressivesusa.com
Lawrence Summers, according to Lawrence Summers, is a "serious economist." He has just written an op-ed in the Washington Post in which he seriously explains why Modern Money Theory -- as proposed by "fringe economists," as he calls them -- is a recipe for disaster. I am going to leave it to the "fringe economists" to rebut Mr. Summers; (I'm confident that professors Wray, Kelton, Tcherneva, Tymoigne, and Fullwiler can take care of that job quite easily). What I want to consider is something even more fundamental: How is it that someone who presents himself as a "serious economist" can get away with speaking incoherently while expecting us -- the everyday citizens of America -- to take what he is saying as true?
Here is Summers' first point about why MMT is a recipe for disaster: "Modern monetary theory holds out the prospect that somehow by printing money, the government can finance its deficits at zero cost. In fact, in today's economy, the government pays interest on any new money it creates, which takes the form of its reserves held by banks at the Federal Reserve. Yes, there is outstanding currency in circulation, but because that can always be deposited in a bank, its quantity is not controlled by the government. Even money-financed deficits cause the government to incur debt."
Yes, that's very clear and logical, isn't it? The government "prints" money and then pays interest on it? The interest it pays become the "reserves" in the Federal Reserve system? And what exactly does that have to do with "outstanding currency in circulation"? And what is it exactly that happens when that "outstanding currency" gets deposited in a bank? And if "money-financed" deficits cause the government to incur debt, maybe we should think about financing our deficits with something other than money? These are all serious economic questions.
Summers' incoherent rambling reminds me of another case of incoherent ramblings reported, coincidentally, in the same edition of the Washington Post: Donald Trump's CPAC speech as evaluated by columnist Eugene Robinson . Here are a few instances of Trump apparently giving his best impersonation of Lawrence Summers:
"When the wind stops blowing, that's the end of your electric. Let's hurry up. 'Darling -- Darling, is the wind blowing today? I'd like to watch television, Darling.' No, but it's true . Now Robert Mueller never received a vote, and neither did the person that appointed him. And as you know, the attorney general says, 'I'm going to recuse myself. I'm going to recuse.' And I said, why the hell didn't he tell me that before I put him in? How do you recuse yourself?"
Lawrence Summers' second point about the fallacy of MMT goes like this: "Contrary to the claims of modern monetary theorists, it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once to avoid the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such an inflation tax. If this limit is exceeded, hyperinflation will result."
Really, that all must be true, because Summers is a serious economist. Didn't really know there were third world countries that have been practicing Modern Money Theory for a long time -- but obviously it didn't work out well for them. And, clearly, you can't tax people more than they possess, so that proves it: hyperinflation!
Donald Trump had more to ramble about as well: "And they showed -- they showed from the White House all the way down There were people. Nobody has ever seen it. The Capitol down to the Washington Monument -- people. But I saw pictures that there were no people. Those pictures were taken hours before . They had to walk with high-heels, in many cases. They had to walk all the way down to the Washington Monument and then back. And I looked, and I made a speech, and I said, before I got on -- I said to the people who were sitting next to me, 'I've never seen anything like this.'"
Lawrence Summers' third denunciation of MMT is as follows: "Modern monetary theorists typically reason in terms of a closed economy. But a policy of relying on central bank finance of government deficits, as suggested by modern monetary theorists, would likely result in a collapsing exchange rate. This would in turn lead to increased inflation, increased long-term interest rates (because of inflation), risk premiums, capital fleeing the country, and lower real wages as the exchange rate collapsed and the price of imports soared."
But of course! That's all obvious, isn't it? Mr. Summers is just pointing it out. Exchange rates would collapse. It's the most obvious thing any reader of his argument can easily grasp and understand -- and that means "risk premiums" too (which clearly nobody wants).
At one point in his CPAC speech Donald Trump says this: "You know I'm totally off-script right now. And this is how I got elected, by being off-script. True. And if we don't go off-script, our country is in big trouble, folks. Because we have to get it back."
What strikes me is that our country is, indeed, in big trouble -- but it's because the "script" that's being read to us by our political leaders, commentators, and "serious economists" is nothing more than an incoherent babbling.
bruce wilder , March 7, 2019 at 10:15 am
"somehow by printing money" is a significant tell -- the stupider the clichéd metaphor, the more incoherent the economics. Summers in using that cliche is confusing currency with money, which error really ought to embarrass him, but obviously does not.
paulmeli , March 7, 2019 at 12:06 pm
Summers' Op-Ed is bafflegab of the highest order. It's sad that that's what passes for informed commentary these days, but I think for monetary issues that's always been the case. Any school that dares to teach monetary economics is defunded, exiled to 2nd or 3rd tier status.
There has been a lot of pushback on this Op-Ed and Krugman's from unexpected sources (Forbes, Bloomberg). This response is especially good:
https://www.forbes.com/sites/johntharvey/2019/03/05/mmt-sense-or-nonsense/#489e306c5852
Also, demonstrating what a careerist Krugman is: Paul Krugman to Bernard Lietaer: "Never touch the money system" https://www.youtube.com/watch?v=Q6nL9elK0EY . (short – 44 sec.)
Carey , March 7, 2019 at 12:33 pm
Good stuff! Thanks for those links.
Susan the Other , March 7, 2019 at 2:05 pm
Well of course Krug, "never look at money" because if you do you'll be blinded by reality.
sgt_doom , March 7, 2019 at 2:10 pm
Krugman has been a member of the lobbyist group for the central bankers, the Group of Thirty (www.group30.org) ever since it was founded by the Rockefeller Foundation back in 1978.
Carla , March 7, 2019 at 3:27 pm
I read the John T Harvey piece this a.m. because Yves had it in Links. It was so good I sent him a fan letter.
Tomonthebeach , March 7, 2019 at 4:27 pm
I read it 2 days ago and felt no compulsion to praise. Harvey includes some Summersian bullshit of his own. For example: "Just as the President's daughter said days ago, people like to work. Quite right."
Harvey clearly does not live on the beach where the slacker-surfer lifestyle dominates. Likewise, it seems likely that he has never had to manage human resources in a large organization where more than just a few workers are obviously not liking what they are doing.
The biggest barrier to full-employment is that not everybody wants to work or at least work very hard. That causes co-worker resentment, an unproductive workplace climate, and if ignored long enough, it can impair productivity to the extent that everybody becomes out of work.
Grebo , March 7, 2019 at 5:56 pm
So, you don't consider surfing work? Perhaps you're right, but I don't consider lack of enthusiasm for bullshit jobs evidence that people don't want to work.
paulmeli , March 7, 2019 at 6:02 pm
The biggest barrier to full-employment is that not everybody wants to work or at least work very hard.
Thank God for those people, it makes my life so much easier. You wouldn't like working in a world where everyone and anyone could replace you.
I've never worked in an environment where everyone pulled their own weight, but it's also true that we tend to hold others to a higher standard than we hold ourselves.
At any rate, I still don't want them to starve.
tegnost , March 7, 2019 at 6:35 pm
I'm not sure where you're surfing but in my experience it's doctors, lawyers, mba, engineers, and their kids. This link tells the story of the modern day surfer vs the stereotypical slacker surfer
http://www.surfparkcentral.com/surfer-statistics-infographic-the-common-us-surfer/wetsuits cost hundreds of dollars, my cheapest new board was an ellington for $400 like 15 years ago (no, it can't really be that long ago?) My brothers quiver is easily worth $10,000, which is lucky for me because he can't ride them all at once. Not to say there isn't a large transient population, beaches have bathrooms and showers, but the surfer/slacker may not be a real thing?
tegnost , March 7, 2019 at 6:46 pm
also
https://brandongaille.com/22-surfing-industry-statistics-trends/
FTL
#12. In a survey about surfing in the United Kingdom, surfers were disproportionally represented in managerial, professional, or business-owning employment classes. Nearly 80% of surfers fit into these employment categories, compared to just 54% of the general population. (Surfers Against Sewage)#13. Surfers also have a higher level of education attainment compared to the general population. In the UK, 64% of surfers reported having a higher education, compared to just 27% of the general population. (Surfers Against Sewage)
Carey , March 7, 2019 at 5:14 pm
I thought it was notably good too, and clearly written. Agree or not, what he was saying was not in question, unlike Summers's/ Krugman's slippery stuff.
WheresOurTeddy , March 7, 2019 at 2:00 pm
Larry Summers is on a list of people I've created where if I read or hear something they write or say and agree with it, I go back and check my premise on said topic.
Have never had to do so with Summers. This entire editorial reeks of Upton Sinclair's famous quote "it's impossible to get someone to understand something when his paycheck depends on him not understanding it."
John Harvey in Forbes takes Summers, Rogoff, and clown prince Krugman down point by point as well.
Phil in KC , March 7, 2019 at 10:18 am
Because I have only a single college course in Macro (taken 40 years ago), I am hardly any kind of economist, certainly not a serious one. But I do have some ability to parse a sentence and figure out the meaning–usually. Thanks for pointing out that the garble I can make no sense of is just garble. I thought I was just one of the uninitiated and ignorant masses.
I am curious about the audience Summers had in mind when he wrote or uttered this. Who are they?
voteforno6 , March 7, 2019 at 11:58 am
I think the important information is conveyed to his intended audience via the title – the rest of it is filler, to justify printing it.
You're not alone in your interpretation of his column. I have enough confidence in my reading comprehension abilities to state affirmatively that his column is full of Thomas Friedman-like gibberish.
polecat , March 7, 2019 at 12:51 pm
Tatooine IS a hard language to parse, afterall ..
WheresOurTeddy , March 7, 2019 at 2:01 pm
this effort by Summers is the editorial equivalent of spinning wheels furiously in a pit of mud
Carey , March 7, 2019 at 2:37 pm
I see it more as a holding action by the usual cast of characters.
For how long will it work?Colonel Smithers , March 7, 2019 at 10:19 am
Thank you, Yves.
In the UK, we have a what you may call reverse Churchill problem, i.e. Churchill provokes mixed emotions in the UK, but is revered in the US. In the US, Summers provokes mixed emotions, but is revered in the UK, at least by the usual neo-liberal suspects. God Forbid. The family blogger has even been floated as a potential successor to Carney, probably a ploy by his vermin acolytes at the FT.
You will be delighted to hear that Summers' vicar on earth, or at least in the UK, New Labour family blogger Ed Balls was ousted from the Commons and some of public life by Andrea Jenkins. Jenkins is an Ultra Brexiteer, but History will be kind to her for sparing the long-suffering UK public from more of Balls. Oh, yes, she will be elevated to the Pantheon for that ouster alone.
diptherio , March 7, 2019 at 10:53 am
Larry Summers, famous for stating that there is a "good economic case" to be made for exporting all our toxic waste to Africa. Larry Summers, famous for claiming that there aren't more women in STEM fields because "girls are bad at math." Larry Summers, beloved of neo-liberals everywhere.
allan , March 7, 2019 at 10:57 am
How Larry Summers' memo hobbled Obama's stimulus plan [Dean Baker in The Guardian, 2012]
How Larry begat Donald. Austerity has consequences – who knew?
susan the Other , March 7, 2019 at 2:11 pm
indeed.
allan , March 8, 2019 at 10:41 am
Fiscal space and the aftermath of financial crises: How it matters and why [Christina Romer
and David Romer]Abstract: In OECD countries over the period 1980–2017, countries with lower debt-to-GDP ratios responded to financial distress with much more expansionary fiscal policy and suffered much less severe aftermaths. Two lines of evidence together suggest that the relationship between the debt ratio and the policy response is driven partly by problems with sovereign market access, but even more so by the choices of domestic and international policymakers. First, although there is some relationship between more direct measures of market access and the fiscal response to distress, incorporating the direct measures attenuates the link between the debt ratio and the policy response only slightly. Second, contemporaneous accounts of the policymaking process in episodes of major financial distress show a number of cases where shifts to austerity were driven by problems with market access, but at least as many where the shifts resulted from policymakers' choices despite an absence of difficulties with market access. These results point to a twofold message: conducting policy in normal times to maintain fiscal space provides valuable insurance in the event of financial crises, and domestic and international policymakers should not let debt ratios determine the response to crises unnecessarily. [emphasis added]
If only one of the authors had been in a position to shape the administration's response in early 2009
La vendetta è un piatto che va servito freddo.
JCC , March 7, 2019 at 4:29 pm
Not to mention the article published here on NC back in 2013:
The very thing that the former endowment chiefs had worried about and warned of for so long then came to pass. Amid plunging global markets, Harvard would lose not only 27 percent of its $37 billion endowment in 2008, but $1.8 billion of the general operating cash – or 27 percent of some $6 billion invested. Harvard also would pay $500 million to get out of the interest-rate swaps Summers had entered into, which imploded when rates fell instead of rising. The university would have to issue $1.5 billion in bonds to shore up its cash position, on top of another $1 billion debt sale. And there were layoffs, pay freezes, and deep, university-wide budget cuts.
shinola , March 7, 2019 at 4:40 pm
From that article:
"Summers is your man if you are a banker, looter, or plutocrat."
'nuff said.
WheresOurTeddy , March 7, 2019 at 2:04 pm
Churchill is revered in America by people whose memory only goes back to 1941 and even then, only plays the highlights.
This American thinks he was a war criminal many times over and in a just world would have died in a prison cell, but I recognize I'm the minority in my country
RBHoughton , March 7, 2019 at 8:39 pm
I don't believe anyone is completely useless. Al Gore made a follow-up film "An Inconvenient Sequel" which mentioned, inter alia, the likely failure of COP21 because India needed hundreds of gigawatts of new energy and the banks would dun them 13% on loans plus 2% for the exchange if they opted for green energy. Gore got onto Summers and a deal was thrashed out that was satisfactory to India. The country then signed the agreement along with the rest of the world. A man with that kind of clout with the hooligans in banking as valuable.
pretzelattack , March 7, 2019 at 8:47 pm
does he still have that kind of clout?
Redlife2017 , March 8, 2019 at 3:21 am
+1000 for some beautiful snark
Nina , March 7, 2019 at 10:21 am
I have considered Larry's presence in any political campaign the kiss of death, since Obama first ran for president. Fair warning, contenders for 2020! You do not want to be seen so much as shaking Larry's hand in public!
Matt Young , March 7, 2019 at 10:48 am
MMT is what we do. We cycle like MMT says we should, we tax and sequester like MMT says we should, we devalue once a generation as MMT says we should. We are MMT, Larry SUmmers is simply faking it to protect the Keynesian form of MMT. The difference between Keynes and MMT? MMTers have no assumption about smooth trajectories.
This is all the most useless debate among economists I have seen, and I have watched a ton of useless debates in the ten years of the last 'MMT' cycle. So, let us get on with the next MMT cycle, starting with a period of extraordinary means, followed by Tax and sequester, then if we are lucky, we get a devaluation, in proper MMT order.
bushtheidiot , March 7, 2019 at 12:19 pm
Bingo this guy gets it, we already print off a bunch of money to finance spending, lower interest rates to prop up spending and decrease debt costs, etc. Except the way we do it now benefits the rich by forcing the rest of us to spend spend spend because our money does nothing in the savings account. Meantime, the money gets pushed into stocks and bonds which benefits only a certain class.
This essentially paves the way for MMT, which is just to reallocate who gets the benefit of this money printing from the rich to the rest of us.
The current system clearly doesn't work, however, and the idea that we can just spend money we make up out of thin air as a stable plan is nonsense. Just like it was in 2008, and just like it is now with a 23 trilliion national debt.
We want medicare for all, increase the payroll tax and a small income tax, and that will do it. Charge everyone a "premium" for health coverage in their pay check that is far cheaper than what it is now, or let employers pay for it and get a tax deduction.
No need to print monopoly money for anyone–rich or poor. We are wealthy enough to afford this stuff.
WheresOurTeddy , March 7, 2019 at 2:08 pm
the rich have had socialism for decades. it has worked so well for them, now the rest of us want a bite.
I agree regarding Medicare for all but it should be free. If money's needed, let's tax the banksters to pay for it. After all the owe us $23 trillion.
jsn , March 7, 2019 at 1:59 pm
This is really no different from the dust big tobacco kicked up for 30 years to deny cancer, or big oil and climate denialism: there are a bunch of greedy b******s out there who have been making a killing off of looting, asset stripping and environmental and social market externalities doing all they can to milk the last dollar from a completely rotten system.
Summers is pitching in to obscure perceptions of the rot that serves him so well.
WheresOurTeddy , March 7, 2019 at 2:07 pm
Stop any significant % of the war machine spending $1T+ per year and spend it at home in the US on crushing the price of housing and providing a jobs guarantee; you wouldn't be able to run from the economic boom anywhere
shinola , March 7, 2019 at 11:03 am
How dare anyone question Mr. Summers proclamations!
He has the credentials, the experience, the insights of a world class economist!
Just look at what Mr. Summers & his crew did for the Russian economy after the collapse of the USSR.
[sarc off]Summers is the pet economist of the ultra neoliberal crowd.
WheresOurTeddy , March 7, 2019 at 2:10 pm
the word for people like Summers is "gatekeeper". He's doing his best to keep things within "the acceptable parameters of debate."
His is failing, will ultimately fail completely, and be discredited. I just hope he lives long enough to see it all happen.
Yves Smith Post author , March 7, 2019 at 4:12 pm
Look at what he did to Harvard! Wrecked its endowment by a stupid interest rate swaps bet. Harvard had to get rid of hot breakfasts and an expansion in Alford as a result.
John Wright , March 7, 2019 at 11:20 am
Disclaimer: I'm no economist as my degree is in electrical engineering.
I prefer to look at MMT as somewhat similar to a company issuing additional common and preferred stock.
The company, in this case is a government.
In this view, common stock issuance (that pays no dividend) is new currency issued and preferred stock issuance = US treasury certificates that pay interest ( similar to a preferred stock dividend ).
One can argue that "the market" will not penalize a company (or government) when it raises funds via new stock issuance, IF the proceeds are perceived will be invested wisely.
But if the new stock issuance proceeds are perceived to be used foolishly than one would expect the issuing "company" will see the value of their preferred and common stock drop (as inflation decreases the value of its currency).
For example, if MMT minded US government issues new monetary "common/preferred stock" (creates new currency and issues treasury securities) and uses this purchasing power to improve US infrastructure, improve the bloated USA healthcare/financial industries or educates its people more cost effectively, then the global market could be completely happy with this use of the world's resources.
And the relative value of the US currency might be stable or even increase.
On the other hand, if the MMT minded US government issues more currency/securities and funds a destructive war, one might expect the existing global holders of the USA's currency and securities to be disappointed and push the relative value down.
Just as a corporation has to have some sort of resources (IP, customer list, inventories, market dominance, new products in development) that are valued for it to issue stock, a MMT minded government must be viewed as having resources and power.
For example, Haiti is a sovereign nation with its own currency, the Haitian gourde.
But I suspect Haiti will have a very difficult time using MMT (issuing gourde denominated securities) to improve its economy as it is perceived has having few resources and a prior history of resource squandering corruption (Papa/Baby Doc Duvalier) .
deplorado , March 7, 2019 at 2:55 pm
This is an excellent and very useful analogy, thank you!
Tomonthebeach , March 7, 2019 at 4:37 pm
I betcha that Haiti's debts are not in Gourdes but in Euros, Pounds, and Dollars. Most US debit to itself and foreign countries in our own currency. As Mosler points out, inflation often hurts our trading partners worse than it does us.
jsn , March 7, 2019 at 7:37 pm
A great analogy! And the value of a nations currency is a statement of market perception of the quality and effectiveness of its institutions.
charles 2 , March 8, 2019 at 12:37 am
I share your analogy 100% and I think this is the right way to present monetary theory (I don't want to say "modern" because it is more than a century that it works like this already). Although, I would add a twist : the government also distributes dividends in non monetary terms, by providing, say, free roads, free education or free healthcare ( In the preceding century, there were actually railroads issuing bonds that paid interest with free tickets !)
Of course, the amount of "paid in kind" dividend is similar whether one holds one dollar in the pocket or a million, so it is not popular with the wealthy class.
I think it is an important component to point out because one frequently encounters people who frequently complain that a dollar today is worth less than a dollar yesterday, but forget that between yesterday and today, the government provided services to the dollar holder regardless of him/her earning an income and paying taxes.PlutoniumKun , March 7, 2019 at 11:22 am
I was going to ask the serious question 'how did Larry Summers get to his esteemed position in the first place ?' Nothing I've ever read by or about him over the years has indicated that he is anything but a second rate bluffer with a talent for impressing other bluffers, and yet in many quarters he seems to be held in significant awe.
But mindful of the rules here about 'setting homework' I looked up his career in Wikipedia. It seems he was quite influential in developmental economics, which no doubt led to his gig in the World Bank. So someone who is considered a Harvard expert in development economics writes:
Lawrence Summers' second point about the fallacy of MMT goes like this: "Contrary to the claims of modern monetary theorists, it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once to avoid the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such an inflation tax. If this limit is exceeded, hyperinflation will result."
If someone talking in a bar said that, you'd consider him an idiot, or at best, someone who just hasn't read very much. And yet a Harvard professor can, without embarrassment, write such nonsense. And still be taken seriously. It really is unbelievable.
Mel , March 7, 2019 at 12:08 pm
The argument, shorn of the beebling and handwaving, does make some sense. A Haitian government, say, that tries to issue more gourdes (HTG) to pay off a US$ (or ECU, or anything foreign) debt is going to find out that no number of gourdes will be enough. It will have to be US$, and they will only be acquired on the terms the US$ creditor specifies. This has been true ever since independence, when the whole world insisted that the Haitians buy themselves back from France.
They can used gourdes to mobilize their own efforts and their own resources, and hope to achieve something with those.Grant , March 7, 2019 at 12:30 pm
"A Haitian government, say, that tries to issue more gourdes (HTG) to pay off a US$"
That is a government creating its own currency, which it then has to exchange for another currency. That is roughly what Germany was forced to do with after the massive WWI debts were forced on it and it went through hyperinflation. The issue is owing money in another currency. MMT economists have said again and again that countries should try to avoid, if they can, owing money in a foreign currency. Obviously, many poor countries have no option. Different than a government issuing bonds in its own currency. If the Haitian government injected its own currency into the economy, then issued bonds in its own currency as a means of reaching its central bank's targeted interest rate, and Haiti owed money in its own currency, that would be a good comparison to our situation. Summers doesn't understand (or pretends not to) the problem of bringing up hyperinflation in places like Peru and Venezuela, or the problems poor countries face in regards to external debt, versus what the situation is in the US. We are in no way comparable to those countries or situations. It's absurd, and he knows better, or he should.
In regards to the debt of developing and underdeveloped countries; the big issue is the need for a massive debt write down (among a host of other things). On that, Éric Toussaint's work is hugely important.
a different chris , March 7, 2019 at 12:58 pm
>The issue is owing money in another currency.
Even in this case -- the point is how much of your own currency can you create? The runaway debt inflation is just getting the information the hard way. And it is irreversible, unless you can send out assassins to kill your off-shore debt holders.
If you can come up with a good idea of how much you can safely print, why borrow it? If there was just some academic profession that could come up with useful answers to that question
Grant , March 7, 2019 at 2:12 pm
"Even in this case -- the point is how much of your own currency can you create? "
This has been discussed many times. The broad limit is the productive capacity of the economy. Are we at full employment, are we at full productive capacity? If the change in the money stock is proportionally larger than the value of the goods and services created with that money, then you could have inflation. Could, because inflation is more complex than that. If the government were to create a bunch of money (forget private credit creation for a second since we can't control that much right now), but that money went to rich people that hoarded it, if it was used by companies to buy up their own shares, if it was used to buy goods from other countries, if it was put in a tax shelter, among countless other things, that money wouldn't circulate around the economy and wouldn't cause much inflation. It is possible for the government to create lots of money and for deflation to set it. Happened after the crash in 1929, that was Friedman's argument as to why the Great Depression happened. He said that even though the Fed was creating lots of money, the economy was contracting at a greater rate and so in real terms the money supply was shrinking. Steve Keen responded to that and showed the problems with that argument, but this dynamic is well known. Private banks creating credit money are a part of this and the crash in 1929 too. After the crash in 2007/2008, it is pretty well established that while the government did create a lot of money, it didn't create enough and it didn't channel to the parts of the economy that could have led to a recovery for working people. So, not only how much money is created, but where that money goes in the economy, whether or not more stuff can be produced, expectations of the future, among other things, will determine inflation.
"If you can come up with a good idea of how much you can safely print, why borrow it? If there was just some academic profession that could come up with useful answers to that question "
Not trying to be rude, but have you actually read MMT literature? Cause all this stuff is addressed. We don't borrow money in the way you think. The government, the US government, doesn't need to borrow or tax in order to spend. The particular way we have chosen to create money was developed decades ago, when we were on the gold standard and had either the value of dollars fixed to an ounce of gold, or later all currencies fixed to the dollar which could be exchanged in a given amount for gold. We aren't on gold anymore. We could just have the government spend the money into the economy and use taxes to manage inflation. We don't have to issue bonds, and Wray I believe has said that states that have control over their own currencies shouldn't issue bonds in this way anymore. But those bonds come with no risk at all (the government will not default on the bonds unless forced to by politicians) and they accrue interest, so investors like them, especially when there is uncertainty. But we don't have to issue bonds AFTER the government spends to manage inflation. My understanding is that the Fed is the buyer of last resort on the secondary market for bonds, and those that take part in bond auctions are required to actually bid. I don't see why investors would all of a sudden not like US bonds (it would have to be something with geopolitical implications) but even if they did, the situations could be dealt with, and again, we don't need to even issue bonds in order to spend anyway. That is a radically different situation than Haiti owing money in another currency and being massively in debt to other countries in other currencies, with little ability to export value added goods that have strong terms of trade. Read up on the amount of debt owed by Haiti to France since the Haitian revolution, and the amount of debt paid but still owed by developing and underdeveloped countries in the post-WWII era. You think Summers cares? How in the world is that comparable to the US in 2019? It is ridiculous, and Summers knows it.
Great response!
ChrisPacific , March 7, 2019 at 3:24 pm
That is true and it's one of the key factors that can lead to hyperinflation. However, Summers isn't talking about that scenario. Nothing in his argument mentions foreign currency denominated debt. He's simply claiming that there is some upper limit on deficit spending beyond which the economy will automatically tip over into hyperinflation. I'd love to see him point out one instance in history where that's happened without external factors like foreign currency debt playing a role. The closest thing I can think of is credit bubbles, but those are self-correcting in the long run and can't spiral out of control like hyperinflation.
urblintz , March 7, 2019 at 2:07 pm
He was brought into politics by wait for it. Ronald Reagan.
"Summers was on the staff of the Council of Economic Advisers under President Reagan in 1982–1983." https://en.wikipedia.org/wiki/Lawrence_Summers#Public_official
And most people still don't know how he helped plunder post-Soviet Russia and the real scandal he survived at Harvard.
WheresOurTeddy , March 7, 2019 at 2:12 pm
he came in with the armada of economic pirates that was 1981 and has been looting ever since
Yves Smith Post author , March 7, 2019 at 4:14 pm
He has two uncles each of whom was a Nobel Prize winners: Paul Samuelson and Ken Arrow. Summers was to the economic manor born.
PlutoniumKun , March 7, 2019 at 6:01 pm
Wow, I'd no idea of that. Whatever about Samuelson (yes, I suffered through his textbook), Arrow did some very interesting and incisive work. I guess Summers was, as the Vietnamese would say 'second rice crop'.
charles 2 , March 8, 2019 at 12:50 am
'how did Larry Summers get to his esteemed position in the first place?'
Larry Summers became a famous economist like Donald Trump became a famous property developer : through family
"I remember the fall night in 1972, after Kenneth was awarded the Nobel Prize. The other American Nobel Prize winner at that moment, Paul Samuelson, also my uncle, hosted a party for Kenneth and the Cambridge economics community. I was a sophomore economics major at MIT, so I was hardly appropriate company for such an august gathering, but I was a little unique in being related to both the host and the honoree, so I was invited and I participated as best I could in the conversation."
timbers , March 7, 2019 at 11:39 am
Reminds me a scene in John Carpenter's Christine: "There's no smoking in this garage!" the owner says having gotten up from a card game where all his buddies are sitting around a table waiting for him to rejoin them, as they all smoke." "Sir, those men over there are smoking. You better them them to stop."
Jerry B , March 7, 2019 at 12:02 pm
Here is an article discussing the recent dust up on MMT:
https://www.forbes.com/sites/johntharvey/2019/03/05/mmt-sense-or-nonsense/
From the article a quote from Keynes:
"The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds."
And this from the author of the article:
"Those prominent economists aren't even so much rejecting MMT as holding tight to their own orthodox views. This is not necessarily on purpose, but it's extremely difficult for anyone to make a paradigm shift. MMT, aka macroeconomics done properly, is, as Keynes says, "extremely simple and should be obvious." The problem we have here is the difficulty in escaping from antiquated notions of macro modeling (Krugman), inflation (Summers), and debt financing (Rogoff)."
I think one of the problems we have in this country and the world is that what we think of as the mainstream educational model is actually socialization, indoctrination, brainwashing, and or ideological training. And then "jobs" are based on how well you bought in to that brainwashing.
Various education reformers over the past decades such as Ivan Illich and John Taylor Gatto have mentioned similar critiques of education in the US and the world in that our educational system does not foster problem solving and critical thinking.
It is my belief that our educational system creates a type of false self in people. In order to get the "right" answers and do well on tests, etc, you have to compromise your truth, your experience, and your true self and allow yourself to be programmed in the particular models of your profession.
Maybe in Summers, Hillary, and Trump's case, as they have gotten older that "programming memory/false self" is starting to become fractured due to cognitive decline, physical issues, stress, fatigue, etc. and as they desperately try to regurgitate their brainwashing it is coming out in an incoherent mess.
As Summers is only 64, before Yves jumps on me for equating cognitive decline with being older or in one's 60's I think it is specific to each individual. I just turned 60 and my brain is as sharp as ever, it is my body that is slowing the train down!!
To illustrate my point, a while back I read Anthony Atkinson's book, Inequality: What Can Be Done? He mentions in the book that Greg Mankiw's Principle of Micro/Macro economics textbooks have very little on the subject of inequality. How could a mainstream textbook on economics not have a significant portion on inequality?? IMO because in Mankiw's case inequality does not fit his ideology.
NC has a way of posting articles the same day that can be connected. I think this post can be related to the " Is a Harvard MBA Bad for You?" post. The MBA becomes brainwashing. Instead of trying to solve a problem MBA'ers and other professions try to fit the ideology of what they were taught in school to the problem.
To use an analogy: there are usually multiple routes to get from one town to the other. It does not always have to be the "main road". Sometimes the main road is not always the fastest, shortest, etc. And sometimes by taking the same road all the time, one's perspective becomes narrow and hinders thinking outside of the box.
To borrow Henry Ford's quote: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
After decades of allowing ourselves to be brainwashed, I think we are starting to, as J.D. Alt mentions above, "question the scripts" and are finding them to be a house of cards.
Susan the Other , March 7, 2019 at 2:32 pm
Well you are just a kid. I'm 72 and I think I'm a family blogging genius but it could be just the first symptom. Whatever I'm going to tell you guys what I think about this stuff until I get politely censored. I never studied economics – but I studied languages until words were falling out of my ears. And in my lexicon Larry doesn't even have the integrity of an idiot. Sometimes an idiot is spot on. Larry is a deceptive, self-serving power tripper dedicated to a time gone by and never to return. Too bad.
Jerry B , March 7, 2019 at 3:27 pm
Thanks Susan! Recently I went to my doctor and he asked me how I was feeling. I said physiological (my term for non-skeletal) I am 40. Structurally (arthritis, herniated discs, etc. etc.) I feel like I am 70!
===but I studied languages until words were falling out of my ears===
I have always had an intuitive sense for language. Verbal and non verbal language. The words used, tone, inflections, etc. Andrew Carnegie once said that the older he became the less he paid attention to what people said and the more he paid attention to their behavior. And I think that is partly true but language is important.
And as you mention language can be used to convey power. Pierre Bourdieu wrote Language and Symbolic Power which I have been wanting to read. I have also skimmed through some of Michel Foucault's work on discourse analysis.
Also I have read some of Kenneth Burke's work such as A Grammar of Motive's and A Rhetoric of Motives. After reading Burke's books I became more curious about people's motives behind their language and behavior, and also the idea of rhetoric. IMO Obama is a master at rhetoric and hence could fool a lot of people, while Trump sucks at it.
If you have not done so already I suggest looking up the Logical Fallacies links on NC's policies page. I believe a lot of language uses for power are in snowing the public in using arguments or propaganda that contain logical fallacies and heuristics. I have learned a lot in examining what people say and their arguments from NC.
Grant , March 7, 2019 at 12:18 pm
Yeah, I found what he said to be absolutely absurd. He seems to believe that MMT describes something we might do, as opposed to explaining how things are, at least in countries like the US. If he can't understand, or pretends to not understand, the difference between a country owing money in a foreign currency versus issuing bonds in a country's own currency, and the actual role of bonds in the US system or how money is actually created, then he isn't trying. Cause, whatever we want to say about Summers and all he represents, he isn't a stupid man. I haven't seen a single critique of MMT from the likes of Krugman or Summers that demonstrates that they understand the thing they think they are critiquing, or that they understand how things actually work. In response to MMT, they either respond with some models that they were taught that aren't based in reality, or they just lie about MMT. It is the economic version of people like Pelosi lying about single payer in the political sphere using ridiculous logic.
That, to me, is frightening, given how much power he has and who he has been hired to give advice to. People like Summers seem to freak out, really when you look at it, by the fact that we are questioning a fantasy account of how things are. They want to continue to make policies on the assumption that things are in reality what they say they are in their models, and there is a huge gap between the assumptions in their models and reality. If he were to acknowledge the insights from MMT about how things work, many of the excuses those in power have for doing nothing as the country falls apart would crumble, and those doing nothing are then more directly responsible for the impact of their policies. Once you realize that they are not investing in communities being neglected by private interests, they aren't investing in things needed to deal with the environmental crisis, they aren't helping to fund programs to get people healthcare or things like clean water (communities like Flint say hello) because they are paid by interests to do those things, and for ideological and class reasons, they can no longer pretend that the government "can't afford" those things. The debate switches to a place they don't want to be in, and they are then more responsible for the decisions they make. It is no longer about circumstances forcing themselves on these worthless politicians.
skippy , March 7, 2019 at 1:26 pm
Larry Summer: We Print Our Own Money
Published on Apr 3, 2014
https://www.youtube.com/watch?v=vuqQ3FZuSUs
I also think some need to observe that Keynes was not a Keynesian in the manner that mainstream use the IS-LM. One is the use of econometrics and the other is the IS-LM was a – starting point – of observation that needed more fleshing out and not some "economic law [tm] carried down the mount.
Would additionally point out good old Ralph Musgrave over at TJN proclaiming his long support for MMT with caveats, sadly anyone with with a functional memory would know key MMT'ers stance with Musgrave does not support those claims.
PS. great start to the day 50kg black German Sheppard just bound up on the bed – all wet – and wanted to share his eagerness for the day .
Gary Gray , March 7, 2019 at 3:36 pm
Keynes believed in governments planning more investment, especially during down times. This is the blunder modern day "sheep" don't understand. It isn't deficits that matter, but pushing the investment into usage/production. Deficits like we have now are nothing more than public debt underwriting private debt expansion via financial engineering. Of course market statists would hate the government with a bigger % of total investment, as they would lose control of the economic system and bow to the will of another.
Its amazing how dopamine release and other "feel good" consumption based games and circuses so rules the people. All they live for is the fix. The bourgeois sells it them as "their fix", "their ownership" of said fix while they rake in profits and destroy the environment. Truly like the Roman end times. No wonder the Christians are so worried. They see themselves replaced like the old rituals and traditions that proceeded it.
WestcoastDeplorable , March 7, 2019 at 1:45 pm
Yves, I'm not a MMT fan, but you're spot-on about Summers. Didn't he lose the Harvard Endowment over $1 Billion with his "sage management"? He's an idiot.
skippy , March 7, 2019 at 2:28 pm
One would think after the Chicago boys foray with Born and its after math people would question the use of such people as PR tools – well must be running dry.
Suggest you look into the groundings of MMT and not emotive processes – see link above. Keynes started a process to refute orthodox thinking, seems some post morte folded parts [tm] into orthodox thinking so they could own – manage that perspective. Hence when needed mainstream will utilize Keynes to say money is not a problem and then completely reverse azimuth and say Keynes said money is a problem ..
Can't wait till they take Marx out of context to support some elitist social views ..
Grant , March 7, 2019 at 3:03 pm
I am curious, just want to know. When you say you aren't a fan of MMT, what is the reason? I am interested in good critiques of its insights, just hard to come by, since it does seem to describe present really pretty well.
Adam1 , March 7, 2019 at 2:25 pm
As with most "serious economists" he's really an overpaid fraud. The man professes to understand government deficits, yet he has no idea how the accounting works.
From Warren Mosler
"Several years ago I had a meeting with Senator Tom Daschle and then Asst. Treasury Secretary Lawrence Summers. I had been discussing these innocent frauds with the Senator, and explaining how they were working against the well being of those who voted for him. So he set up this meeting with the Asst. Treasury Secretary who was also a former Harvard economics professor and had two uncles who had won Nobel prizes in economics, to get his response and hopefully confirm what I was saying.I opened with a question: "Larry, what's wrong with the budget deficit?"
To which he replied: "It takes away savings that could be used for investment".
To which I replied: "No it doesn't, all Treasury securities do is offset operating factors at the Fed. It has nothing to do with savings and investment".
To which he replied: "Well, I really don't understand reserve accounting so I can't discuss it at that level".
Senator Daschle was looking at all this in disbelief. The Harvard professor of economics Asst. Treasury Secretary Lawrence Summers didn't understand reserve accounting? Sad but true."
Susan the Other , March 7, 2019 at 3:06 pm
Note to Larry, please follow this logic: Money is Fiat; Fiat is cooperation; Cooperation is fiscal control; and fiscal control is civilization. Nowhere in this chain of thought does debt; interest; austerity; or any of your other little techniques even exist. Those bizarre ideas exist in more primitive thinking about power and slavery and savage exploitation. You know the routine.
Gary Gray , March 7, 2019 at 3:19 pm
Maybe, but debt expansion is debt expansion. Globally debt exhaustion looks to have been reached and we are at the top of the mountain. We are at the first stage, the next stage is what triggers the recession. The last stage, the Minsky moment.
Summers is a cluck, but a useful one in this case. The move from a mixed economy to financial engineering is very addictive to the "people". Moving back to a mixed economy won't be all giggles for everybody as consumption is naturally cut.
Like all junkies, the detox won't be easy and in some cases, fatal.
Susan the Other , March 8, 2019 at 10:09 am
Yes, it is what is so frightening about our current breakdown. Debt is the whole system. It was necessary to maintain that system. But there's no reason why debt can't be put in what banksters call a "bad bank" and just let it run off the books. It can all be done in some resolution that forgives some and allows some to linger without interfering in the economy anymore. There will always be private debt, so caveat friends and neighbors. But there's no reason to suffer an impossible debt burden as a sovereign nation. And from here on in we should not buy anything unless it can be purchased in US dollars/treasuries. The debt to ourselves doesn't matter. The thing that matters is how we spend our money, do we waste time on bad projects or do we create a more valuable civilization with good ones? Debt is just a monkeywrench, useful to gamblers and middlemen. We could configure a completely different economics with very little pain if we put our minds to it.
Samuel Conner , March 7, 2019 at 4:45 pm
I find it profoundly encouraging that it seems that the best that the best credentialed opponents of MMT can do is what is described here.
They aren't ridiculing MMT; they are embarrassing themselves.
KLG , March 7, 2019 at 5:16 pm
Another good link to Larry Summers, Serious Economist. I remembered this passage from Herman Daly's book, and the magic of DuckDuckGo found this. Long but worth the few minutes. NB, I don't know anything about this blogger:
https://sallywengrover.wordpress.com/tag/herman-daly/Carey , March 7, 2019 at 7:16 pm
Yes, that was a good link. Bookmarked that site.
The Rev Kev , March 7, 2019 at 7:32 pm
Not much love for Larry Summers here – and rightly so. I remember reading a conversation that he was in where he explained how things worked. I'll see if I can summarize it-
Larry Summers is a serious person.
Important people listen to serious people.
This is how serious people express power – by having important people listen to them.
Golden rule is that serious people never criticize each other in public – ever.I'm sure that people here can pick out the flaw in this arrangement – as in Garbage In, Garbage Out as far as important people are concerned and the information & opinions that they receive.
KLG , March 7, 2019 at 9:57 pm
I saw what you did there.
charles 2 , March 8, 2019 at 1:07 am
Seriously, what would you expect from a person who writes this at the first paragraph for his biography (emphasis mine) :
"Dr. Summers' tenure at the U.S. Treasury coincided with the longest period of sustained economic growth in U.S. history. He is the only Treasury Secretary in the last half century to have left office with the national budget in surplus . Dr. Summers has played a key role in addressing every major financial crisis for the last two decades."Change "addressing" by "participating in the genesis of", and you are quite close to the truth
Susan the Other , March 8, 2019 at 10:19 am
Mmmm, and all that treasury surplus was accrued by Larry's Austerity which exponentiated the private debt and turned into the 2008 tsunami. Heck of a job, Larry.
Mike Barry , March 8, 2019 at 7:14 am
Larry Summers, a Serious Economist
"You cannot be serious." -- John Mcenroe
Stillfeelinthebern , March 8, 2019 at 9:30 pm
"Larry Summers, like Hillary Clinton, does not seem willing to get the message that it would behoove him to retreat from public life."
Love this sentence!
Fazal Majid , March 9, 2019 at 12:11 am
Larry Summers is useful as a canary. The day Obama appointed him as an adviser (before his inauguration) was the day I understood Obama would do diddly squat about fixing the root causes of the Great Recession.
The part I don't understand is how he gained his prominence, other than literal nepotism. You'd think the fact he lost Harvard's endowment a cool billion would have killed his career given how prominent Harvard grads are in the US' power structure.
Sound of the Suburbs , March 9, 2019 at 3:50 am
2008 was the wakeup call global policymakers slept through.
"We cannot solve our problems with the same thinking we used when we created them." Albert Einstein
This is exactly what we've been trying to do since 2008.
Our policymakers thought this was a "black swan", and if your economics doesn't consider debt it is.
One question led me to the answer. "How does money get destroyed in the system?"
This is what happened, how did it happen?
It can't happen if banks are financial intermediaries as our policymaker's believe.
Other people have been looking into this and so there is a lot of work that has already been done to help you get to the answer.
The central bankers later confirmed how money gets destroyed in the system.
We were flying blind during globalisation and policymakers didn't understand the monetary system.
The FT revealed the Chinese were undertaking a major study of the West.
I think they must have worked out things are fundamentally wrong as they have made all the classic mistakes everyone else has made since 2008.
They have already worked out inflated asset prices and the private debt-to-GDP ratio are indicators of coming financial crises and these were the indicators that showed 1929 and 2008 were coming.
By the time they understood what was going on the Minsky Moment was dead ahead, and they could no longer use the debt fuelled growth model they had used before.
When US policymakers understand the monetary system they may be able to make some valid comments.
|
|
|
Mar 04, 2019 | www.unz.com
MEFOBILLS , says: February 18, 2019 at 4:26 pm GMT
@jeff stryker Reality much?AriusArmenian , says: February 18, 2019 at 5:14 pm GMTRussia just passed up the U.S. in grain exports. Their economy in real terms grows year on year. Russia has more natural wealth available to exploit than USA that includes lands rich in minerals, timber, water, etc.
With regards to traitorous fifth column atlantacists and oligarchy, Russia's shock therapy (induced by the Harvard Boys) in the 90's helped Russian's figure out who the real enemy is. Putin has marginalized most of these ((Oligarchs)), and they longer are allowed to influence politics. Many have also been stripped of their ill gotten gains, for example the Rothschild gambit to grab Yukos and to own Russia was thwarted. Dollar debts were paid off, etc.
Russia could go further in their symphony of church and state, and copy Justinian (Byzyantine empire) and prevent our (((friends))) from teaching in schools,bein control of money, or in government.
With regards to China, they would be not be anywhere near where they are today if the West had not actively transferred their patrimony in the form of transplanted industry and knowledge.
China is only temporarily dependent on export of goods via their Eastern seaboard, but as soon as belt and road opens up, she will pivot further toward Eurasia. If the U.S. factories withdrew from China tomorrow, China already has our "knowledge" and will find markets in Eurasia and raw materials in Africa, etc.
People need to stop whistling past the graveyard.
The Atlantics strategy has run its course, internal development of U.S. and linking up with belt and road would be in America's best future interests. But, to do that requires first acknowledging that money's true nature is law, and not private bank credit. Further, the U.S. is being used as whore of Babylon, where her money is "Federal Reserve Notes" and are international in character. The U.S is not sovereign. Deep state globalism does not recognize national boundaries, or sovereignty.
That US elites that are split on who to go after first compromised by going after both Russia and China at the same time is a definition of insanity. The US doesn't have a chance in hell of subduing or defeating the Russia/China alliance. The US is already checkmated. The more it goes after some big win the worse will be its defeat.Cratylus , says: February 18, 2019 at 5:56 pm GMTSo the question (for me) is not which side will win, the question is the scenario of the decline of the US Empire. Someone here mentioned the EU turning East. At some point the EU will decide that staying a US vassal is suicide and it will turn East. When that happens then the virus of US insanity will turn inwards into itself.
The US has recently focused on South America by installing several fascist regimes and is now trying to get Venezuela. But the US backed regimes are laying the groundwork for the next wave of revolution soon to come. Wherever I look the US is its own worst enemy. The big question is how much suffering before it ends.
Anon [424] Disclaimer , says: February 18, 2019 at 6:24 pm GMT... ... ...
Huawei now sells more cell phones worldwide than Apple ( https://gearburn.com/2018/08/huawei-smartphone-sales-2018/ ). And Huawei does this even though it is effectively excluded from the US market (You cannot find it in stores) whereas Apple has unfettered access to the enormous Chinese market. You find Huawei everywhere -- from Italy to Tanzania. How would Apple fare if China stopped purchases of its products? Not so well I am afraid.
Usa is at war against everyone , from China to Latinamerica , from Europe to India , from the islamic world to Africa . Usa is even at war against its own citizens , at least against its best citizens .wayfarer , says: February 18, 2019 at 6:55 pm GMTChina's "Petro-Yuan": The End of the U.S. Dollar Hegemony?WorkingClass , says: February 18, 2019 at 7:09 pm GMTWhen we speak of the culture war or the war on drugs or the war between the sexes or a trade war we are misusing the word war.AnonFromTN , says: February 18, 2019 at 9:04 pm GMTWar with China means exactly shooting and bombing and killing Chinese and American people. Expanding the meaning of the word only makes it meaningless.
We are NOT already at war with China.
@joe webb Russia and China are certainly not natural allies. However, deranged international banditry of the US (called foreign policy in the DC bubble) literally forced them to ally against a common threat: dying demented Empire.Anonymous [375] Disclaimer , says: February 18, 2019 at 9:34 pm GMTAs you call Chinese "Chinks", I suggest you stop using everything made in China, including your clothes, footwear, tools, the light bulbs in your house, etc. Then, using your likely made in China computer and certainly made in China mouse, come back and tell us how great your life has become. Or you can stick to your principles of not using China-made stuff, write a message on a piece of paper (warning: make sure that neither the paper nor the pen is made in China), put it into a bottle, and throw it in the ocean. Be patient, and in a few centuries you might get an answer.
@joe webb Russia is currently trying to get China to ally against the West:peter mcloughlin , says: February 19, 2019 at 1:55 pm GMT" Russia to China: Together we can rule the world "
https://www.politico.eu/blogs/the-coming-wars/2019/02/russia-china-alliance-rule-the-world/
In the halls of the Kremlin these days, it's all about China -- and whether or not Moscow can convince Beijing to form an alliance against the West.
Russia's obsession with a potential alliance with China was already obvious at the Valdai Discussion Club, an annual gathering of Russia's biggest foreign policy minds, in 2017.
At their next meeting, late last year, the idea seemed to move from the speculative to something Russia wants to realize. And soon
Seen from Moscow, there is no resistance left to a new alliance led by China. And now that Washington has imposed tariffs on Chinese exports, Russia hopes China will finally understand that its problem is Washington, not Moscow.
In the past, the possibility of an alliance between the two countries had been hampered by China's reluctance to jeopardize its relations with the U.S. But now that it has already become a target, perhaps it will grow bolder. Every speaker at Valdai tried to push China in that direction.
Where a war begins -- or ends -- can be hard to define. Michael Klare is right, 'War' and 'peace' are not 'polar opposites'. We often look at wars in chronological abstraction: the First World War started on the 28th July 1914. Or did it only become a global war one week later when Great Britain declared war on Germany? The causes can be of long duration. The decline of the Ottoman Empire, for which the other Great Powers were positioning themselves to benefit, might have begun as far back as 1683 when the Turks were defeated at the Battle of Vienna. It ultimately led to the events of 1914.Great power rivalry has always led to wars; in the last hundred years world wars. Graham Allison wrote that the US can 'avoid catastrophic war with China while protecting and advancing American national interests' if it follows the lessons of the Cold War. History shows that wars are caused by the clash of interests, that's always at some else's expense. When core interests collide there is no alternative to war -- however destructive.
|
|
|
Feb 22, 2019 | www.unz.com
MEFOBILLS , says: February 21, 2019 at 9:28 pm GMT
@TKK https://www.telegraph.co.uk/news/worldnews/northamerica/usa/10769041/The-US-is-an-oligarchy-study-concludes.htmlThe U.S. is an Oligarchy.
Western Oligarchs raped Russia in the 90's. OK, most of them were Jews – but still Western. The (((harvard))) boys foisted dollar debts on Russia, and then converted Russia to an extraction economy. Putin cleverly taxed the Oligarchs and prevented them from further predations.
No country can survive if it has an internal hostile elite. Nobody here can claim that Russia's government is hostile to its people. A fair claim can be made that the "international" elite that infest America IS HOSTILE. Why would you immigrate a replacement population if not hostile? Why would you export your industry if not hostile?
You don't dig out and convert your economy to first world standards overnight.
So, the trend lines are clear. The West and U.S. is a finance oligarchy in decline, while Russia is on a ascendant path. These lines will cross over at some point in near future. One could even squint and say that Russia is no longer an Oligarchy of special interests, and is moving into Byzantium mode e.g. symphony of Church and State. Many Russian thinkers are projecting another 40 years or so to consolidate the gains.
|
|
|
Even more alarming is Bugajski's argument that the goal should not be self-determination for breakaway Russian territories, but the annexing of these lands to other countries . "Some regions could join countries such as Finland, Ukraine, China and Japan, from whom Moscow has forcefully appropriated territories in the past."Jan 20, 2019 | www.zerohedge.com
Like many contemporary cold warriors, Bugajski toggles back and forth between overhyping Russia's might and its weaknesses, notably a lack of economic dynamism and a rise in ethnic and regional fragmentation. But his primary argument is unambiguous: That the West should actively stoke longstanding regional and ethnic tensions with the ultimate aim of a dissolution of the Russian Federation, which Bugajski dismisses as an "imperial construct."
It is, needless to say, impossible to imagine anything like this happening without sparking a series of conflicts that could mirror the Yugoslav Wars. Except in this version the US would directly culpable in the ignition of the hostilities, and in range of 6,800 Serbian nuclear warheads.
So who is Janusz Bugajski, and who is he speaking for?
The author bio on the Hill's piece identifies him as a senior fellow at the Center for European Policy Analysis, a Washington, D.C. think-tank. But CEPA is no ordinary talk shop: Instead of the usual foundations and well-heeled individuals, its financial backers seem to be mostly arms of the US government, including the Department of State, the Department of Defense, the US Mission to NATO, the US-government-sponsored National Endowment for Democracy, as well as as veritable who's who of defense contractors, including Raytheon, Bell Helicopter, BAE Systems, Lockheed Martin and Textron. Meanwhile, Bugajski chairs the South-Central Europe area studies program at the Foreign Service Institute of the US Department of State.
To put it in perspective, it is akin to a Russian with deep ties to the Kremlin and arms-makers arguing that the Kremlin needed to find ways to break up the United States and, if possible, have these breakaway regions absorbed by Mexico and Canada. (A scenario which alas is not as far-fetched as it might have been a few years ago; many thousands in California now openly talk of a "Calexit," and many more in Mexico of a reconquista .)
green dragon , 2 hours ago link
CatInTheHat , 3 hours ago linkThe breakup of the USSR was planned also. It was followed by the formation of oligarchs, IMF loans, and asset stripping. The economic advice and help Russia received from the west almost accomplished the goal of breaking up Russia.
Russia is well aware that war with NATO cannot be avoided in the long run. One only has to talk to Russians to see that they understand they are in a Cold war that they have to survive. From their view they did not seek this confrontation. They truly thought they would be embraced by the West after the fall and a new relationship benefiting both sides could have emerged. So now Russia has to turn to China and prepare for a future war within a decade with NATO!
August , 1 hour ago linkDisgusting projection of US imperialism. The elite never forgave Putin for throwing US Rothschild elites out of Russia so they could no longer plunder Russias extensive wealth under Yeltsin..
Let's see what happens when neocunts start that hot war, how Americans then feel about Russia
We truly have dumbfucks in this country who love the thought of other as enemy other than THEMSELVES. They never ONCE consider that in demonizing another countries leader, they are demonizing a whole nation of peoples too. I wonder how Americans would feel if constant demonizing and threats coming their way, with also say regime change in Mexico to provoke them?
US neocons are psychopaths that care nothing for Americans. What they do to others in regime change they will do to us. Oh, wait. They already have #9/11
Fluff The Cat , 4 hours ago linkPoles actively pushing for the dismembering of Russia have been around for a long time.
CatInTheHat , 3 hours ago linkPublished in the Hill under the dispassionate title "Managing Russia's dissolution," author Janusz Bugajski makes the case that the West should not only seek to contain "Moscow's imperial ambitions" but to actively seek the dismemberment of Russia as a whole.
If that is the intended goal then wouldn't it be accurate to state that America, or at least its government, has imperial ambitions?
The rationale for dissolution should be logically framed: In order to survive, Russia needs a federal democracy and a robust economy; with no democratization on the horizon and economic conditions deteriorating, the federal structure will become increasingly ungovernable...
Russia already tried "democracy" and the end result spelled disaster for their country. Minorities were put on a pedestal while their economy was in shambles, all the while the oligarchs, who were mostly Jewish, made a fortune plundering their natural resources. Sound familiar?
Some regions could join countries such as Finland, Ukraine, China and Japan, from whom Moscow has forcefully appropriated territories in the past."
The hypocrisy in this statement is breathless. Is America going to return Alaska to Russia? Allow Hawaii to once again be an autonomous entity? Cease the illegal occupation of countries throughout the Middle East? Remove their Neo-Nazi stooges from Ukraine?
It is, needless to say, impossible to imagine anything like this happening without sparking a series of conflicts that could mirror the Yugoslav Wars. Except in this version the US would directly culpable in the ignition of the hostilities, and in range of 6,800 Serbian nuclear warheads.
The idea seems to be to stoke regional tensions in order to provoke Russia and start a conflict where the surrounding countries are put on the front lines while being provided with logistics from the outside, meaning the US. Washington could then play up the plausible deniability angle, even while technology from Lockheed Martin, Raytheon and other Western contractors is primarily being used against the Russians.
Russia is not a direct threat to Western nations, only to their (((governments))), because during any attempted implementation of a JWO (as in the EU for example), Russia will serve as a reminder to all Western peoples - especially white people - as to what their nations once were: independent, sovereign and self-determined. Russia prevented ISISrael from taking over Syria, thwarted their Oded Yinon plan and threw out their oligarchs, so World Judaism is using America as their bludgeon against the Russian Federation while preventing us from forming an alliance.
back to basics , 5 hours ago linkBrowder a ******* fraud who owes Russia hundreds of millions in back taxes.
And along with **** Cardin, DEMOCRAT, helped to fraudulently create the Magnistky Act
6 hours ago Bug-aj-ski - neocon shrill writing for and paid by the MIC it looks like from the sponsors of this think tank74 years after Nazi Germany miscalculated Russian resolve some idiot dreams of carving Russia up like it's a Thanksgiving turkey and some people actually take him seriously. Yeah, good luck with that.
let;s have a look see at their website
https://www.cepa.org/international-advisory-council - more neocons
oh yah Brzezinski - deceased tho - oops -
Albright - not dead yet
https://www.cepa.org/experts - and more "expert" neocons
https://www.cepa.org/strategy-and-statecraft
"Cultivating new sources of competitive advantage for U.S. strategy."
no list of sponsors tho I can see from the website - real MIC platform it sounds like from the article
6 hours ago Yep, it's a Zbigniew Brzezinski memorial. The money seems to come mostly from the MIC and the usual Cold War think tanks, like the Harry and Lynde Bradley Foundation. 5 hours ago These necons need to remember that chess is the national passtime of Russians, while making mudpies is the what they do in the West. These "think-tanks" are very childish. 3 hours ago 9 hours ago here's where some of it started/got turbocharged:
https://www.lrb.co.uk/v41/n02/seymour-m-hersh/the-vice-presidents-men LA_Goldbug 10 hours ago The only way I can understand this twat is to think that he is just earning his shekels. He knows what the Party Line is in DC requires and is writing accordingly. I just checked a bit of his BS and this one is definitely written for the uninformed or deeply indoctrinated Western sheep.
"Taking Stock of Ukraine's Achievements Amidst Russia's Aggression
Five years ago, the Ukrainian people staged a peaceful "revolution of dignity" against a corrupt regime sponsored by the Kremlin. They stood firm even under gunfire and it was the discredited President Viktor Yanukovych who eventually retreated and took refuge in Russia. With Moscow engaging in renewed attacks against Ukraine in the Sea of Azov it is important to take stock of Ukraine's achievements since those fateful days in Kyiv's Independence Square."
You need to be brain dead to think it was peaceful !!!!
|
|
|
Jan 11, 2019 | www.unz.com
TheJester , says: Next New Comment January 11, 2019 at 11:51 am GMT
Let me be optimistic that the path to the eventual economic, national, and cultural collapse of the United States will follow the path of the Soviet Union: quick collapse followed by a slow process of national, cultural, and religious regeneration.Svigor , says: Next New Comment January 11, 2019 at 10:26 pm GMTIn this model, Trump is playing out the script written for "Yeltsin" a reckless buffoon exposing the hypocrisy and inherent weakness of Soviet ideology, economics, and culture.
Trump has done us a favor. Without Yeltsin, the Soviet Union might have lumbered for a few more decades as a decadent, geriatric patient in a hospice awaiting inevitable death. With Yeltsin's help, the end came quickly. Taking advantage of the anarchy, a conspiratorial elite consisting of a cabal of billionaires raped the Soviet Union of its wealth while there was still something left to steal and absconded to safe havens in London, New York, and Israel. This made the end of the Soviet system inevitable.
Are we already in the phase of oligarchical plunder? Yes, it's obvious.
Russia achieved its "MRGA" with Putin, backed by a core of Russian nationalists and patriots who rejected the multicultural diversity and globalism inherent in Marxist dogma. Russia is returning to its pre-1917 culture and traditions. Let's hope we can also achieve our "MAGA" by rediscovering the confident Anglosphere that created the post-WWII world.
Bye-bye feminism, multicultural diversity, and the decadent "globohomo" ideology that came to define the "Empire".
@TheJester I'll remain agnostic as to whether the US is facing financial collapse, but point out that USSR's collapse doesn't imply US has to have one (not that you intended the reference that way).USSR had a command economy, US doesn't. That said, I do think our military-industrial complex is long overdue for a collapse, having long since lost its only real justification, the Soviet threat.
Trimming the huge amount of Defense and entitlement fat we're carrying would help a lot.
|
|
|
Jan 11, 2019 | www.nakedcapitalism.com
... ... ...
In 2007 Naomi Klein got quite a bit of attention and mostly favorable comment for her book, Shock Doctrine. It promulgated that global elites used periods of crisis around the world to force damaging neoliberal policies derived from the Chicago School and Washington Consensus upon unhappy populations that suffered greatly as a result. This was "shock therapy" that was more like destructive electroshock than any sort of therapy . There is a lot of truth to this argument, and it highlighted underlying ideological arguments and outcomes.
The argument largely seems to hold for the original poster boy example in Chile with the Pinochet coup against the socialist Allende regime. A military coup replaced a democratically government. While Chile was experiencing a serious inflation, it was not in a full-blown economic collapse. The coup was supported by US leaders Nixon and Kissinger, who saw themselves preventing the emergence of pro-Soviet regime resembling Castro's Cuba. Thousands were killed, and a sweeping set of laisssez faire policies were imposed with the active participation of "Chicago Boys" associated with Milton Friedman. In fact, aside from bringing down inflation these reforms did not initially improve economic performance, even as foreign capital flowed in, especially into the copper industry, although the core of that industry remained nationalized. After several years the Chicago Boys were sent away and more moderate policies, including a reimposition of controls on foreign capital flows, the economy did grow quite rapidly. But this left a deeply unequal income distribution in place, which would largely remain the case even after Pinochet was removed from power and parliamentary democracy returned.
This scenario was argued to happen in many other nations, especially those in the former Soviet bloc as the Soviet Union disintegrated and its successor states and the former members of the Soviet bloc in the CMEA and Warsaw Pact also moved to some sort of market capitalism imposed from outside with policies funded by the IMF and following the Washington Consensus.
Although he has since expressed regret for this role in this, a key player linking what was done in several Latin American nations and what went down after 1989 in Eastern and Central Europe was Jeffrey Sachs .
Klein's discussion especially of what went down in Russia also looks pretty sound by and large, without dragging through the details, although in these cases the political shift was from dictatorships run by Communist parties dominated out of Moscow to at least somewhat more democratic governments, although not in all of the former Soviet republics such as in Central Asia and with many of these later backsliding towards more authoritarian governments later.
In Russia and in many others large numbers of people were thrown into poverty from which they have not recovered. Klein has also extended this argument to other nations, including South Africa after the end of apartheid.
|
|
|
Jan 08, 2019 | www.defenddemocracy.press
06/10/2018
06/05/2017
A conversation in the radio studio "Komsomolskaya Pravda" with the Hero of the Soviet Union, the first and the last vice-president of Russia, Alexander Rutskoi and the former head of the President's Security Service (by definition, the closest person to Yeltsin's body), Alexander Korzhakov.
Twenty-two years ago, Moscow shuddered from the tank volleys, and people all over the country clung to TV screens, on which Western TV stations broadcasted how Yeltsin's loyal troops fire at the rebel troops of the Supreme Soviet (Parlament) of Russia. The opposition of the Armed Forces and the President Yeltsin with his team, on the one hand, and Rutskoi and Khasbulatov with the deputies, on the other, ended in great blood. Incongruous with the one that spilled two years earlier, when the Emergency Committee tried to keep the USSR. This was the beginning of our conversation in the radio studio "Komsomolskaya Pravda" with the Hero of the Soviet Union, the first and the last vice-president of Russia, Alexander Vladimirovich Rutskoi and the former head of the President's Security Service (by definition, the closest person to Yeltsin's body), Alexander Vasilyevich Korzhakov.
|
|
|
Oct 04, 2018 | www.defenddemocracy.press
Declassified Clinton-Yeltsin Telcons Show U.S. Support No Matter What Embassy Cables and Oral Histories Detail Complex Conflict and U.S. Motivations Today's Russian Opposition Sees Crucial Turning Point Towards Today's Autocracy ... ... ...
Cable from White House Washington DC to American Embassy Moscow. Memorandum of Conversation: Memcon with President Boris Yeltsin of Russia, July 10, 1993, Tokyo 1993-07-16 Source: U.S. Department of State declassification M-2006-01499
This is a copy of a cable containing the memcon between Yeltsin and Clinton with a cover note from Secretary of State Warren Christopher to Strobe Talbott instructing him to review the memcon before his forthcoming meeting with Russian Deputy Foreign Minister Georgy Mamedov. In the handwritten notes he also records his impressions from the meeting. He is "struck by [ ] B[ill] C[linton]'s command of the issues [ ] his dominance in [meeting] (hard to do with Yeltsin), and "no rhetoric or posturing on either side."
This memcon is important because it shows the impressive variety of issues on which Clinton and Yeltsin had a productive exchange and agreed to cooperate: replacing COCOM with a new regime; a deal on highly enriched uranium (HEU) that Russia was going to remove from the nuclear warheads being withdrawn from Kazakhstan; Ukraine and Belarus and partly return to Ukraine as fuel for nuclear power stations and partly sell to the United States in the framework of the Megatons for Megawatts program; working with Ukraine to return the nuclear weapons to Russia; progress on CTBT; non-proliferation, and specifically limiting Russia's sales of reactors, missiles, and submarines to Iran and India; getting North Korea to the negotiating table; peacekeeping in Georgia and Nagorny Karabakh; and the withdrawal of Russian troops from the Baltics.
On the latter, Yeltsin made an official request that the U.S. side conduct an investigation of the laws in Estonia to determine if they discriminate against ethnic Russians (Christopher in his cover note recommends giving Yeltsin a proper legal response even if it is negative). The breadth of issues helps one understand that Yeltsin truly was an indispensable partner for Clinton across the range of U.S. priorities in the former Soviet Union and even globally. Only once is there a signal that Yeltsin is in a complicated place domestically. Mentioning that the Supreme Soviet has just passed a bill declaring Sevastopol a Russian city, Yeltsin says, characteristically, "Thank God no one takes the Supreme Soviet seriously!"
Memorandum of Telephone Conversation: Telcon with President Boris Yeltsin of Russian Federation. 1993-09-21 Source: U.S. Department of State declassification M-2006-01499
Clinton calls Yeltsin immediately after the Russian president makes a speech announcing his Presidential Decree 1400-dissolving the Parliament and setting the date for early elections to a new legislature and a referendum for the draft Constitution. Clinton expresses his full support for Yeltsin but also a concern about the fate of reform and democratic process in Russia. In response, Yeltsin paints a black-and-white picture of the political struggle saying that the Supreme Soviet "has totally gone out of control. It no longer supports the reform process. They have become communist." He assures his U.S. partner that "there will be no bloodshed," and that "all the democratic forces are supporting me." Clinton underscores the importance of holding the elections "in a fully democratic manner," and providing the opposition full access to free press without hindrance. Yeltsin promises to stick to democratic principles and reiterates his commitment to peaceful solutions. Clinton mentions that a $2.5 billion assistance package is being considered by Congress at the moment and the preservation of democratic order would be important for its passing. Yeltsin promises that now the "reforms will go much faster" and thanks the U.S. president for his continuous support. Document 04 Ambassador Thomas Pickering Oral History Excerpt 2007-02-19 Source: Foreign Affairs Oral History Collection, Association for Diplomatic Studies and Training, Arlington, Virginia, www.adst.org , https://adst.org/wp-content/uploads/2018/02/Pickering-Thomas-Reeve.pdf , pp. 357-362 ( 15th of December, the Ides of December 2006) and pp. 386-391 ( 19th of February 2007) . This extremely useful oral history collection includes interviews with more than 2,000 former U.S. diplomats. The interviews with Tom Pickering took place over an extended period from 2003 to 2007 after his retirement from the Foreign Service, and produced a transcript totaling 722 pages ranging from his ancestry to postings as far afield as Zanzibar and San Salvador. Pickering served as U.S. ambassador to Moscow from 1993 to 1996, among the most momentous years in Russia's post-Soviet history, and a large section of the oral history covers his time in Russia. The particular pages related to the October 1993 events are in two parts, one from pages 357 to 362 on the overall policy and the Clinton-Yeltsin relationship, and the other, his extremely detailed eyewitness account of the assault on the White House, from pages 386 to 391. Pickering recounts his strong advice to Washington that there was "no choice" other than to back Yeltsin. He says, "There are some who argue that he, Yeltsin, was illegal in his actions and preemptory in his decisions and wrong in the outcomes. I totally disagreed with that . Were Yeltsin to have failed to do what he did, there was a good chance that there would have been another effort at the top to return Russia to communism. I cannot but believe that would have resulted in greater bloodshed and a long civil conflict." (p. 362) On the possibility of a negotiated settlement, Pickering comments, "[T]here were talks back and forth, not very fruitful ones because the Russian government then was in a position of deciding whether it was going to treat with these people and deal with compromises or take back the White House. They decided that they were going to take back the White House. They had the troops and the capability of doing that."
Memorandum of Telephone Conversation: Telcon with President Boris Yeltsin of Russian Federation. 1993-10-05 Source: William J. Clinton Presidential Library declassification 2015-0782-M-1
This phone call takes place on the day after Yeltsin ordered tanks to fire on the building of the Supreme Soviet in Moscow(the "White House, the same building outside which Yeltsin had stood on a tank to reisist the hard-line coup attempt in August 1991), Clinton calls him to express support and inquire about the Russian president's plans for the upcoming elections and political settlement after the constitutional crisis. Yeltsin calls his opponents "fascist," putting all the blame on the opposition, telling Clinton that the supporters of the Parliament "brought to Moscow a gang of people from the Transdniester region, the Riga OMON-these were special forces. They had them come here, gave them machine guns and grenade launchers, and had them fire on peaceful civilians." He says he had no alternative than using force. Yeltsin expresses regret that "some people were killed," [ ] "thirty-nine people have now been killed on our side," (estimates of casualties range in the hundreds) but assures Clinton that now both the transition to democracy and market reform will move faster and he might call for early presidential elections because at the time "no real rivals to me are visible." (Vice President Rutskoy and Chairman of the Supreme Soviet Khasbulatov were in prison, the prosecutor general was forced to resign and the Constitutional Court was suspended after its Chairman declared Yeltsin's decree 1400 unconstitutional.) None of that appears to undermine Yeltsin's democratic credentials in Clinton's eyes. Clinton never asks about the loss of life among civilians and the opposition. He says just what Yeltsin wants to hear: "you did everything exactly as you had to and I congratulate you for the way you handled it." The Russian president responds: "Thank you for everything. I embrace you with all my heart."
Memorandum for the President from Anthony Lake: Clarification on Your October 5 Telephone Conversation with President Yeltsin. 1993-10-07 Source: William J. Clinton Presidential Library declassification 2015-0782-M-1
This memo from National Security Advisor Anthony Lake clarifies two items in the October 5 conversation with Yeltsin (see Document 4). When Yeltsin referred to armed persons from Riga and Moldova who came to Moscow to support the opposition, Lake points out, they were "from the elite Russian security forces stationed in Riga and Moldova," not representatives of the Moldovan or Latvian governments. The second important correction refers to the fact that Yeltsin did not answer Clinton's question about freedom of the press in the period before the scheduled December elections. Yeltsin only said that there "would be no restrictions on the elections," and his interpreter translated it as "no restrictions on the press." In fact many oppositional newspapers were banned. President Clinton writes on the memo: "OK-but it wasn't the time for me to raise the newspaper issue on the 5 th ."
Cable from American Embassy Moscow to Secretary of State: Secretary's Visit to Moscow: Domestic Political Dynamics. 1993-10-19 Source: Department of State Declassification, Date/Case ID; 6 MAR 2003 200001030
Chargé d'Affaires and future Ambassador to Russia James Collins sends Secretary Christopher a briefing cable in advance of his visit to Moscow where he is expected to meet with Yeltsin and other government officials. This is the first visit of any Western senior official to Moscow after Yeltsin's dissolution of the Parliament and the October 3-4 bloodshed in the center of Moscow. In the cable, Collins describes the pre-electoral landscape in Russia on the eve of Christopher's visit. Although 92 parties are registered for the election, that in itself does not guarantee free and fair elections.
The cable describes Yeltsin's decision to push through the new "half-baked" Constitution, which concentrates the "preponderance of authority in the hands of the chief executive." Collins points out that "even many reformers worry about establishing a new Russian democracy so heavily tilted toward presidential power." The cable describes the split within the reformist camp into "radical" and "cautious" reformers, the confusion at the regional levels regarding whether the elections would be held for regional legislatures, and the continuing ban on nationalist and right-wing parties and their newspapers.
Collins notes the personal nature of the confrontation: "Boris Yeltsin's face during his October 6 speech was proof the Russian President had cast his hardline opponents into a personal anathema." He also raises concern about the methods used by Moscow police and city government in implementing the state of emergency, such as "systematic police cleansing of non-Russian people from Central Asian and Caucasian states," and racist remarks about dark-skinned people by Moscow Mayor Yuri Luzhkov. In the end of the cable, Collins cautions that although the actual voting is likely to be fair, "the question will be the democratic content of the entire electoral process."
Cable from American Embassy Moscow to Secretary of State: Your October 21-23 Visit to Moscow-Key Foreign Policy Issues 1993-10-20 Source: U.S. Department of State. Date/Case ID: 04 MAY 2000 200000982
In the follow-up to the previous cable (Document 6), Chargé d'Affaires Collins reviews foreign policy issues Christopher is expected to cover in Moscow in his meetings with Yeltsin and Kozyrev and emphasizes that Yeltsin is looking for gestures of support from the United States. New elections are scheduled for December and Yeltsin needs all the support from the West he can get. Collins advises the secretary of state to be sensitive to Yeltsin's and Kozyrev's need for Russia to be seen domestically as a partner with whom the West consults and does not just take for granted, and he lists some controversial issues: NATO expansion, the post-Soviet space, and Ukraine.
On NATO, Collins notes that the Russians are aware that the U.S. internal debate is reaching a crucial moment about expansion and they want to be assured that the door is open to Russia, not just to East Europeans. In Collins' view, "what the Russians hope to hear from you is that NATO is not moving precipitously and that any policy NATO adopts will apply equally to them." Their "neuralgic" attitude stems from the fear that they will "end up on the wrong side of a new division of Europe." Therefore, Collins counsels Christopher to make sure the Russians know that the U.S. is actively promoting Russia's "complete reintegration into the family of Western states."
Secretary Christopher's Meeting with Foreign Minister Kozyrev: NATO, Elections, Regional Issues 1993-10-25 Source: U.S. Department of State. Date/Case ID: 11 MAR 2003 200001030
On his trip to Europe to explain the U.S. position on NATO expansion, Secretary Christopher comes to Moscow after meetings in Budapest. He and special ambassador Strobe Talbott meet with Foreign Minister Kozyrev and his deputy, Yuri Mamedov, before they visit Yeltsin at his country residence. Christopher raises concerns about the fairness of the upcoming elections with his Russian counterparts. He mentions that the United States has $12 million to contribute and is willing to send monitors or observers, which Kozyrev welcomes, saying they might help to guard against fraud by communist-leaning local authorities in rural areas where "the old kolkhoz mentality" still prevails. Christopher puts special emphasis on ensuring a free press since the order banning opposition newspapers was still not lifted. Kozyrev does not have a definitive answer to the question regarding banned newspapers and he says only six or seven political organizations will be banned from participating in the elections.
In this memo about the Kozyrev meeting, Christopher is very brief about the NATO discussion. He tells Kozyrev that the U.S. is sensitive to the Russian position and has developed a new proposal as a result: the Partnership for Peace (PFP), which would be open to all countries on an equal basis. Christopher does not directly address Kozyrev's concern about the decision regarding expansion, but, misleadingly, lets it sound as if PFP is the alternative for the time being.
The rest of the conversation deals with crucial issues on which the United States needs Russian cooperation, such as support for Eduard Shevardnadze in Georgia and the withdrawal of nuclear weapons from Ukraine.
Secretary Christopher's Meeting with President Yeltsin, 10/22/1993, Moscow 1993-10-22 Source: U.S. Department of State. Date/Case ID: 08 MAY 2000 200000982
Christopher is taken to Yeltsin's country house, Zavidovo, for a meeting that lasts only 45 minutes. Yeltsin has most likely already been briefed by Kozyrev about his conversation with the secretary of state. In the beginning of the conversation, Yeltsin reviews the events of September 21-October 4 in Moscow and expresses "special appreciation to President Clinton and Secretary Christopher for their early and very supportive backing. The Russian president talks about the upcoming elections, which he calls "the first free and fair election for the parliament since 1917," and assures Christopher that the country has calmed down after the crisis. Yeltsin praises the new Constitution that is "up to the standards of the best Western democracies," which would allow them to "end the old totalitarian regime with the power assigned to the soviets." He also welcomes the Clinton visit to Moscow planned for January 1994.
Christopher starts with strong praise for Yeltsin's handling of the constitutional crisis with the Parliament, passing on "high appreciation" and emphasizing that Clinton is "extremely supportive" of his "superb handling of the crisis." According to Christopher, Clinton "admired the restraint" that Yeltsin has practiced since September 21 and that in the end he acted in a way that "caused the least loss of life." He adds that "on Sunday October 3, the President also closely followed events and wanted to tell President Yeltsin that [ ] our thoughts were with you in Moscow all day." Christopher offers technical assistance for the election and notes that "there are already numbers of our experts here who could be helpful but we would like to assist in any way in which we could do so." Essentially, Christopher lauds Yeltsin's handling of the crisis and never raises any concerns mentioned in Collins' cable (see Document 6, above) about irregularities in the electoral process or the nature of Yeltsin's constitution.
At the end of the conversation they briefly touch on the sensitive question of NATO expansion. Christopher leaves Yeltsin with the impression that the Partnership for Peace is an alternative to expansion (see Document 8 in National Security Archive Electronic Briefing Book No. 621 [tk: Rinat, please add link]). Yeltsin is extremely pleased with everything Christopher says at the meeting. He concludes "by saying that he appreciated immensely President Clinton's early continuing and extremely generous support and that he wanted to pass on his highest esteem for the President."
Memorandum of Telephone Conversation: Telcon with President Boris Yeltsin of the Russian Federation. 1993-12-22 Source: William J. Clinton Presidential Library declassification 1015-0782-M-1
Clinton calls Yeltsin to check on the political situation after the elections and talk about his upcoming visit to Russia in January 1994. At the beginning of the conversation both presidents put the best spin on the disastrous election results where the nationalist Liberal Democratic Party of Vladimir Zhirinovsky finished with 23 percent, the Communist Party of Gennady Zyuganov with 12 percent and Yeltsin's party, Russia's Choice, headed by Yegor Gaidar, only got 15 percent. Clinton is concerned about Yeltsin's ability to continue his economic reform with the strong nationalist-communist-agrarian opposition in Parliament. Yeltsin assures him that he is committed to the reform and will be able to work with the Parliament, "especially since the working relationship is supported by a strong democratic foundation in the new constitution." He says that now "there is no room for extremism or fascism in the new parliament." At the same time, he asks the U.S. president not to invite opposition party leaders to a meeting when Clinton comes to Moscow "so as not to give them an exaggerated opinion of themselves." Clinton tells Yeltsin that they decided not to talk much about Zhirinovsky and "to play him down."
The rest of the conversation focuses on preparations for the upcoming summit with Clinton's three-part agenda: "economic assistance to support your reforms; our common effort to convince Ukraine to go non-nuclear; and our foreign policy agenda." He promises to start a "quiet study" of how to increase IMF and World Bank assistance to Russia. Yeltsin is grateful for the support and emphasizes the importance of cooperation on denuclearization of Ukraine. He enthusiastically accepts Clinton's program.
Russian Defense Minister Pavel Grachev Oral History Excerpt 2015-00-00 Source: Interview conducted by Petr Aven and Alfred Kokh and ultimately published in their book, Gaidar's Revolution: The Inside Account of the Economic Transformation of Russia (London: I. B. Tauris, 2015), pp. 297-333.
Two of Yegor Gaidar's close associates during the "second Russian revolution" of 1989-1992 went back 20 years later, after Gaidar's death, to interview 10 of the other key players in that period, including the Defense Minister Pavel Grachev (the only American interviewed was former Secretary of State James Baker). Aven and Kokh published short versions of each interview in the Russian edition of Forbes between 2010 and 2012, and longer versions in their book. In the biographical listing in the back of the book, the authors sneer at Grachev as a corrupt incompetent, while for most others listed they simply provide the dates and titles of their positions. But they give Grachev more than 30 pages of space to recount his versions of multiple controversial topics. This excerpt, titled "The Army and the Putsch of 1993," from pages 325 to 330, includes Grachev's story of his 3 a.m. discussions with Yeltsin and his security chief Korzhakov, during which "we drank a little," leading to the assault on the White House. Grachev says he personally gave the orders for a tank to fire "inert" projectiles into specific windows in the White House, after which "a fire started. It was beautiful." When Aven asks how many they killed in the assault, Grachev answers, "a lot." When Aven says, "from 200 to 400, by various estimates," Grachev responds, "many, in short."
Notes[1] The main editor of Novaya Gazeta , Sergey Kozheurov, elected for the second time in November 2017, was the founding editor of the newspaper from 1993 to 1995.
[2] Talbott, The Russia Hand: A Memoir of Presidential Diplomacy , (New York: Random House, 2002) p. 55
Published at https://nsarchive.gwu.edu/briefing-book/russia-programs/2018-10-04/yeltsin-shelled-russian-parliament-25-years-ago-us-praised-superb-handling Read also: Haley and Binomo (Trump and his People)
Read also: US complain Russians do not let them dominate the Middle East!!!
|
|
|
Feb 17, 2004 | www.harbus.org
"Russia is not a normal country," said Professor Marshall Goldman, an internationally recognized authority on Russian politics and economics, in his meeting with HBS students on February 9th. Professor Goldman of the Davis Center for Russian Studies at Harvard University came to campus to talk about his recent book "The Piratization of Russia: Russian Reform Goes Awry".
The event, hosted by the Eastern European Association, attracted significant interest from the HBS community. Surrounded by dozens of students in a packed room at Cumnock Hall, Professor Goldman shared his prospective on the past and future of the Russian reforms, and answered a number of intriguing questions. His expert opinion was sought to add academic clarity to the recent publicized debate around 'the real facts about Russia'.
In his lecture, Professor Goldman gave a critical assessment of the approach to the economic reforms taken by the Russian government after the collapse of Soviet Union. Citing the examples of Poland and China, he argued that more gradual liberalization and privatization would generate wider social benefits in a less corrupt environment.
In addition, Marshall Goldman didn't miss the opportunity to pick on 'the guys across the river', referring to Harvard Professors Andrei Shleifer and Jeffrey Sachs (now at Columbia) who consulted Russian authorities in early nineties and advocated 'shock therapy' reforms. He also quoted Shleifer's recent publication about Russia, 'A normal country'.
Professor Goldman talked at length about the genesis of the 'oligarchs', Russia's largest and most controversial businessmen. In the last few years, Russia 'delegated' 19 billionaires to the Forbes' World's Richest People list – more than Britain or France, for instance. In examining this unique Russian phenomenon, Marshall Goldman emphasized that the 'oligarchs' propelled themselves to riches after the start of perestroika in 1987. Coming from the ranks of Soviet government officials or black market dealers, these people took advantage of immature regulatory environment to build wealth, first through financial and export-import operations, and then by privatizing the country's natural resources and mass media.
Oligarchs reached the peak of their influence in the late nineties after they ventured into politics and helped re-elect Boris Yeltsin the President of Russia. Ironically, the demise of the oligarchs follows the same route but in reverse: stripped of their media assets by President Putin, they lost their political weight, and are now gradually losing control over natural resources. The recent arrest of the oil tycoon Mikhail Khodorkovsky served as an obvious indication of this trend.
In examining the current situation in Russia, Professor Goldman deplored the excesses of the 'rule of law' and the cutbacks on the democratic freedoms, primarily freedom of speech. At the same time he admitted considerable advances made by Russia in the economic area. Fuelled by high commodity prices and liberal tax reforms (with income tax at 13% flat), the Russian economy developed briskly in the last five years, posting a whopping 7% GDP increase in 2003. Although this growth remains driven more by greater resource utilization than by factor productivity, Marshall Goldman was generally positive about the prospects of Russian businesses. In answering a student's question 'Is Russia a good place to invest?', he said that most probably yes, pointing at the burgeoning consumer market, growing foreign investment and recent moves by Moody's and Standard & Poor's to raise Russian sovereign ratings to the investment grade.
In closing, Professor Goldman expressed his hope that Russia will manage to keep the current fine balance between both the liberal economic policies and sub-democratic political regime. He also invited HBS students to attend weekly academic seminars held at the Davis Center for Russian and Eurasian Studies at Harvard.
|
|
|
Feb 21, 2018 | www.moonofalabama.org
DidierF , Feb 21, 2018 2:03:08 AM | link
Sad but definitely correct. The first casualty of war is the truth. It's dead in the USA and allies. Therefore, they're at war with Russia and China. If Russia is down, China will be dealt with.V. Arnold , Feb 21, 2018 2:13:54 AM | linkThe horrible thing with the US attitude is that you do a white thing, you're attacking them and if you do a black thing, you're attacking them too. This attitude is building hostility against Russia. It's like programming a pet to be afraid of something. The western people are being programmed into hating Russia, dehumanizing her people, cutting every tie with Russia and transforming any information from Russia into life threatening propaganda. A war for our hearts is running. The US population is being coerced into believing that war against Russia is a vital necessity.
It will be a war of choice from the US "elites". Clinton announced it and the population had chosen Trump for that reason.
You're wondering why they're doing it. I suppose that their narrative is losing its grip on the western populations. They're also conscious of it. If they lose it, they'll have to face very angry mobs and face the void of their lives. Everything they did was either useless or poisonous. It means to be in a very bad spot. They're are therefore under an existential threat.
Russia proved time and again that it's possible to get out of their narrative. Remember their situation when Eltsin was reelected with the western help.
The Chicago boys were telling the Russian authorities how to run the economy and they made out of the word democrat a synonym of thief. They were in the narrative and the result was a disaster. Then, they woke up and started to clean the house. I remember the "hero" of democracy whose name was "Khodorovsky (?)". In the west he was a freedom fighter and in Russia he stole something like Rosneft. This guy and others of the same sort were described in the west as heroes, pioneers and so on. They were put back into submission to the law. The western silence about their stealing, lies and cheating is still deafening me.
It was the first Russian crime. The second one was to survive the first batch of sanctions against them (I forgot the reason of the sanctions). They not only survived they thrived. It was against the western leading economic ideology. A third crime was to push back Saakachvili and his troops with success.
The fourth was to put back into order the Tchechen. Russia was back into the world politics and history. They were not following the script written for them in Washington and Brussels. They were having a political system putting limits to the big companies. And, worst of it, it works.
Everybody in the west who can read and listen would have noticed that they are making it.
More, with RT and Sputnik giving info outside the allowed ones or asking annoying questions (western journalists lost that habit with their new formation in the schools of journalism - remember the revolution in their education was criticised and I missed why - very curious to discover why), they were exposing weaknesses of the western narrative. On the other side their narrative became so poor and so limited that any regular reader would feel bored reading the same things time and again and being asked to pay for it at a time his salary was decreased in the name of competitivity. The threat to their narrative was ready. They had to fight it.
It's becoming a crime to think outside their marks. It's becoming a crime to read outside their marks. I don't even talk about any act outside their marks. Now, it's going to be a crime of treason to them in war time.
I do feel sadness because many will die from their fear of losing their grip on our minds. I do feel sadness because they have lost and are in denial about it. I do feel sadness because those death aren't necessary. I do feel sadness because those people can't face the consequences of their actions. They don't have the necessary spine. Their lives were useless and even toxic. They could start repairing or mitigating their damages but it would need a very different worldview, a complete conversion to another meaning of life outside the immediate and maximal profit.
DidierF | Feb 21, 2018 2:03:08 AM | 46Ger , Feb 21, 2018 7:52:44 AM | linkYou have aptly described the most dangerous country on this planet. That country must not be appeased, at any cost, because it would surely end us forever...
Dan @ 4It is partially tied direct to the economy of the warmongers as trillions of dollars of new cold war slop is laying on the ground awaiting the MICC hogs. American hegemony is primarily about stealing the natural resources of helpless countries. Now in control of all the weak ones, it is time to move to the really big prize: The massive resources of Russia.
They (US and their European Lackeys) thought this was a slam dunk when Yeltsin, in his drunken stupors, was literally giving Russia to invading capitalist. Enter Putin, stopped the looting .........connect the dots.
|
|
|
Dec 29, 2018 | www.moonofalabama.org
Montreal , Dec 27, 2018 2:01:23 PM | linkbevin , Dec 27, 2018 10:21:32 AM | link
" ....The oligarchs have been destroyed in the early 00s: Gusinsky (the media oligarch), Berezovsky (the political broker oligarch), Khodorkovsky (the oil oligarch). These people were real oligarchs, i.e. they were using their wealth to control political processes through black media propaganda, having their own MPs/Ministers/Governors, etc..." @85
I'm inclined to agree. And this is why there is so much anger against Putin, in particular, in the 'west': the Russian oligarchs wield enormous power through the media which is at the service of anyone with money. Bill Browder being a prime example.
The oligarchs were the tools that the City of London and Wall St employed to plunder Russia's socialised wealth and resources.
The hate campaign against Putin, who is in many ways a very conservative economist pursuing the sort of neo-liberal policies that capitalist financiers approve of, is inexplicable unless we understand that the end game is a return to the looting that took place under the Empire's anointed, Boris Yeltsin.I don't understand the people here who write that VVPutin is in thrall to the Zionists, the Oligarchs, or that he's lining his own pocket etc etc. IMHO his strategy has always been clear and direct, since the beginning. He values first of all stability - time for Russia to rebuild herself. Secondly, he performs a clever balancing act between the competing centres of power in Russia.
His mistake, however, when he became president, was to believe quite sincerely that the West - and particularly Washington (the important one) - shared a desire for peaceful partnership with Russia. Doubts emerged in 2011 - he realised that he was being played - and the doubts became certainties in 2014, since when some fairly radical reorganisations has been taking place. Russia is - again, IMHO - now ready to take its real place in the international order.
I take great pleasure in reading and listening to his - and Sergei Lavrov's - words, at the same time regretting the low standard of our own representatives.
Many thanks to b and all of you who continue always to inform me and sometimes enchant me.
|
|
|
Jul 24, 2017 | www.nbcnews.com
As Russian lawyer Natalia Veselnitskaya tells it, she met with Donald Trump Jr. and other Trump aides in New York last summer to press her case against a widely accepted account of Russian malfeasance, one that underpins a set of sanctions against Russians.
It's a cause Veselnitskaya has been pursuing for years. So, too, has Rinat Akhmetshin, the colorful Russian-born American lobbyist she brought with her to Trump Tower.
Trump Jr., who agreed to the June 2016 meeting at the request of a Russian business associate with a promise of dirt on Hillary Clinton , has said he didn't find much to interest him in the presentation. And little wonder: The subject is a dense and tangled web, hinging on a complex case that led Congress to pass what is known as the Magnitsky Act. The law imposed sanctions on individual Russians accused of human rights violations. It has nothing to do with Clinton.
The Trump Tower meeting has become the latest flashpoint in the ongoing investigation into whether the Trump campaign coordinated with Russia's election interference . The topic of the meeting, many observers have said, is almost beside the point.
But the substance of what the pair of Russian advocates say they came to discuss has a fascinating backstory.
It's an epic international dispute -- one that has pitted the grandson of a former American Communist who made a fortune as a capitalist in Russia against a Russian leader who pines for the glory days of his country's Communist past.
In a cinematic twist, one person on the side advocated by Vladimir Putin, Veselnitskaya and Akhmetshin is a former American newspaper reporter turned investigator named Glenn Simpson. He is the same Glenn Simpson whose firm, Fusion GPS, helped craft the controversial dossier alleging that the Trump campaign colluded with Russian intelligence .
That dossier, published by Buzzfeed , made other, more salacious allegations about Trump, and FBI Director James Comey briefed the Republican about it before he took office. The dossier is not favorable to Putin and the Russian government.
Simpson's role on both sides of the Putin divide is set to be explored in a Senate Judiciary Committee hearing Wednesday examining the Justice Department's requirements for foreign lobbying disclosures.
Due to testify at the hearing is Simpson's longtime opponent in the Magnitsky dispute, William Browder, an American-born hedge-fund investor who made millions investing in post-Soviet Russia and gave up his U.S. citizenship in 1997.
Simpson's lawyer said he would defy a subpoena to appear Wednesday because he was on vacation, and that he would decline to answer questions anyway, citing his right against self-incrimination.
Browder, whose grandfather Earl led the American Communist Party, accuses Simpson of peddling falsehoods as an agent of the Russian government. The law firm Simpson worked with on the case accused Browder in court papers of perpetrating a web of lies. Both men dispute the allegations.
The Death of Sergei MagnitskyThe story begins with the November 2009 death of Sergei Magnitsky, a Russian tax accountant who was working for Browder, and who later died in prison .
Browder's account of Magnitsky's death triggered international outrage. According to Browder, Magnitsky was a lawyer who had been investigating a theft of $230 million in tax rebates paid to Browder's companies in Russia. Browder says his companies had been taken over illegally and without his knowledge by corrupt Russian officials.
Browder says Magnitsky was arrested as a reprisal by those same corrupt officials, and then was tortured and beaten to death. Browder presented documents suggesting that some officials who benefited from the alleged fraud purchased property abroad.
That account led Congress to pass the so-called Magnitsky Act in 2012, imposing sanctions on the Russian officials who were alleged to have violated Magnitsky's human rights.
The Russian government soon imposed a ban on American adoptions of Russian children, ostensibly for other reasons but done in response, many experts say, to the Magnitsky sanctions.
Forty-four Russians are currently on the Magnitsky sanctions list maintained by the U.S. Treasury Department, meaning their U.S. assets are frozen and they are not allowed to travel to the U.S.
Once a Putin supporter, Browder became one of the Russian leader's most ardent foes, spearheading a campaign to draw international attention to the Magnitsky case. He and his employees at Hermitage Capital Management presented information to governments, international bodies and major news organizations.
Browder's advocacy marks a shift from 2004, when, as one of Russia's leading foreign investors, he praised Putin so vigorously that he was labeled Putin's "chief cheerleader" by an analyst in a Washington Post article. Browder has said that Magnitsky's death spurred him to reexamine his view of Putin.
The State Department, lawmakers of both parties and the Western news media have described the Magnitsky case in a way that tracks closely with Browder's account. Browder's assertions are consistent with the West's understanding of the Putin government -- an authoritarian regime that has been widely and credibly accused of murdering journalists and political opponents.
In 2013, the Manhattan U.S. attorney's office sued a Russian company, accusing it of laundering some of the proceeds of the fraud Magnitsky allegedly uncovered. The complaint incorporated Browder's account about what happened to Magnitsky.
That lawsuit set in motion a process through which that version of events would come under challenge.
The defendant, a company called Prevezon, is owned by Denis Katsyv, who became wealthy while his father was vice governor and transport minister for the Moscow region, according to published reports. The father, Pyotr Katsyv, is now vice president of the state-run Russian Railways. Veselnitskaya has long represented the family.
Prevezon hired a law firm, BakerHostetler, and a team that included a longtime New York prosecutor, John Moscow. Also working on Prevezon's behalf were Simpson, Veselnitskaya and Akhmetshin.
Simpson, a former investigative reporter for the Wall Street Journal, declined to comment.
Simpson also worked with former British intelligence officer Christopher Steele in the creation of the dossier that asserts Trump collusion with Russian election interference. A source close to him said his work on the dossier was kept confidential from his other clients.
The federal civil lawsuit by the Manhattan U.S. attorney against Prevezon was the first opportunity for the U.S. government to publicly present whatever evidence it had to support its legal assertions regarding Magnitsky. It was also an opportunity for the defendants to conduct their own investigation.
Prevezon's American legal team alleged that Browder's story was full of holes -- and that the U.S. and other governments had relied on Browder's version without checking it. Browder and the U.S. government disagreed.
The chief American investigator, Todd Hyman of the Department of Homeland Security, testified in a deposition that much of the evidence in the government's complaint came from Browder and his associates. He also said the government had been unable to independently investigate some of Browder's claims.
In court documents, Prevezon's lawyers alleged that Magnitsky was jailed not because he was a truth-seeker -- but because he was helping Browder's companies in tax evasion.
The Prevezon attorneys charged that Browder "lied," and "manipulated" evidence to cover up his own tax fraud.
The story was "contrived and skillfully sold by William F. Browder to politicians here and abroad to thwart his arrest for a tax fraud conviction in Russia," says a 2015 federal court filing by one of Prevezon's lawyers, Mark Cymrot of BakerHostetler.
A Russian-born filmmaker named Andrei Nekrasov made a similar set of arguments in a docudrama released last year. Neither Prevezon nor the Russian government had a role in funding or making the film, both parties say, though Veselnitskaya and Akhmetshin helped promote it.
|
|
|
Sep 22, 2018 | www.moonofalabama.org
Stumpy , Sep 22, 2018 6:38:58 PM | link
Posted by: craigsummers | Sep 22, 2018 5:17:51 PM | 22
Well, as long as you support the #METOO-ish school of legal doctrine, i.e. whereupon a simple charging is sufficient to establish culpability, you will surely enjoy the following article, on The Nation, The Harvard Boys Do Russia, May, 1998, which you can search for and fact-check with your own tools of choice.
Perhaps consider the idea that within Russia in the 1990s that was systematically sold off to US interests, facilitated by Russian government officials, the Russian social immune system kicked in and gave rise to Vladimir Putin to protect his homeland's interests. Consider further that Trump is dealing with a horde of malignant backstabbing little bitches that are doing their best to rape their own homeland. Maybe the US social immune system is working better than you think, despite attempts to deflect blame towards Trump and Putin, and actual, indictable charges against Clintonian operatives cannot be suppressed much longer.
The DNC is broke. What does that tell you?
|
|
|
Aug 03, 2018 | www.counterpunch.org
There is less shame in being undone by a "master of deceit." When J. Edgar Hoover coined that description, he had Communists in mind. Back then, though, "Ruskies" and "Commies" – it was all the same. Americans were conditioned to live in fear that the Russians were coming.
That nonsense should have ended when Communism more or less officially expired in 1989, followed two years later by the demise of the Soviet Union itself. For a long time, it seemed that it had. At first, the reaction in Western, especially American, political and media circles was triumphalist. The war was over and our side won. Beneath the surface, however, there was mourning in America.
With the Cold War, the death merchants, the masters of war, the neocons, and a host of others had had a good thing going. Having been born into it, the political class was comfortable with the status quo too; and generations of Americans had grown up imbibing Russophobia in their mother's milk (or infant formula).
It turned out, though, that American triumphalism was only a phase. Before long, it became clear that our economic and political masters had nothing to worry about, that Cold War anti-Communism was more robust than Communism itself.
However, in the final days of Bush 41 and then at the dawn of the Clinton era, nobody knew that. Nobody gave America's propaganda system the credit it deserved.
Also, nobody quite realized how devastating Russia's regression to capitalism would be, and nobody quite grasped the savagery of the kleptocrats who had taken charge of what remained of the Russian state.
For more than a decade, the situation in that late great superpower was too dire to sustain the old fears and animosities. Capitalism had made Russia wretched again.
That suited Bill Clinton and his First Lady, the former Goldwater Girl. Boris Yeltsin, Russia's leader, was their man. He was a godsend, a Trump-like cartoon character and a drunkard to boot – with an economy in tatters, and no rightwing base egging him on.
But anti-Communism (without Communism) and its close cousin, Russophobia, could not remain in remission forever. The need for them was too great.
In the Age of Obama, the Global War on Terror, with or without that ludicrous Bush 43-era name, wasn't cutting it anymore. It was, and still is, good for keeping America's perpetual war regime going and for undoing civil liberties, but there had never been much glory in it, only endless misery for all. Also it was getting old and increasingly easy to see through.
The time was therefore right for a return of the repressed -- for full-blooded, fifties-style, anti-Communist (= anti-Russian) hysteria, or, since that still seemed far-fetched, for anti-Communist (= anti-Chinese) hysteria.
This was not the only factor behind the Obama administration's "pivot towards Asia," its largely failed attempt to take China down a notch or two, but it was an important part of the story.
However, by the time Obama and his team decided to pivot, China had become too important to the United States economically to make a good Cold War enemy. Worse still, it had for too long been an object of pity and contempt, not fear.
When the Soviet Union was an enemy, China was an enemy too, most glaringly during the Korean War. It remained an enemy even after the Sino-Soviet split became too obvious to deny. However, unlike post-1917 Russia, it had never quite become an historical foe.
Moreover, as Russia began to recover from the Yeltsin era, the Russian political class, and many of the oligarchs behind them, sensing the popular mood, decided that the time was ripe "to make Russia great again." Putin is not so much a cause as he is a symptom – and symbol – of this aspiration.
And so, there it was: the longed for new Cold War would be much like the one that seemed over a quarter century ago.
***
As everyone who has seen, heard or read anything about the 2016 election "knows," Russian intelligence services (= Putin) meddled. Everyone also "knows" that, with midterm elections looming, they are at it again.
This, according to the mainstream consensus view, is a bona fide casus belli , a justification for war. To be sure, what they want is a war that remains cold; ending life on earth, as we know it, is not on their agenda.
But inasmuch as cold wars can easily turn hot, this hardly mitigates the recklessness of their machinations. Humankind was extraordinarily lucky last time; there is no guarantee that all that luck will hold.
Exactly what "Putin," the shorthand name for all that is Russian and nefarious, did, or is still doing, remains unclear. But this does not seem to bother purveyors of the conventional wisdom. Neither is ostensibly informed public opinion fazed by the fact that the evidence supporting the consensus view comes mainly from American intelligence services and from their counterparts in the UK and other allied nations.
Time was when anyone with any sense understood that these intelligence services, the American ones especially, are second to none in meddling in the affairs of other nations, and that the American national security state – essentially our political police -- is comprised, by design, of liars and deceivers.
How ironic therefore that nowadays it is mainly bamboozled Trump supporters in the Fox News demographic -- people who could care less about peace or, for that matter, about truth -- who are wary of the CIA and skeptical of the FBI's claims!
Try as they might, the manufacturers and guardians of conventional wisdom have so far been unable to concoct a plausible story in which Russian meddling affected the outcome of the 2016 election in any serious way. The idea that the Russians defeated Hillary, not Hillary herself, is, to borrow a phrase from Jeremy Bentham, "nonsense on stilts." Leading Democrats and their media flacks don't seem to mind that either.
They do not even seem to notice that what they allege, vague as it is, is trifling compared to the massive and very open meddling of American plutocrats, Republican vote suppressers and gerrymanderers, and the governments of supposedly friendly nations – like Saudi Arabia, the Gulf monarchies, and Israel.
Nevertheless, it probably is true that the Russians meddled. Cold War revivalists can therefore rest easy, confident that their propagandists will have at least a few facts with which they can work to restore the perils of their vanished youth.
Even so, the level of their hypocrisy is appalling. Russia, along with former Soviet republics and former members of the Warsaw Pact, has been bearing the brunt of far worse American meddling for far longer than anything sanctimonious defenders of so-called American "democracy" can plausibly allege.
Moreover, it should go without saying that the democracy they purport to care so much about has almost nothing to do with "the rule of the demos." It doesn't even have much to do with free and fair competitive elections – unless "free and fair" means that anything goes, so long as the principals and perpetrators are homegrown or citizens of favored nations.
Self-righteous posturing aside, Putin's real sin in the eyes of the American power elite is that, in his own small way, he has been defying America's "right" to run the world as it sees fit.
When Clinton was president, Serbia did that, and lived to regret it. Cuba has been suffering for nearly six decades for the same reason, and now Venezuela is paying its dues. The empire is merciless towards nations that rebel.
With Soviet support and then with sheer determination and grit, Cuba has been able to withstand the onslaught to some extent from Day One. Venezuela may not be so lucky – especially now that Republicans and Democrats feel threatened by the growing number of "democratic socialists" in their midst. Already, the propaganda system is targeting Venezuelan "socialism," blaming it for that country's woes, and warning that if our newly minted, homegrown socialists prevail, a similar fate will be in store for us.
This is ludicrous, of course – American hostility and the vagaries of the global oil market deserve the lion's share of the blame. But the on-going propaganda blitz could nevertheless pave the way for horrors ahead, should Trump decide to start a war America could actually win.
Inconsequential Russian meddling is a big deal on the "liberal" cable networks, on NPR, and in the "quality" press. Democrats and a few Republicans love to bleat on about it. But it is Ukraine that made Russia our "adversary" and its president Public Enemy Number One.
Hypocrisy reigns here too. It was the Obama administration – run through with neocons, liberal imperialists, and other holdovers from Hillary Clinton's tenure as Secretary of State – that did all it could to exacerbate longstanding tensions between that country's Ukrainian and Russian speaking populations, the better to complete NATO's encirclement of the Russian federation. And it was American meddling that led to the empowerment of virulently anti-Russian, fascisant Ukrainian politicians, much to the detriment of Russian speaking Ukrainians in the east.
But never mind: Putin – that is, the Russia government – violated international law by sending troops briefly into beleaguered Russian-speaking parts of the country. That they were generally welcomed by the people living there is of no importance.
Worst of all, Russia annexed Crimea – a territory integral to the Russian empire since the eighteenth century. Since long before the Russian Revolution, Crimea has been home to a huge naval base vital to Russia's strategic defense.
The story line back in the day was that anything that could be described as Russian aggression outside the Soviet Union's agreed upon sphere of influence had to do with spreading Communism. In fact, the Soviets did everything they could to keep Communist and other insurgencies from upending the status quo. The mainstream narrative was wrong.
Now Communism is gone and nothing has taken its place. Even so, the idea that Russia has designs on its neighbors for ideological reasons is hard to shake – in part because it is actively promoted by propagandists who have suddenly and uncharacteristically become defenders of international law.
Meanwhile, of course, the hypocrisies keep piling on. It is practically a tenet of the American civil religion that international law applies to others, not to the United States. This is why, when it suits some perceived purpose, America flaunts its violations shamelessly.
Thus nothing the Russians did or are ever likely to do comes close to the shenanigans Bill Clinton displayed – successfully, for the most part – in his efforts to tear Kosovo away from Serbia. Clinton even went so far as to bomb Belgrade; Putin never bombed Kiev.
The Cold War that began after World War II involved a clash of rival political economic systems. The Cold War that reignited a few years ago involves a clash of rival imperialist centers. Its world more nearly resembles the one that existed before World War I than the one that emerged after World War II.
However, the difference may be more superficial than it seems. The ease with which Cold War revivalists have been able to get the Cold War up and running again, even without Communism, suggests what a few observers have long maintained -- that the Cold War, on Russia's part, had little, if anything, to do with spreading Communism around the world, and everything to do with maintaining a cordon sanitaire around Russia's borders in order to protect against a demonstrably aggressive "free world."
George W. Bush claimed that 9/11 happened because "they hate our freedom." "They" would be radical Islamists of the kind stirred into action in Afghanistan by Zbigniew Brzezinski and his co-thinkers in the Carter administration. Their objective was to undermine the Soviet Union by getting it bogged down in a quagmire like the one that did so much harm to the United States in Vietnam.
That part of Brzezinski's plan was at least a partial success. But inasmuch as Bush's "they" are still there, still spreading murder and mayhem throughout the Greater Middle East, America and the world has been paying a high price for the benefits, such as they were, that ensued.
The never-ending wars set in motion by the "pivot" towards radical Islamism decades ago never quite succeeded in producing an enemy as serviceable as the USSR. But now that Putin's Russia has been pressed into service, that problem is potentially "solved."
However, the American public is not as naïve as it used to be, and it is impossible to say, at this point, how well this new story line will work.
Efforts to recycle Bush's "they hate our freedom" nonsense ought to be non-starters. But this is the best Cold War revivalists have come up with so far. The Russians, they say, simply cannot deal with the fact that we Americans are so damned free.
It is hard to believe, but there are people who are actually buying this but, with a lot of corporate media assistance, there are. No matter how clear it is that they are not worth being taken seriously, Cold War mythologies just won't die.
However, it is worth pondering why today's Russia would do what it is alleged to have done; and why, as is also alleged, it is still doing it.
From a geopolitical point of view, Russia does have an interest in doing all it can to ward off Western aggression. It also has an interest in undermining strategic alliances aimed at blocking anything and everything that challenges American supremacy. And, until sanity prevails in Washington and other Western capitals, it arguably also has an interest in aiding and abetting rightwing nationalists in order to exacerbate tensions within Western societies.
However, in view of prevailing power relations, these are interests it cannot do much to advance. Acting as if this were not the case only puts Russia in a bad light -- not for meddling, but for meddling stupidly.
No doubt, for reasons both fair and foul, Putin wanted Hillary to lose the election two years ago. So, but for one little problem, would anyone whose head is screwed on right. That problem's name is Donald Trump.
Clinton is bad, but Trump is worse -- not just by most measures but by all. Her fondness for war and preparations for war was alarming; she was bellicosity personified. But it was plain even before the election that Trump, a mentally unhinged narcissist, would be even more likely than she to bring on massive devastation. A vote for Trump was and still is a vote for catastrophe.
Putin's enemy was Trump's enemy, and it is axiomatic that "the enemy of my enemy is my friend" -- except sometimes it isn't. Sometimes, my enemy's enemy is an enemy far worse.
For reasons that remain obscure, Putin and Trump seem to have a "thing" going on between them. Some day perhaps we will know what that is all about. For now, though, the hard and very relevant fact is that Trump has done nothing to help, and quite a few things to harm, Russia.
It isn't just ordinary Russians who have been made worse off. Trump has been at least as hard on oligarchs close to Putin as Clinton would have been.
If those damned Russians were half as smart as they are made out to be, they would have realized long ago that, for getting anything done that bucks the tide, Trump is too inept to be of any use at all; and that anything he sets out to do is likely to turn out badly not just for America and its allies but for Russia too.
Therefore, if there really was Russian meddling, as there probably was, Putin should be ashamed – not so much for the DNC reasons laid out 24/7 on MSNBC and CNN, but for overestimating Trump's abilities and for underestimating the extent to which what started out as a maneuver of Hillary Clinton's, concocted to excuse her incompetence, would take a perilously "viral" turn, becoming a major threat to peace in a political culture that never quite got beyond the lunacy of the First Cold War.
Andrew Levine is the author most recently of THE AMERICAN IDEOLOGY (Routledge) and POLITICAL KEY WORDS (Blackwell) as well as of many other books and articles in political philosophy. His most recent book is In Bad Faith: What's Wrong With the Opium of the People . He was a Professor (philosophy) at the University of Wisconsin-Madison and a Research Professor (philosophy) at the University of Maryland-College Park. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).
|
|
|
Sep 08, 2018 | gordonhahn.com
In the post-Soviet period, in addition to the color revolutions supported by the West outside Russia, the West has been involved inside Russia as well. Washington was also involved in helping Boris Yeltsin resist the August 1991 and October 1993 coups. Washington was indirectly involved in Boris Yeltsin's 1996 re-election campaign. As I have mentioned several times, a VERY reliable source confided to me that the xerox copying paper box filled with half a million dollars being transported for later use by Yeltsin's pro-democracy camp but intercepted by Yeltsin's hardline operatives consisted of U.S. funds. For a less revealng inkling of the kind of involvement see Time magazine's July 1996 article "Saving Boris"( http://content.time.com/time/covers/0,16641,19960715,00.html or https://offgraun.files.wordpress.com/2018/02/201612201405.pdf ). McFaul noted that the three American consultants to Russian President Boris Yeltsin's 1996 re-election campaign -- George Gorton, Joe Shumate, and Richard Dresner -- contracted by Oleg Soskovets, a former first deputy prime minister whom Yeltsin named head of his campaign, were "breaking Russia's law against foreigners' working directly in campaigns" ( www.weeklystandard.com/yanks-brag-press-bites/article/8538 ). In addition, the IMF released a several billion dollar tranche of economic assistance on the election's eve to buttress Yeltsin further. Yeltsin's government was infested with US advisors, some of whom engaged in corrupt practices of insider trading on the Russian stock market as part of their 'democracy-promotion' efforts.
The U.S. government's Radio Free Europe/Radio Liberty , among other government organs, carried out propaganda defending post-Soviet Russia's jihadi separatists for years (see https://gordonhahn.com/2015/02/18/caucasus-jihadism-through-western-eyes-the-failure-of-american-rusology-to-understand-the-north-caucasus-mujahedin/ and https://gordonhahn.com/2017/11/04/whos-been-interfering-in-whose-politics/ ). One 'small' example among very many was noted in a paper I published seven years ago: "Less than three weeks after CE (Caucasus Emirate or 'Imarat Kavkaz') amir Umarov sent a suicide bomber to attack Moscow's Domodedovo Airport killing 37 and wounding more than 200, RFERL 's 'chief Caucasus correspondent' Liz Fuller praised him as a 'father' who restrains the mujahideen: "If these young men [the CE's younger mujahideen] have not become the callous brutes Khasbulatov anticipated, much of the credit must surely lie with the older commanders who were fathers before they became ghters, and have since assumed the role of father gures to the younger generation of insurgents: the natural-born pedagogue Abdullayev; Tarhan; Mansur; and even Umarov, seen receiving a lial embrace from Hadji-Murat at the very end of this clip" [Liz Fuller, "Chechnya's Youngest Insurgents," RFERL , February 14, 2011, www.rferl.org/content/blog/2308952.html , last accessed on 28 February 2018 and cited in Gordon M. Hahn, Getting the Caucasus Emirate Right (Washington, DC: Center for Strategic and International Studies, August 2011), p. 14, fn 14]. Again, the 'Umarov' RFERL 's Liz Fuller, whose salary was paid from your taxes, was the amir of the Caucasus Emirate while it carried out nearly 60 suicide bombings and several thousand other terrorist attacks in Russia from 2007-2013, after which the bulk of its 'Chechen national resistance' fighters (most not frm Chechnya but from Dagestan, Kabardino-Balkaria and elsewehere in Russia as well as from abroad) ensconced to Syria and Iraq to 'fight for Chechen independence' while those back home officially joined the Islamic State (ISIS). For a similar Fuller article hailing the 'work' of the small Islamo-ultranationalist Chechen, non-CE terrorist cell, see "Remembering Mansur," RFERL , March 17, 2011, http://www.rferl.org/content/caucasus_re- port_remembering_mansur/2341725.html.
The main reason for Russia's restrictions on NGO activity inside the country is that the very same Western government-tied organizations that funded color revolutionary activity in Serbia, Georgia, Ukraine and elsewhere -- USAID, NED, DNI, RNI, and so on -- were funding indirectly Russian political opposition-oriented organizations. The reason media are now included under these restrictive regime lies in the West's massive propaganda, disinformation, and strategic communications infrastructure – typified in its output by articles such as the one supporting jihadi and Islamo-nationalist terrorists in Russia – in comparison with which Russia's is a weak imitation ( https://gordonhahn.com/2018/01/22/russian-propaganda-machine-much-ado-about-little-as-compared-with-western-stratcomm-update/ ).
~~~~~~~~~~~~~~~~~~~~~~
About the Author – Gordon M. Hahn, Ph.D., Expert Analyst at Corr Analytics, http://www.canalyt.com and a Senior Researcher at the Center for Terrorism and Intelligence Studies (CETIS), Akribis Group, San Jose, California, www.cetisresearch.org .
Dr. Hahn is the author of Ukraine Over the Edge: Russia, the West, and the 'New Cold War (McFarland Publishers, 2017) and three previously and well-received books: Russia's Revolution From Above: Reform, Transition and Revolution in the Fall of the Soviet Communist Regime, 1985-2000 (Transaction Publishers, 2002); Russia's Islamic Threat (Yale University Press, 2007); and The Caucasus Emirate Mujahedin: Global Jihadism in Russia's North Caucasus and Beyond (McFarland Publishers, 2014).He has published numerous think tank reports, academic articles, analyses, and commentaries in both English and Russian language media and has served as a consultant and provided expert testimony to the U.S. government.
Dr. Hahn also has taught at Boston, American, Stanford, San Jose State, and San Francisco State Universities and as a Fulbright Scholar at Saint Petersburg State University, Russia. He has been a senior associate and visiting fellow at the Center for Strategic and International Studies and the Kennan Institute in Washington DC as well as the Hoover Institution at Stanford University.
|
|
|
Sep 07, 2018 | www.zerohedge.com
So, we drove onto St. Petersburg mostly on a two-lane road cut through the boreal forest of the northern latitudes. It was here that I witnessed something that amazed all of us – how vehicle drivers cooperated to turn two lanes into de facto four lanes of traffic.
As faster drivers moved to pass slower vehicles, the slower vehicles would move onto the asphalt shoulder and even as our bus moved over the center line, the oncoming traffic would shift to the right, too. It all was spontaneously coordinated and everyone on the road was in on the scheme.
Entering St. Petersburg was an experience in itself. With five million people spread over a number of islands, we saw new high-rises standing alongside the old Soviet-era apartment buildings. No one, however, comes to St. Petersburg to see the relics of the U.S.S.R. Instead, they come to see the czarist palaces and the stunning 18thand 19th century architecture that dominates the city. It may be the birthplace of the Bolshevik Revolution, but people come to pay homage to the way of life the Bolsheviks wanted to destroy and to Czar Nicholas II and his family, infamously and brutally murdered on Lenin's orders in 1918.
A century later, the bones of the last royal family of Russia lie safely in St. Peter and Paul Cathedral. Despite more than 70 years of communist rule, and despite all of the blood spilled to keep the likes of Lenin, Stalin, and the others in power, and despite the massive propaganda that ordinary people in the U.S.S.R. had to endure, St. Petersburg is the city of the czars, not the Bolsheviks.
Parts of St. Petersburg are run down – as nearly the entire city was during the days of communism – but other parts of it absolutely are amazing to see. Likewise, I enjoyed interacting with the locals and especially the young people that made up most of the workforce of our hotel, from running the desks to cleaning our rooms. The legendary dour Soviet worker was replaced by a competent employee who patiently answered our questions and took care of whatever we needed. For all of the talk in the USA that Russia is a dictatorship under the iron thumb of Vladimir Putin, Russia did not seem like a dictatorship. Our Russian tour guide often would take a swipe at Putin (including likening his face to a painting of dogs at the Hermitage) and life itself there seemed to have the kind of normalcy that could not have been possible when people were compelled to inform on one another.
The St. Petersburg we visited was not the Leningrad that Logan Robinson described in his humorous 1982 book An American in Leningrad , which described life as a post-graduate student living among Russian students and developing friendships with local writers, artists, and musicians, people who often harassed, persecuted, and arrested by local authorities. That city was an armed camp full of soldiers and had been relegated to being a backwater by Joseph Stalin and his successors who made Moscow the Soviet "showplace," leaving the city founded by Peter the Great to succumb to the northerly elements.
... ... ...
Americans cannot fathom what it is like to have entire cities destroyed or badly-damaged by bombs and artillery and have ruthless armies fight each other over their territories. Nor can we imagine having governments carry out massive executions of people whose only "crime" was not being what the government leadership wanted them to be. We cannot imagine the starvation, the disease, and watching family and friends be shipped off to places like Siberia where they surely would die terrible deaths.
spooz ,
moon_unit ,This article is red-baiting propaganda, aren't we getting enough of that from the Democratic party Everybody with a brain realizes that there are differences between communism and the democratic socialism that is becoming popular in the US, but some the Mises misers like to dupe the ignorant into conflating the two.
Democratic Socialism:
In very simplistic terms, paraphrasing from A. J. Elwood, Democratic Socialism:
- Work together to ensure social equality and to improve one another's lives.
- Reject the exploitation of all peoples and uphold the principles of equality.
- Value the environment and use our natural resources in a sustainable manner.
- Ensure free and open elections, where each citizen has a voice and a vested interest in his or her government.
- Provide free education to all to ensure equal opportunity and the free flow of ideas, opinions, and information.
- Protect and assist the disadvantaged using surplus from both public and privately owned enterprise.
- Deliver quality health care to all citizens, regardless of their needs or socio-economic status
https://www.myenglishteacher.eu/blog/difference-between-socialism-and-democratic-socialism/
The US has let the excesses of Capitalism control our country, with wealthy owning our legislature and receiving bail outs and tax cuts to preserve their wealth, while a growing percentage of the formerly middle class is thrown under the bus, with no savings and no way to make a living wage. Those millennials don't see any way of achieving what used to be the American Dream and are looking for some help with their struggle.
Most modern countries have a mix of socialism and capitalism.
"The United Nations World Happiness Report 2013 shows that the happiest nations are concentrated in Northern Europe, where the Nordic model of social democracy is employed, with Denmark topping the list." (wikipedia)
LA_Goldbug ,Bill Anderson travels, but sometimes he sees what he wants to see.
Let's take some points:
-He saw a "*small* railroad boxcar". Very romantic but - Soviet boxcars were fricken' huge, the rail gauge is massive. Pics with a person next to it, or it didn't happen. IF it was very small, it was more likely a technical wagon for railway engineers, not for "cargo" of any kind. Plus, anyone alive bitching about it clearly had parents , most likely that never left to go anywhere , you know what I'm saying here?
-He went to Jurmala sea resort and misunderstood it, thought it was "all Soviet", all built for "nomenklatura". This is not unusual to think so, but he was wrong - it was largely built as a Spa town in the 1850s during the Russian Empire times by the majority wealthy *German* ethnic group in Riga. In fact German was the main language in the city up to 1891. Most of those large spa town wooden houses were built for German traders - who traded with the locals outside Riga, Brits and Russians. The city had a British Mayor George Armitstead from 1901 - 1912 during the Russian Empire - a civil engineer and the city's most popular mayor ever, who built the first tram lines, hospitals, covered markets and so on.
The Balts kicked those German traders out starting from around 1880 or so. If you check out cemeteries you will see a sudden transition from elegant old German noble script to badly-spelled early variant local language with German styles and lettering. Of course that improved as they created formalised spellings for words in the local languages.
The author fails to mention all the other occupants that he doesn't want you to know about - briefly-
-German Crusaders (Knights of the Livonian Order / Teutonic Knights)- Holy Roman Empire - 12thC
-Polish-Lithuanian Commonwealth 16thC
-Swedes 1621-1710
-Russian Tsarist Empire 1710 - 1918 -trading with German Riga / Brits and Russian language only imposed officially in 1891-Local people perpetrators - no kidding, Herberts Cukurs, Viktors Arajs?
Photos of people in mass graves - sure you didn't "make a mistake"? - if you mean at Skede beach, Rumbuli and Bikernieki forests, and Salapspils, those were killed by everyones "special Germans* (and of course the local militia commanders Cukurs and Arajs) in everyone's "special German 3-year era" from 1942-44. Oddly, no-one seems interested in the hundreds of years of genuine Geman noble culture and trading in what was essentially a German Empire freeport ...
Certainly there was a book about some Soviet killing mass graves elsewhere but it turns out the book about that was funded and printed by a certain Josef Goebbels? No doubt it was true, but aren't people a little embarrassed at carrying that book, perhaps a different author at least, maybe a historian would be less shameful to carry around?
-Freer wealthier - oh sure, if you put aside mass emigration, houses without heat or water or sewerage, destitute pensioners walking in the streets in winter with supermarket bags on their legs to try to avoid frostbite - not always successfully , by the way.
-"The citizens of the Baltic countries were not the only ones suffering under communism. No other city in the U.S.S.R. underwent the horror of a 900-day siege by German armies during World War II" - that's hardly their fault, now is it?
-"as I sat in the Old Town section of Riga eating and drinking and listening to live music, I strained to imagine the place as a battle zone with death and destruction all around where now I sat" - yeah, like when the Russians and Brits were trying to keep out Napoleon's armies? Hmmm?
-"I imagined the stores that now are full of goods and restaurants with food and drink being empty or stocked with subpar merchandise in the aftermath of the war as the Soviets imposed their primitive communist system and oppressed the people in the name of "liberating" them for many decades until they finally left in the early 1990s"- you have a great imagination. You should write film scripts for Hollywood. Some of those people are still walking around, try telling them they are primitives.
-"No, I cannot see people in our cities having experienced anything like what the people of the Baltics and St. Petersburg had to tolerate for decades." - tolerate things like electronics factories, car and van production, science institutes, shipbuilding and repair, ladies who aren't afraid of math or computers, that kind of thing? But sure, they couldn't get debt, mass prostitution, Hasselhoff and blue jeans, consumer junk or type II diabetes, that is a total provocation, right you are .demoses ,I also smell a lot of BS in this article. I visited Eastern Europe before and know exactly what is being mentioned. Elites IN ALL COUNTRIES have their favorite hideaways. That is a norm in the West, East and anywhere else.
Boxcars at train stations are nothing new. Latvia is poor and probably has lots of them from way way back because THAT WAS THE STANDARD design for a multi-purpose wagon in Eastern Europe. Why throw away something that does the job ?? But to say it was "the one" used to transport people to camps is a huge stretch. Hell I could point to Boeings and say "That is the one sending people to Guantanamo".
Nexus789 ,As an eastern European I can tell you that I do not get triggered by old monuments / words / city names. I guess that is a "no real problems" American problem... where you lack other problems and have a hard time looking around what could trigger you... "oh no! A company called MANpower!!! MAN???" and maybe "country called MonteNEGRO? How dare they?" ;)
LA_Goldbug ,These Mises wankers write as if they have found utopia and the US is some kind of 'market' paradise They are foot soldiers for the one percent.
Atalanta ,Here is how Utopia looks lest the Eu readers think otherwise.
https://idsb.tmgrup.com.tr/2015/07/23/HaberDetay/1437603968944.jpg
LA_Goldbug ,Seeing the splinter in other men eyes. Not the tree in own. After the USSR birth, a U.S, with friends, invaded Russia. From that moment to now history is full of conflicted horrors. Standing out WW 2, and many more like Korea and Vietnam. Scars can be seeing all over the planet except the U.S. The writer of article must be a exceptional person.
CaptainObvious ,Their best weapon is "weaponized credit" which sheep see but don't understand.
OverTheHedge ,"Americans cannot fathom what it is like to have entire cities destroyed or badly-damaged by bombs and artillery and have ruthless armies fight each other over their territories."
Sure we can. Look at Detroit. Look at Baltimore. Look at Chicago. Those look pretty warn-torn to me. But I guess the "War on Poverty" and the "War on Drugs" don't count, eh? And I guess drive-by shootings and purposefully-fomented riots and civil asset forfeiture and excessive taxation aren't weapons of mass destruction either.
"Nor can we imagine having governments carry out massive executions of people whose only "crime" was not being what the government leadership wanted them to be."
Yeah, we tax mules are pretty familiar with the bowel-crippling fear that any envelope marked "IRS" causes. Men have certainly been introduced to the economic execution of being stripped of all their assets because they knocked some slut up. People of all ages and colors have been locked away in jail for 50 years for having a baggy of green stuff in their pocket. And, the horror!, it's now a crime punishable by jail time to call someone by the wrong gender pronouns in the People's Republic of Kalifornia. But yeah, economic execution and unjustified imprisonment don't happen here in the Land of the Free ™ , so it's all good.
"We cannot imagine the starvation, the disease, and watching family and friends be shipped off to places like Siberia where they surely would die terrible deaths."
Oh, sure we can. We see starving people every day on the streets, made homeless by a drug addiction that was introduced to them by a licensed physician. We watch family and friends shipped off to Bankruptcy court because some fucktarded jury awarded a scam artist seven figures for manufacturing a slip-and-fall in the Mom & Pop Pizza Palace. We watch our loved ones die every day from medical malpractice and toxic prescriptions.
No equivalency, you say? Well, to that I say balls. Russia was never free. After they abolished serfdom in the nineteenth century, the system was still in place that the aristocracy held most of the land and the peasants farmed that land for a pittance. In America, the laws abolished slavery and sweatshops, but the system is still in place that the tycoons own most of the assets and the peasants sweat their best years away in a cubicle, or behind a cash register, or under someone else's machinery, for a pittance.
Am I advocating for communism? Hell, no! I'm advocating for an end to the corporatocracy and small-business-killing legislation. Most ordinary Americans who become wealthy do so because they had the gumption to start their own business. But they can't do that if all laws favor the already-established, and they can't do that if they're required to burn half a lifetime's worth of cash for an official piece of paper from a gubmint-subsidized center of indoctrination, and they can't do that if they're supposed to be licensed and bonded to do something simple like trim the hair of another human.
ddiduck ,Hyperbole to make your point is fine, but the reality is that fat, soft seppos have absolutely no idea.
- https://historyimages.blogspot.com/2009/10/battle-for-stalingrad-some-rare.html
- https://en.m.wikipedia.org/wiki/Coventry_Blitz#/media/File%3ACoventry_bomb_damage_H5600.jpg
And then there is the good guys' work:
- https://duckduckgo.com/?q=dresden+bombing&t=brave&ia=images&iax=images
- https://duckduckgo.com/?q=nagasaki+bombing&t=brave&iax=images&ia=images
- https://duckduckgo.com/?q=korea+war+bombing&t=brave&iar=images&iax=images&ia=images
- https://cdn.cnn.com/cnnnext/dam/assets/171009130211-02-postwar-mosul-super-tease.jpg
Actually, that last one proves me wrong - there are SOME Americans who know precisely what a destroyed city looks like - they have been doing the destroying for the last 20 years, and at fully up to speed with what it entails. The question will be: who will they be destroying for, should it ever come home to roost?
louie1,The [neoliberal] deep state is about impoverishing the masses so that they keep their mouths shut, they don't give a rats ass if your liberal or conservative, black or white, yellow or orange, just keep your mouth shut about them.
Best is if you fight amongst yourselves and play make believe. Do you feel prosperous now? They like it when you you really get violent toward each other, great scam huhhh? It is called misdirection, want to toast some asses start with Soros, Rothschilds nad Rockefeller, greatest criminals against humanity! By the way, these mother fk'rs are satanic and bleed children out regularly! Now take pause and consider this when deciding who the real villain in your unfair world is!
Like all Zionist globalist neocon revolutions they are bloody, indiscriminate and sociopathic. The same gang are running the USA now. And the world central banking system.
|
|
|
Sep 03, 2018 | caucus99percent.com
leveymg on Sun, 09/02/2018 - 4:13pm
We helped put the Oligarchs into business, Putin reigned them in so he has to go
From before the collapse of the Soviet Union, the U.S. has been cultivating a commercial and political elite abroad that we could "work with." As in most of the developing world during the Cold War, that meant that post-communist Russia was an oligarchy kept in money and power by IMF loans, graft, private militias and death squads.
Such was the case during the Boris Yeltsin's government that presided over the Russian Federation, a self-contained trading bloc shorn of half of its richest territories. The result of loss of most military spending and trade resulted in an average 50% loss in real living standards for the typical Russian in the depths of the Depression during the early 1990s. What grew out of the rubble was the New Russia controlled by the Oligarchs, run by returning members of Russian ethnic organized crime families once scattered around the world and remnants of the KGB, party bosses, and former Soviet military who couldn't move enough their assets out of the country while the door was still open. For Deripaska, that door closed the other way in 2006, when he lost his US B-1 visa, which meant that he had to make a deal with the FBI's McCabe and other US intelligence handlers to reenter the U.S. to access his stash deposited in Goldman Sachs and Morgan Stanley.
Is Oleg really Putin's "closest oligarch", as is again repeated here in the Times?
The arrest of Mikhail Khodorkovsky, the owner of Yukos Oil Co., one of the world's major oil suppliers on October fifth, 2003 was a signal that things would never be the same for the oligarchs. By the time he took his third term as Russian President in 2012, Putin had put highly concentrated large industries increasingly under state supervision, curtailing the effective power and range of operation of many oligarchs, restricting the movement of private wealth out of the country, including that of Oleg Deripaska, whom he publicly humiliated in 2009, as seen in this video.
|
|
|
Sep 02, 2018 | www.moonofalabama.org
karlof1 , Sep 1, 2018 7:26:22 PM | 137the testimony before the Outlaw US Empire's Senate Foreign Relations Committee by Wess Mitchell:"Russia and China are serious competitors that are building up the material and ideological wherewithal to contest U.S. primacy and leadership in the 21st Century. It continues to be among the foremost national security interests of the United States to prevent the domination of the Eurasian landmass by hostile powers. The central aim of the administration's foreign policy is to prepare our nation to confront this challenge by systematically strengthening the military, economic and political fundaments of American power."
Mitchell mentions a document I wasn't able to locate, the "Russia Integrated Strategy," but I was able to find what appears to be its predecessor , "Russia Project Strategy, 2014-2017."
Surely, this conforms to the Outlaw US Empire's Imperialism via which its goal is the Full Spectrum Domination (FSD) of the planet and its people.
Some would consider that as Totalitarianism -- the doctrine of total control. During its drive to attain FSD, certain aspects must be masked from the Empire's public since relatively unfettered freedom is featured as one of its alleged values, which is why the many undemocratic aspects of various "trade" agreements are never discussed and negotiated in secret, for example. What do we call a government that directly lies to its populous? What sort of ism is in play?
Mitchell's testimony was done in public so it didn't remain secret very long, was written about in Russian, then the analysis was translated into English .
Hopefully barflies and others will read these documents and shudder, although I'm sure a few will say "So, what's new?" Well, this goes far beyond the millennia long, ongoing Class War, and confirms what I've been saying for awhile now -- We're already within a Hybrid Third World War being waged by people who want everything or nothing.
What sort of ism's that? In my book, it's the worst form of Authoritarianism anyone might imagine.
|
|
|
Sep 02, 2018 | caucus99percent.com
CB on Sun, 09/02/2018 - 11:12pm
Putin demanded several more caveats@Alligator Ed
in addition to staying out of politics:1) You pay your taxes
2) You pay your employees
3) There will be no asset strippingBill Browder (of Magnitsky fame) broke all these rules while pillaging Russia. From 1995–2006 his company, Hermitage Capital Management, siphoned untold billions of dollars out of Russia into offshore accounts while paying no taxes and cheating workers of wages and pensions.
Putin put an end to US and UK backed shysters stealing Russia blind. Is it any wonder the western oligarchs hate him with such a passion?
|
|
|
caucus99percent.com
If Russia were trying to interfere in U.S. domestic politics, it wouldn't be attempting to change the US system but to prevent it from trying to change Russia's, argues Diana Johnstone.
Sojourner Truth , August 28, 2018 at 6:27 pm
Some perspective on Khordokovsky, et al can be found here:
http://spitfirelist.com/for-the-record/ftr-531-interview-with-lucy-komisar-about-offshore/
Jessika , August 28, 2018 at 1:39 pm
A rather vague statement, Dick Vain, but it appears you support the 'unipolar hegemony'? Hard to tell what you intend by use of 'privilege'. Diana Johnstone's article documents the activities of Khodorkovsky, Browder, Gessen, who continue to agitate against Putin. There are others. So what's your point, and what's the b.s.?
The evidence is clear, Biden and Obama got the Magnitsky Act passed, and one of those two is not 'white', which is not the issue, anyway -- the issue is money, power and control.
Jerry Alatalo , August 28, 2018 at 1:26 pm
Diana Johnstone's immeasurably important, timely, extraordinary exposition of true facts – truth rarely, if ever, acknowledged in the United States Congress and/or Western media – represents what can most certainly be described as "historic gamechanger".
Dick Vain , August 28, 2018 at 12:59 pm
How much privilege does it take to write these words:
"Russian interference in American politics is totally welcome so long as it helps turn public opinion against "multipolar" Putin, glorifies American democracy, serves U.S. interests, including the military industries, helps break down national borders (except those of the United States and Israel) and puts money in appropriate pockets in the halls of Congress."
By estimate it doesn't matter as long as it's white
Trading in one devil for another
People who support this bullshit upside down line of thinking are welcome to jump off a cliff really.
Walter , August 28, 2018 at 12:07 pm
About the Secret State or Power Elite Thierry Meyssan wrote about a new and signal event http://www.voltairenet.org/article202622.html
The Power Elite are facing an abyss, of real war and defeat, or simply defeat as "assets" are prepared in Syria for a showdown, with dozens of warships and so forth Meantime they drivel about trivial stuff in "news" from the fascist press, and the Germans prepare to make nice with Ivan (the satrapies are switching sides, alas!)
" The Western powers are moving inexorably towards Internet censorship, thereby facilitating the dissemination of propaganda and war indoctrination in their countries. In this context, an extremely violent tension is tearing apart the international scene. Aware of the increasing risk of general confrontation, Moscow is attempting to find credible interlocutors in the UNO and the United States. What is happening at the moment has seen no equivalent since 1938, and could degenerate in the same way.,,,"
and (darkly) : "From Moscow's point of view, the war of aggression – by the intervention of jihadist proxies – against Syria must cease, and the unilateral sanctions by the US, Canada and the European Union against Russia must be lifted. The problem that we must all now face is not the defence [sic] of democracy, but the danger of war.
Void of any legitimacy, a parallel hierarchy in New York and Washington intends to plunge the world into a generalised [sic] conflict."
robjira , August 28, 2018 at 11:35 pm
Outstanding article by Meyssan; thanks for linking.
anastasia , August 28, 2018 at 12:00 pm
Really good elucidation of the double standard in American politics as it concerns Russian interference.
modern99angel , August 28, 2018 at 11:46 am
"The greatest tool at the disposal of globalists is the use of false paradigms to manipulate public perception and thus public action. The masses are led to believe that at the highest levels of geopolitical and financial power there is such a thing as "sides." This is utter nonsense when we examine the facts at hand.
We are told the-powers-that-be are divided by "Left" and "Right" politics, yet both sides actually support the same exact policy actions when it comes to the most important issues of the day and only seem to differ in terms of rhetoric, which is meaningless and cosmetic anyway. That is to say, it's nothing but Kabuki theater.
The abuses of one "side" are being used to push us into the arms of the other side, which is just as abusive.
In terms of geopolitics, we are told that national powers stand "at cross-purposes;" that they have different interests and different goals, which has led to things like "trade wars" and sometimes shooting wars. Yet, when we look at the people actually pulling the strings in most of these countries, we find the same names and institutions. Whether you are in America, Russia China, the EU, etc., globalist think tanks and international banks are everywhere, and the leaders in all of these countries call for MORE power for such institutions, not less.
These wars, no matter what form they take, are a circus for the public. They are engineered to create controlled chaos and manageable fear. They are a means to influence us towards a particular end, and that end, in most cases, is more social and economic influence in the hands of a select few. In each instance, people are being convinced to believe that the world is being divided when it is actually being centralized."
Lee Anderson , August 28, 2018 at 12:15 pm
Angel, you are on point. What you describe about the two sides is the Hegelian Dialectic in action. This is why the shadow rulers are desperate to maintain two-party duopoly.
Very enlightening article, by the way. Well done.
Walter , August 28, 2018 at 11:37 am
Russia does have an evident Policy to demonstrate and illuminate the "fissures in our tapestry [of lies]".
This tapestry itself is US Policy, as incoming CIA boss Casey said: ""We'll Know Our Disinformation Program Is Complete When Everything the American Public Believes Is False." (look it up). RT and other Russian source keep showing the Americans and the rest of the world that the "tapestry" is infested. This is a iconoclastic Policy burning the false gods of myth.
It would not work if American propaganda told the truth but it happens that they must lie – it's Policy set by the secret state, the "power elite" as C. Wright Mills termed it. And it is a signal of proximate disaster read MacBeth "Hang those who speak of fear" on the cusp of Banquo's defeat of poor old Mac .
The Quakers say "Tell the truth and shame the devil" – that's about what the Ruskies are doing shaming the devil by exposing his lies.
Jessika , August 28, 2018 at 11:37 am
An overlooked meddler is George Soros, who was also a player in the takedown of Russia and has been kicked out by Putin and the Duma, his NGOs are not allowed to operate in Russia. Orban has had him banned in Hungary. There are constant neoliberal apologists for Soros, but his hidden hand working behind the scenes has been well documented. Russia, especially Putin, is Soros' "white whale", as Alex Christoforou states in "Leaked Memo Exposes George Soros' plan to overthrow Putin", 7/19/18: . "how the billionaire uses his vast wealth to create global chaos in a neverending push to deliver his neoliberal euphoria to the peasant classes". Alex Christoforou, sovereignnations.com, originally published on The Duran.
Larry Gates , August 28, 2018 at 10:45 am
Brilliant, insightful, lucid, full of interesting details. It is articles like this that keep me coming back to Consortioum News.
phillip sawicki , August 28, 2018 at 2:32 pm
I agree. We'd be much more ignorant of the facts without Johnstone.
Herman , August 28, 2018 at 10:27 am
"Needless to say, Khodorkovsky's Corbiere Trust lobbied hard to get Congress to pass the Magnitsky Act. This type of "Russian interference intended to influence policy" goes unnoticed while U.S. authorities scour cyberspace for evidence of trolls."
America has the gall to accuse Russia of doing something we do openly and to a far greater extent.
Great article. Not sure about the mechanics of how a select few stole Russia's wealth. Somewhere I read the thieves did not have to put up their own money, but performed the conversion through Russian loans. The purchase prices were so low compared to the real value of the assets that they became overnight billionaires. Don't now if they repaid the loans.
Someone may have a different understanding of how it was done.
Great article.
Bob Van Noy , August 28, 2018 at 9:12 am
Thanks to all. It is crucial at this point to keep the so called Russiagate story in context beyond the pages and discussion here at CN. To that extent I will offer an excellent article from off Guardian by Eric Zuesse including some excellent links especially one leading to an interview of Anne Williamson about her book on the subject. I will link the off Guardian piece but I encourage those inclined to carefully follow all the links and video's so that we can offer a clear counter to what happened in Russia and why
Jessika , August 28, 2018 at 8:45 am
The political theater dubbed "Russiagate" (aren't we getting "gated" to death?) is looking more and more like cover for the dirty deeds of Clinton, throwing more and more pooh at the already-fatigued American public, trying to make Trump look like the bad guy so nobody notices what really went on in Clinton world.
Tobey , August 28, 2018 at 8:28 am
Hermitage Capital Management can you correct that typo ?
mike k , August 28, 2018 at 8:07 am
Trying to predict what the crazy greedy power hungry bastards leading the human world to it's extinction will do next, is the maddening game we are forced to play by their suicidal games. No one can guess exactly how they will blunder into destroying us all, but their moves in this direction are apparent,
backwardsevolution , August 28, 2018 at 6:31 am
This is a really good article entitled "Fixers":
"If there's one thing that is exposed in the sorry not-so-fairy tale of former Trump aides Paul Manafort and Michael Cohen, it's that Washington is a city run by fixers. Who often make substantial amounts of money. Many though by no means all, start out as lawyers and figure out that let's say 'the edges of what's legal' can be quite profitable.
And it helps to know when one steps across that edge, so having attended law school is a bonus. Not so much to stop when stepping across the edge, but to raise one's fees. There's a lot of dough waiting at the edge of the law. None of this should surprise any thinking person. Manafort and Cohen are people who think in millions, with an easy few hundred grand thrown in here and there. [ ]
Lanny Davis is a lawyer, special counsel even, for the Clintons. Has been for years. Which makes it kind of curious that Michael Cohen would pick him to become his legal representation. But that's not all Davis is involved in. Like any true fixer, he has his hands in more cookie jars than fit in the average kitchen. [ ]
And now Davis, the Clinton fixer, is Michael Cohen's lawyer. The fixer defending a fixer. So who pays the bill? Well, ostensibly no-one, because Davis started a Go Fund Me campaign where people can donate so Cohen "can tell people the truth about Trump". The goal is $500,000. Which goes to .. Lanny Davis. [ ]
In the end, I can draw only one conclusion: there are so many sharks and squids swimming in the swamp that either it should be expanded or the existing one should be cleaned up and depopulated. So bring it: investigate the FBI, the Clintons, and fixers like Lanny Davis and Michael Avenatti, the same way the Trump camp has been.
Because if you don't do that, you can only possibly end up in an even bigger mess. You can't drain half a swamp."
https://www.theautomaticearth.com/2018/08/fixers/
Lanny Davis proceeds to go on a whole bunch of talk shows, claiming the sky is falling, and then in the next couple of days walks all of it back.
Another tactic of a psychopath: lie, lie and lie. Get the lie(s) out there any way you can, create lots of damage. Then when you're called on what you've said, you just say something like, "Yeah, I guess I had that wrong." The "walking back" is never covered as much as the original lie.
Michael , August 28, 2018 at 8:20 am
The number of Establishment politicians and their lawyers protecting their turf (Ukraine and Russia) seems to be multiplying. When Mueller did not arrest the Podesta Group and Greg Craig, it was clear that his investigation was a partisan "get Trump" witch hunt; Mueller destroyed his own credibility by not removing all the bad apples, just the Trump-brand ones.
backwardsevolution , August 28, 2018 at 5:57 am
You can't even keep up with the actors and players in Russiagate's Theatre of the Absurd. The Hillary Clinton campaign and the DNC hire Perkins Coie, a law firm, in order to hide the fact that they're doing opposition research with campaign funds. Perkins Coie hires Fusion GPS, a research firm, and Fusion GPS hires Christopher Steele, a former MI6 British agent to come up with some dirt on Trump. Then there's all of the DOJ, FBI and CIA actors who were in on setting up Trump. Add the media into the mix and you've got quite a story of lies and corruption.
Tomorrow Bruce Ohr (a lawyer and former number four official at the DOJ) gives testimony before the House Intelligence Committee to explain his 70+ interactions with Christopher Steele. His wife, Nellie Ohr, worked for Glen Simpson at Fusion GPS, and apparently Bruce Ohr accidentally failed to mention that his wife was working for Fusion GPS on his DOJ disclosure form.
Nellie Ohr, Harvard graduate in Russian history/literature and fluent in Russian, suddenly decides to get her HAM radio licence in May of 2016. Could she have gotten this to get around being tracked? Who knows.
Good article, Diana Johnstone.
Realist , August 28, 2018 at 4:46 am
This article makes the precipitous decline of America's middle class a bit clearer in retrospect. The lawless free-for-all that was unleashed on America's economy after all the rules and regulations were stricken from the books during the Clinton years was already being put into effect in Russia–which theretofore had no need for laws to regulate rampant capitalism which had completely disappeared from the country 70 years earlier. The elite insiders in America saw how quickly and effectively a country could be picked clean in the absence of restraints. By the time our own safeguards were erased during the 90's whilst Russia was being pillaged, the transnational oligarchs were all set to pick America clean during the Bush years, which they did using the MIC and the Wall Street financial institutions against a background of deliberate war, fear and societal confusion.
By the time Candyman Obama took office, Main Street America was on the verge of economic collapse, just like Russia. People were losing their jobs, their homes, their health, their families, their self-respect and their hope. Obviously, the job the Obama administration was chosen to do was to stabilise, but not cure the patient. Money stolen from future generations of taxpayers through government borrowing was used to prop up the financial institutions on the verge of collapse just as surely as Yeltsin's Russia stole from the collective to create its oligarchs. But little to nothing was done to help the middle class so their economic death spiral continues (any help for them would represent that demonic force called "socialism!"), as it will until the vampire capitalists have extracted whatever life force remains, whereupon they shall simply move on to their next targets–one of the "developing countries" or "emerging economies" they are struggling mightily to control by whatever means necessary, as if it is totally natural and permissible to preclude trade between all of Central Asia and its neighbors in China or Russia, to say nothing of monopolizing all relations with the America's, Europe, Africa, India and probably Mars. Nothing is to be permitted unless Jeff Bezos says so.
This business of collecting NATO allies across the globe is simply setting them up for future economic exploitation. And when sometime past mid-century after the resources have all played out and ruined economies litter the landscape, I suppose the "masters of the universe" orchestrating all of this will ultimately have to unleash their final solution for "down-sizing" the population to fit the economic realities, be it a war, a plague, or simply mass starvation. I don't think psychopaths will be burdened too much by guilt, besides there won't be too many people left to cast blame on them. With all the computational resources of the world at their disposal, I'm sure a million scenarios have been run on the supercomputers in some bunker under a mountain near Davos looking for the tidiest fix. Not that WE would know, but they may already be implementing some scheme drawn up by HAL9000, who by now probably walks around in a flawless fembot body. (Ooops. Didn't realise I was plagiarizing Fritz Lang's "Metropolis" with that last bit.)
Dave P. , August 28, 2018 at 7:48 pm
What an accurate sketch! Along with the future scenario planned for the humanity on the planet. As always, your comments are closest to reality as one can get. Your comments are valued very much.
backwardsevolution , August 28, 2018 at 12:03 am
"In 2016, Winer received the highest award granted by the Secretary of State, for 'extraordinary service to the U.S. government' in avoiding the massacre of over 3,000 members of an Iranian dissident group in Iraq, and for leading U.S. policy in Libya 'from a major foreign policy embarrassment to a fragile but democratic, internationally recognized government.'"
http://www.mei.edu/profile/jonathan-m-winer
OMG, high-fives and booyahs! Just look at what you get for failing!
Eduardo Cohen , August 27, 2018 at 11:54 pm
Excellent article. Very informative. I'm just surprised that in the listing of nations from which people are welcome to seek
the interference of U.S. power to settle old scores or overthrow their government (Iraq, Libya, Iran, Russian, Cuba) the very current examples of Venezuela, Nicaragua and Syria are not mentioned. But still a great article.Joe Tedesky , August 27, 2018 at 10:44 pm
At the rate the U.S. Hegemony Project is going America will be a leader with no followers.
https://journal-neo.org/2018/08/27/playing-sanction-ism-backfires-the-us-to-isolation/
Joe Tedesky , August 28, 2018 at 8:08 am
Here's more to read .
https://www.counterpunch.org/2018/08/28/sanctions-backfire-us-is-being-left-behind/
David G , August 27, 2018 at 10:32 pm
This Diana Johnstone piece actually dovetails really well with the recent CN article by Caitlin Johnstone, "How to Beat a Manipulator". https://consortiumnews.com/2018/08/17/how-to-beat-a-manipulator/#comments
CJ wrote:
"Manipulators particularly use projection as a tactic to hide what they're doing to you in plain sight. A manipulator can have you chasing your tail by simply suggesting that you or others are doing what you are seeing them doing with your own eyes. DNC caught rigging the election? Oh no, it was actually Russia who rigged the election by catching the DNC rigging the election. See what I did there? It's so dumb, but it works."Here DJ clues us in on another of the same sort of con, or more precisely, another aspect of the same big con.
David G , August 27, 2018 at 9:46 pm
"One may question the selectivity of Bill Clinton's concern for international law enforcement, which certainly did not cover violating international law by bombing defenseless countries."
or catching international fugitives like Marc Rich.
Tom Kath , August 27, 2018 at 8:52 pm
We cannot jump to conclusions regarding Putin's MULTIpolar vision. At this stage BIpolar would seem a more accurate description. – Still, a step in the right direction from UNIpolar hegemony.
Gary Weglarz , August 27, 2018 at 10:15 pm
Tom Kath – and your reason for describing Russia as supporting a "Bipolar" rather than multi-polar world would be the some 21 Russian military bases versus the U.S. having almost 900 such bases? Perhaps you're referring to Russia's recent invasions and/or attempted destabilizations of Afghanistan, Iraq, Libya, Syria, Yemen, Venezuela, Nicaragua, Iran – oh, wait, that's the U.S. list. Help me out here – what am I missing Tom? Do I need to tune into to Rachel for a few days to get up to snuff?
Gary Weglarz , August 27, 2018 at 8:17 pm
Excellent post. The anti-Russian absurdist psycho-carnival taking place for two years now in U.S. mainstream media should be enough (in a sane society) to topple this house of cards – along with its fantasy goal of "full spectrum dominance" – yet it soldiers on. Perhaps only a self-inflicted nuclear winter can stop this mad machine and the assorted array of absolute dolts at the helm. Oddly they would seem to vastly prefer this option to accepting a multi-polar world – which of course speaks volumes regarding what passes for "sanity" in U.S. ruling circles these days.
Jeff Harrison , August 27, 2018 at 8:13 pm
I vote for Vladimir Putin's multipolar vision of the world and against the US's vision of a new Roman Empire.
|
|
|
Aug 19, 2018 | www.bostonglobe.com
FOR ONE OF THE world's major powers to interfere systematically in the presidential politics of another country is an act of brazen aggression. Yet it happened. Sitting in a distant capital, political leaders set out to assure that their favored candidate won an election against rivals who scared them. They succeeded. Voters were maneuvered into electing a president who served the interest of the intervening power. This was a well-coordinated, government-sponsored project to subvert the will of voters in another country -- a supremely successful piece of political vandalism on a global scale.
The year was 1996. Russia was electing a president to succeed Boris Yeltsin, whose disastrous presidency, marked by the post-Soviet social collapse and a savage war in Chechnya, had brought his approval rating down to the single digits. President Bill Clinton decided that American interests would be best served by finding a way to re-elect Yeltsin despite his deep unpopularity. Yeltsin was ill, chronically alcoholic, and seen in Washington as easy to control. Clinton bonded with him. He was our "Manchurian Candidate."
"I guess we've just got to pull up our socks and back ol' Boris again," Clinton told an aide. "I know the Russian people have to pick a president, and I know that means we've got to stop short of giving a nominating speech for the guy. But we've got to go all the way in helping in every other respect." Later Clinton was even more categorical: "I want this guy to win so bad it hurts." With that, the public and private resources of the United States were thrown behind a Russian presidential candidate.
Part of the American plan was public. Clinton began praising Yeltsin as a world-class statesman . He defended Yeltsin's scorched-earth tactics in Chechnya, comparing him to Abraham Lincoln for his dedication to keeping a nation together. As for Yeltsin's bombardment of the Russian Parliament in 1993, which cost 187 lives, Clinton insisted that his friend had "bent over backwards" to avoid it. He stopped mentioning his plan to extend NATO toward Russia's borders, and never uttered a word about the ravaging of Russia's formerly state-owned economy by kleptocrats connected to Yeltsin. Instead he gave them a spectacular gift.
Four months before the election, Clinton arranged for the International Monetary Fund to give Russia a $10.2 billion injection of cash. Yeltsin used some of it to pay for election-year raises and bonuses, but much quickly disappeared into the foreign bank accounts of Russian oligarchs. The message was clear: Yeltsin knows how to shake the Western money tree. In case anyone missed it, Clinton came to Moscow a few weeks later to celebrate with his Russian partner. Oligarchs flocked to Yeltsin's side. American diplomats persuaded one of his rivals to drop out of the presidential race in order to improve his chances.
RELATEDFour American political consultants moved to Moscow to help direct Yeltsin's campaign. The campaign paid them $250,000 per month for advice on "sophisticated methods of polling, voter contact and campaign organization." They organized focus groups and designed advertising messages aimed at stoking voters' fears of civil unrest. When they saw a CNN report from Moscow saying that voters were gravitating toward Yeltsin because they feared unrest, one of the consultants shouted in triumph: "It worked! The whole strategy worked. They're scared to death!"
Yeltsin won the election with a reported 54 percent of the vote. The count was suspicious and Yeltsin had wildly violated campaign spending limits, but American groups, some funded in part by Washington, rushed to pronounce the election fair. The New York Times called it "a victory for Russia." In fact, it was the opposite: a victory by a foreign power that wanted to place its candidate in the Russian presidency.
American interference in the 1996 Russian election was hardly secret. On the contrary, the press reveled in our ability to shape the politics of a country we once feared. When Clinton maneuvered the IMF into giving Yeltsin and his cronies $10.2 billion, the Washington Post approved: "Now this is the right way to serve Western interests. . . It's to use the politically bland but powerful instrument of the International Monetary Fund." After Yeltsin won, Time put him on the cover -- holding an American flag. Its story was headlined, "Yanks to the Rescue: The Secret Story of How American Advisors Helped Yeltsin Win." The story was later made into a movie called "Spinning Boris."
This was the first direct interference in a presidential election in the history of US-Russia relations. It produced bad results. Yeltsin opened his country's assets to looting on a mass scale. He turned the Chechen capital, Grozny, into a wasteland. Standards of living in Russia fell dramatically. Then, at the end of 1999, plagued by health problems, he shocked his country and the world by resigning. As his final act, he named his successor: a little-known intelligence officer named Vladimir Putin. It is a delightful irony that shows how unwise it can be to interfere in another country's politics. If the United States had not crashed into a presidential election in Russia 22 years ago, we almost certainly would not be dealing with Putin today.
|
|
|
Aug 24, 2018 | ronpaulinstitute.org
The Cold War between the United States and the Soviet Union was ostensibly a conflict between two ideologies, two socio-economic systems.
All that seems to be over. The day of a new socialism may dawn unexpectedly, but today capitalism rules the world. Now the United States and Russia are engaged in a no-holds-barred fight between capitalists. At first glance, it may seem to be a classic clash between rival capitalists. And yet, once again an ideological conflict is emerging, one which divides capitalists themselves, even in Russia and in the United States itself. It is the conflict between globalists and sovereignists, between a unipolar and a multipolar world. The conflict will not be confined to the two main nuclear powers.
The defeat of communism was brutally announced in a certain "capitalist manifesto" dating from the early 1990s that proclaimed: "Our guiding light is Profit, acquired in a strictly legal way. Our Lord is His Majesty, Money, for it is only He who can lead us to wealth as the norm in life."
The authors of this bold tract were Mikhail Khodorkovsky, who went on to become the richest man in Russia, before spending ten years in a Russian jail, and his business partner at the time, Leonid Nevzlin, who has since retired comfortably to Israel.
Loans For Shares
Those were the good old days in the 1990s when the Clinton administration was propping up Yeltsin as he let Russia be ripped off by the joint efforts of such ambitious well-placed Russians and their Western sponsors, notably using the "loans for shares" trick.
In a 2012 Vanity Fair article on her hero, Khodorkovsky, the vehemently anti-Putin journalist Masha Gessen frankly summed up how this worked:
The new oligarchs -- a dozen men who had begun to exercise the power that money brought -- concocted a scheme. They would lend the government money, which it badly needed, and in return the government would put up as collateral blocks of stock amounting to a controlling interest in the major state-owned companies. When the government defaulted, as both the oligarchs and the government knew it would, the oligarchs would take them over. By this maneuver the Yeltsin administration privatized oil, gas, minerals, and other enterprises without parliamentary approval.This worked so well that from his position in the Communist youth organization, Khodorkovsky used his connections to get control of Russia's petroleum company Yukos and become the richest oligarch in Russia, worth some $15 billion, of which he still controls a chunk despite his years in jail (2003-2013). His arrest made him a hero of democracy in the United States, where he had many friends, especially those business partners who were helping him sell pieces of Yukos to Chevron and Exxon. Khodorkovsky, a charming and generous young man, easily convinced his American partners that he was Russia's number one champion of democracy and the rule of law, especially of those laws which allow domestic capital to flee to foreign banks and foreign capital to take control of Russian resources.Vladimir Putin didn't see it that way. Without restoring socialism, he dispossessed Khodorkovsky of Yukos and essentially transformed the oil and gas industry from the "open society" model tolerated by Yeltsin to a national capitalist industry. Khodorkovsky and his partner Platon Lebedev were accused of having stolen all the oil that Yukos had produced in the years 1998 to 2003, tried, convicted and sentenced to 14 years of prison each. This shift ruined US plans, already underway, to "balkanize" Russia between its many provinces, thereby allowing Western capital to pursue its capture of the Russian economy.
The dispossession of Khodorkovsky was certainly a major milestone in the conflict between President Putin and Washington. On November 18, 2005, the Senate unanimously adopted resolution 322 introduced by Joe Biden denouncing the treatment of the Khodorkovsky and Lebedev as politically motivated.
Who Influences Whom?
Now let's take a look at the history of Russian influence in the United States. It is obvious that a Russian who can get the Senate to adopt a resolution in his favor has a certain influence. But when the "deep state" growls about Russian influence, it isn't talking about Khodorkovsky. It's talking about a joking response Trump made to a reporter's snide question during the presidential campaign. In a variation of the classic "when did you stop beating your wife?" the reporter asked if he would call on Russian President Vladimir Putin to "stay out" of the election.
Since a stupid question does not deserve a serious answer, Trump said he had "nothing to do with Putin" before adding, "Russia, if you're listening, I hope you're able to find the 30,000 e-mails that are missing. I think you will probably be rewarded mightily by our press."
Aha! Went the Trump haters. This proves it! Irony is almost as unwelcome in American politics as honesty.
When President Trump revoked his security clearance earlier this month, former CIA chef John Brennan got his chance to spew out his hatred in the complacent pages of the New York Times.
Someone supposed to be smart enough to head an intelligence agency actually took Trump's joking invitation as a genuine request. "By issuing such a statement," Brennan wrote, "Mr. Trump was not only encouraging a foreign nation to collect intelligence against a United States citizen, but also openly authorizing his followers to work with our primary global adversary against his political opponent."
The Russians, Brennan declared, "troll political, business, and cultural waters in search of gullible or unprincipled individuals who become pliant in the hands of their Russian puppet masters."
Which Russians do that? And who are those "individuals"?
'The Fixer in Chief'
To understand the way Washington works, nothing is more instructive than to examine the career of lawyer Jonathan M. Winer, who proudly repeats that in early 2017, the head of the Carnegie Endowment Bill Burns introduced him as "the Fixer in Chief". Winer has long been unknown to the general public, but this may soon change.
Let's see what the fixer has fixed.
Under the presidency of fellow Yalie Bill Clinton, Winer served as the State Department's first Deputy Assistant Secretary for International Law Enforcement, from 1994-1999. One may question the selectivity of Bill Clinton's concern for international law enforcement, which certainly did not cover violating international law by bombing defenseless countries. In any case, in 1999, Winer was awarded for "virtually unprecedented achievements". Later we shall examine one of those important achievements.
At the end of the Clinton administration, from 2008 to 2013, the Fixer in Chief worked as high up consultant at one of the world's most powerful PR and lobbying firms, APCO Worldwide. This is how the Washington revolving door functions: after a few years in government finding out how things work, one then goes into highly paid "consultancy" to sell this insider information and influential contacts to private clients.
APCO got off to a big start some thirty years ago lobbying for Philip Morris and the tobacco industry in general.
In 2002, APCO launched something called the "Friends of Science" to promote skepticism concerning the harmful effects of smoking. In 1993, the campaign described its goals and objectives "encouraging the public to question – from the grassroots up – the validity of scientific studies."
While Winer was at APCO, one of its major activities was hyping the Clinton Global Initiative, an international networking platform promoting the Clinton Foundation. APCO president and CEO Margery Kraus explained that the consultancy was there to "help other CGI members garner interest for the causes they are addressing, demonstrate their success and highlight the wide-ranging achievements of CGI as a whole." Considering that only five percent of Clinton Foundation turnover went to donations, they needed all the PR they could get.
Significantly, donations to the Clinton Global Initiative have dried up since Hillary lost the presidential election. According to the Observer : "Foreign governments began pulling out of annual donations, signaling the organization's clout was predicated on donor access to the Clintons, rather than its philanthropic work."
This helps explain Hillary Clinton's panic when she lost in 2016. How in the world can she ever reward her multi-million-dollar donors with the favors they expected?
As well as the tobacco industry and the Clinton Foundation, APCO also works for Khodorkovsky. To be precise, according to public listings, the fourth biggest of APCO's many clients is the Corbiere Trust, owned by Khodorkovsky and registered in Guernsey. The trust tends and distributes some of the billions that the oligarch got out of Russia before he was jailed. Corbiere money was spent to lobby both for Resolution 322 (supporting Khodorkovky after his arrest in Russia) and for the Magnitsky Act (more later). Margery Kraus, APCO's president and CEO, is a member of Mikhail Khodorkovsky's son Pavel's Institute of Modern Russia, devoted to "promoting democratic values" – in other words, to building political opposition to Vladimir Putin.
In 2009 Jonathan Winer went back to the State Department where he was given a distinguished service award for having somehow rescued thousands of stranded members of the Muhahedin-e Khalq from their bases in Iraq they were trying to overthrow the Iranian government. The MeK, once officially recognized as a terrorist organization by the State Department, has become a pet instrument in US and Israeli regime change operations directed at Iran.
However, it was Winer's extracurricular activities at State that finally brought him into the public spotlight early this year – or rather, the spotlight of the House Intelligence Committee, whose chairman Devin Nunes (R-Cal) named him as one of a network promoting the notorious "Steele Dossier" which accused Trump of illicit financial dealing and compromising sexual activities in Russia. By Winer's own account , he had been friends with former British intelligence agent Christopher Steele since his days at APCO. Back at State, he regularly channeled Steele reports, ostensibly drawn from contacts with friendly Russian intelligence agents, to Victoria Nuland, in charge of Russian affairs, and top Russian experts. These included the infamous "Steele dossier". In September 2016, Winer's old friend Sidney Blumenthal – a particularly close advisor to Hillary Clinton – gave him notes written by a more mysterious Clinton insider named Cody Shearer, repeating the salacious attacks.
All this dirt was spread through government agencies and mainstream media before being revealed publicly just before Trump's inauguration, used to stimulate the "Russiagate" investigation by Robert Mueller. The dossier has been discredited but the investigation goes on and on.
So, it is all right to take seriously information allegedly obtained from "Russian agents" and spread it around, so long as it can damage Trump. As with so much else in Washington, double standards are the rule.
Jonathan Winer and the Magnitsky Act
Jonathan Winer played a major role in Congressional adoption of the "Sergei Magnitsky Rule of Law Accountability Act of 2012" (the Magnitsky Act), a measure that effectively ended post-Cold War hopes for normal relations between Washington and Moscow. This act was based on a highly contentious version of the November 16, 2009 death in prison of accountant Sergei Leonidovich Magnitsky, as told to Congress by hedge fund manager Bill Browder (grandson of Earl Browder, head of the Communist Party USA 1934-1945). According to Browder, Magnitsky was a lawyer beaten to death in prison as a result of his crusade for human rights.
However, as convincingly established by dissident Russian film-maker Andrei Nekrasov's (banned) investigative documentary, the unfortunate Magnitsky was neither a human rights crusader, nor a lawyer, nor beaten to death. He was an accountant jailed for his role in Browder's business dealings, who died of natural causes as a result of inadequate medical treatment. The case was hyped up as a major human rights drama by Browder in order to discredit Russian charges against himself.
In any case, by adopting a law punishing Magnitsky's alleged persecutors, the US Congress acted as a supreme court judging internal Russian legal issues.
The Magnitsky Act also condemns legal prosecution of Mikhail Khodorkovsky. Browder, on a much smaller scale, also made a fortune ripping off Russians during the Yeltsin years, and later got into trouble with Russian tax collectors. Since Browder had given up his US citizenship in order to avoid paying US taxes, he had reason to fear Russian efforts to extradite him for tax evasion and other financial misdeeds.
It was Jonathan Winer who found a solution to Browder's predicament.
As Winer tells it :
When Browder consulted me, [ ] I suggested creating a new law to impose economic and travel sanctions on human-rights violators involved in grand corruption. Browder decided this could secure a measure of justice for Magnitsky. He initiated a campaign that led to the enactment of the Magnitsky Act. Soon other countries enacted their own Magnitsky Acts, including Canada, Estonia, Latvia, Lithuania, and most recently, the United Kingdom.Russian authorities are still trying to pursue their case against Browder. In his press conference following the Helsinki meeting with Trump, Vladimir Putin suggested allowing US authorities to question the Russians named in the Mueller indictment in exchange for allowing Russian officials to question individuals involved in the Browder case, including Winer and former US ambassador to Moscow Michael McFaul. Putin observed that such an exchange was possible under the Mutual Legal Assistance Treaty signed between the two countries in 1999, back in the Yeltsin days when America was posing as Russia's best friend.But the naïve Russians did not measure the craftiness of American lawyers.
As Winer wrote:
"Under that treaty, Russia's procurator general can ask the US attorney general to arrange for Americans to be ordered to testify to assist in a criminal case. But there is a fundamental exception: The attorney general can provide no such assistance in a politically motivated case ." (My emphasis.)"I know this", he wrote, "because I was among those who helped put it there. Back in 1999, when we were negotiating the agreement with Russia, I was the senior State Department official managing US-Russia law-enforcement relations."So, the Fixer in Chief could have said to the worried Browder, "No problem. All that we need to do is make your case a politically motivated case. Then they can't touch you."
Winer's clever treaty is a perfect Catch-22. The treaty doesn't apply to a case if it is politically motivated, and if it is Russian, it must be politically motivated.
In a July 15, 2016, complaint to the Justice Department, Browder's Heritage Capital Management accused both American and Russian opponents of the Magnitsky Act of violating the Foreign Agents Registration Act (FARA; adopted in 19938 with Nazis in mind). Among the "lobbyists" cited was the late Ron Dellums (falsely identified in the complaint as a "former Republican congressman").
The Heritage Capital Management brief declared that: "While lawyers representing foreign principals are exempt from filing under FARA, this is only true if the attorney does not try to influence policy at the behest of his client." However, by disseminating anti-Magnitsky material to Congress, any Russian lawyer was "clearly trying to influence policy" was therefore in violation of FARA filing requirements."
Catch-22 all over again.
Needless to say, Khodorkovsky's Corbiere Trust lobbied heavily to get Congress to pass the Magnitsky Act, which also repeated its defense of Khodorkovsky himself. This type of "Russian interference intended to influence policy" is not even noticed, while US authorities scour cyberspace for evidence of trolls.
Conclusion
The basic ideological conflict here is between Unipolar America and Multipolar Russia. Russia's position, as Vladimir Putin made clear in his historic speech at the 2007 Munich security conference, is to allow countries to enjoy national sovereignty and develop in their own way. The current Russian government is against interference in other countries' politics on principle. It would naturally prefer an American government willing to allow this.
The United States, in contrast, is in favor of interference in other countries on principle: because it seeks a Unipolar world, with a single "democratic" system, and considers itself the final authority as to which regime a country should have and how it should run its affairs .
So, if Russians were trying to interfere in US domestic politics, they would not be trying to change the US system but to prevent it from trying to change their own. Russian leaders clearly are sufficiently cultivated to realize that historic processes do not depend on some childish trick played on somebody's computer.
US policy-makers practice interference every day. And they are perfectly willing to allow Russians to interfere in American politics – so long as those Russians are "unipolar" like themselves, like Khodorkovsky, who aspire to precisely the same unipolar world sought by the State Department and George Soros. Indeed, the American empire depends on such interference from Iraqis, Libyans, Iranians, Russians, Cubans – all those who come to Washington to try to get US power to settle old scores or overthrow the government in the country they came from. All those are perfectly welcome to lobby for a world ruled by America.
Russian interference in American politics is totally welcome so long as it helps turn public opinion against "multipolar" Putin, glorifies American democracy, serves US interests including the military-industrial complex, helps break down national borders (except those of the United States and Israel) and puts money in appropriate pockets in the halls of Congress.
|
|
|
Aug 23, 2018 | caucus99percent.com
Linda Wood on Thu, 08/23/2018 - 12:16pm
The gap between[The difference between] what the average American knows about Russia and reality is frightening.]
What happened with Putin is that he went to the left of Yeltsin, our boy, our Bushworld plaything, poster boy of "unfettered" capitalism, the raping of Russia.
Bushworld didn't just deregulate mining and resource extraction in Russia, it deregulated everything, the abuse of labor, the destruction of education, the corruption of everything previously socialist and plunged Russia into an organized crime free fire zone.
The standard of living fell to pieces and huge fortunes were made by U.S., British, and other western speculators.
Putin has apparently moved to the left of that nightmare, and for that we are supposed to fear him, for insisting speculators pay their taxes and pay living wages and support social systems like education and healthcare as well as public infrastructure.
For that we are supposed to go to war and contribute the destruction of huge parts of the United States in a nuclear war so Assholes like Albright and her followers can live the lives of potentates.
|
|
|
Aug 22, 2018 | www.moonofalabama.org
Pft | Aug 21, 2018 4:17:31 PM | 28
Russians hold as much as one trillion in USD assets outside Russia that were stolen from Russia in the 90's and number far greater if including all of the FSU. The stimulus to the global and US economy was enormous and created asset bubbles until the great collapse in 2008. The current bubble was due to quantitative easing of central banks as the flows from Russia and FSU dried up.
Much of this was held in tax havens and then moved to the US after cleaning via shelf companies. Trumps empire was rebuilt with Russian oligarchs/mafia money as real estate was a favorite investment for money launderers
During the Ukrainian conflict Putin began an amnesty program asking oligarchs to repatriate these assets by waiving penalties and taxes. He restarted it at the end of last year, hence the need to expand the list of assets to be seized before they fly the coop.
Trump may know where a lot of these assets are parked. Perhaps he had been a good informant of the FBI/CIA like his partner Felix Sater
Browder who helped facilitate the looting before he was kicked out of Russia and the Magnitsky Act are all part of the efforts to seize or at least contain as much of the loot as possible and keep it from Russia
|
|
|
Aug 17, 2018 | www.zerohedge.com
Jim Kunstler Exposes The Democratic Party's "Three-Headed Monster"
by Tyler Durden Fri, 08/17/2018 - 14:35 132 SHARES Authored by James Howard Kunstler via Kunstler.com,
The faction that used to be the Democratic party can be described with some precision these days as a three-headed monster driving the nation toward danger, darkness, and incoherence.
Anyone interested in defending what remains of the sane center of American politics take heed:
The first head is the one infected with the toxic shock of losing the 2016 election. The illness took hold during the campaign that year when the bureaucracy under President Obama sent its lymphocytes and microphages in the "intel community" -- especially the leadership of the FBI -- to attack the perceived disease that the election of Donald Trump represented. The "doctors" of this Deep State diagnosed the condition as "Russian collusion." An overdue second opinion by doctors outside the Deep State adduced later that the malady was actually an auto-immune disease.
The agents actually threatening the health of the state came from the intel community itself: Mr. Brennan, Mr. Clapper, Mr. Comey, Mr. Strzok, Mr. McCabe, Mr. Ohr, Ms. Yates. Ms. Page, et. al. who colluded with pathogens in the DNC, the Hillary campaign, and the British intel service to chew up and spit out Mr. Trump as expeditiously as possible.
With the disease now revealed by hard evidence, the chief surgeon called into the case, Robert Mueller, is left looking ridiculous -- and perhaps subject to malpractice charges -- for trying to remove an appendix-like organ called the Manifort from the body politic instead of attending to the cancerous mess all around him. Meanwhile, the Deep State can't stop running its mouth -- The New York Times , CNN, WashPo , et al -- in an evermore hysterical reaction to the truth of the matter: the Deep State itself colluded with Russia (and perhaps hates itself for it, a sure recipe for mental illness).
The second head of this monster is a matrix of sinister interests seeking to incite conflict with Russia in order to support arms manufacturers, black box "security" companies, congressmen-on-the-take, and an army of obscenely-rewarded Washington lobbyists in concert with the military and a rabid neocon intellectual think-tank camp wishing to replay the cold war and perhaps even turn up the temperature with some nuclear fire. They are apparently in deep confab with the first head and its Russia collusion storyline. Note all the current talk about Russia already meddling in the 2018 midterm election, a full-fledged pathogenic hallucination.
This second head functions by way of a displacement-projection dynamic. We hold war games on the Russian border and accuse them of "aggression." We engineer and pay for a coup against the elected government of Ukraine, and accuse Russia of aggression. We bust up one nation after another in Middle East and complain indignantly when Russia acts to keep Syria from becoming the latest failed state. We disrupt the Russian economy with sanctions, and the Russian banking system with a cut-off of SWIFT international currency clearing privileges, and accuse them of aggression. This mode of behavior used to be known as "poking the bear," a foolish and hazardous endeavor. The sane center never would have stood for this arrant recklessness. The world community is not fooled, though. More and more, they recognize the USA as a national borderline personality, capable of any monstrous act.
The third head of this monster is the one aflame with identity politics. It arises from a crypto-gnostic wish to change human nature to escape the woes and sorrows of the human condition -- for example, the terrible tensions of sexuality. Hence, the multiplication of new sexual categories as a work-around for the fundamental terrors of human reproduction as represented by the differences between men and women. Those differences must be abolished, and replaced with chimeras that enable a childish game of pretend, men pretending to be women and vice-versa in one way or another: LBGTQetc. Anything BUT the dreaded "cis-hetero" purgatory of men and women acting like men and women. The horror .
Its companion is the race hustle and its multicultural operating system. The objective has become transparent over the past year, with rising calls to punish white people for the supposed "privilege" of being Caucasian and pay "reparations" in one way or another to underprivileged "people of color." This comes partly from the infantile refusal to understand that life is difficult for everybody, and that the woes and sorrows of being in this world require fortitude and intelligence to get through -- with the final reward being absolutely the same for everybody.
Creative_Destruct -> Got The Wrong No Fri, 08/17/2018 - 16:30 Permalink
Chad Thunderfist -> venturen Fri, 08/17/2018 - 14:56 Permalink"We engineer and pay for a coup against the elected government of Ukraine, and accuse Russia of aggression. We bust up one nation after another in Middle East and complain indignantly when Russia acts to keep Syria from becoming the latest failed state. We disrupt the Russian economy with sanctions, and the Russian banking system with a cut-off of SWIFT international currency clearing privileges, and accuse them of aggression. This mode of behavior used to be known as "poking the bear," a foolish and hazardous endeavor. "
And this shit has been going on since the Soviet Union broke up and the "Harvard Boys" helped turn Russia into a corrupt Oligarchy, something the Left was first to identify.
STP -> edotabin Fri, 08/17/2018 - 17:36 Permalink...[MSM] owners:
https://www.opensecrets.org/pres16/contributors?id=N00000019
https://en.wikipedia.org/wiki/Donald_Sussman
https://en.wikipedia.org/wiki/Penny_Pritzker
https://en.wikipedia.org/wiki/James_Harris_Simons
https://en.wikipedia.org/wiki/Haim_Saban
https://en.wikipedia.org/wiki/George_Soros
https://en.wikipedia.org/wiki/Dustin_Moskovitz
https://en.wikipedia.org/wiki/Justin_Rosenstein
https://en.wikipedia.org/wiki/S._Daniel_AbrahamI was talking to someone, who knows a lot about the 'inner workings' and we were discussing, not only the US, but Europe's situation as well.
The rising of the Populist parties in the UK, Germany, especially Italy and now Sweden, portends an interesting trend, not just nationally, but world wide...
|
|
|
Aug 11, 2018 | www.nytimes.com
Yet the political realm is where Soros has made his most audacious wager. After the fall of the Berlin Wall, in 1989, he poured hundreds of millions of dollars into the former Soviet-bloc countries to promote civil society and [neo]liberal democracy. It was a one-man Marshall Plan for Eastern Europe, a private initiative without historical precedent. It was also a gamble that a part of the world that had mostly known tyranny would embrace ideas like government accountability and ethnic tolerance. In London in the 1950s, Soros was a student of the expatriated Austrian philosopher Karl Popper, who championed the notion of an "open society," in which individual liberty, pluralism and free inquiry prevailed. Popper's concept became Soros's cause.
... ... ...
...In the 1990s, he was portrayed by the far left as an agent of American imperialism, helping to foist the so-called neoliberal agenda (mass privatization, for example) on Eastern Europe. For some critics, Soros's Wall Street background has always been a mark against him.
Last autumn, he signaled that same sense of defiance when he announced that he was in the process of transferring the bulk of his remaining wealth, $18 billion in total at the time, to the O.S.F. That will potentially make it the second-largest philanthropic organization in the United States, in assets, after the Bill & Melinda Gates Foundation. It is already a sprawling entity, with some 1,800 employees in 35 countries, a global advisory board, eight regional boards and 17 issue-oriented boards. Its annual budget of around $1 billion finances projects in education, public health, independent media, immigration and criminal-justice reform and other areas
... ... ...
He decided that his goal would be opening closed societies. He created a philanthropic organization, then called the Open Society Fund, in 1979 and began sponsoring college scholarships for black South African students. But he soon turned his attention to Eastern Europe, where he started financing dissident groups. He funneled money to the Solidarity strikers in Poland in 1981 and to Charter 77 in Czechoslovakia. In one especially ingenious move, he sent hundreds of Xerox copiers to Hungary to make it easier for underground publications to disseminate their newsletters. In the late 1980s, he provided dozens of Eastern European students with scholarships to study in the West, with the aim of fostering a generation of [neo]liberal democratic leaders. One of those students was Viktor Orban, who studied civil society at Oxford. From his Manhattan trading desk, Soros became a strange sort of expat anticommunist revolutionary.
... ... ...
In one campaign rally in Budapest, Orban referred to Soros as "Uncle George," telling tens of thousands of supporters that "we are fighting an enemy that is different from us. Not open but hiding; not straightforward but crafty; not honest but base; not national but international; does not believe in working but speculates with money; does not have its own homeland but feels it owns the world." Along with the fiery speeches, there were the billboards, which featured a picture of a smiling Soros and the message, "Let's not let George Soros have the last laugh."
... ... ...
Orban's coalition won 49 percent of the vote, enough to give it a supermajority in Parliament. But the anti-Soros campaign didn't end with the election. Days after the vote, a magazine owned by a pro-Orban businesswoman published the names of more than 200 people in Hungary that it claimed were Soros "mercenaries."
... ... ...
There have been mistakes; by his own admission, Soros erred in championing Mikheil Saakashvili, the mercurial former president of Georgia, and also became too directly involved in the country's politics in the early 2000s. He clearly misjudged Orban. But as Victoria Nuland, a former American diplomat who worked for both Dick Cheney and Hillary Clinton, put it when I spoke to her recently, "George is a freedom fighter."
alexander hamilton new york July 17
Conservative Democrat WV July 17"Billionaire philanthropist?" Really? Does that make the Koch brothers and Sheldon Adelstein "philanthropists" too, or does that label apply only to left-leaning individuals seeking political leverage many times that of the average citizen?
One citizen, 1 vote. ALL citizens should be limited to $100 contributions for their senators, representatives and the President. NO citizen should be able to contribute to a campaign in a state where he/she is not a full-time permanent resident.
And NO citizen should be able to contribute more than $100 to his/her own campaign. We don't need more Kennedys, Clintons, Bloombergs, Trumps, Perots or Forbes buying (or trying to buy) their way into public office, using their millions.
Of the people, by the people, for the people. That's the model, folks. Depart from it at your peril.
Maqroll North Florida July 17 Times PickFor a man that purportedly promotes democracy, Mr. Soros conveniently overlooked public opinion when it came to promoting open borders.
In its essence, democracy is all about the wisdom and will of those governed, and not about what a billionaire thinks is best for them.
WPLMMT New York City July 17 Times PickSoros--a "European at heart." Must have brought some much-needed smiles to the UK following the recent Trump Tour of Destruction. How soon we forget--in the 90s, Soros broke the pound as the Brits were trying to unify European currencies--with unfortunate conditions that weakened the effort and Soros smartly exploited.
Who can blame a globalist from crashing a poorly devised govt scheme and walking away with a cool $1B--back when a billion dollars was a lot of money? I am not the person to say whether Soros may qualify as an honest proponent of democracy, but I strongly suspect that he is a poster boy of the ultra-nationalists as they battle globalization.
In a way, Soros epitomizes the failure of globalization, which may or may not benefit the classic, labor-intensive industries of manufacturing, agriculture, construction, and mining, but always benefits, sometimes wildly, the financial "industry."
As far as I'm concerned, Soros is merely making reparations. And, sorry to say, George, it's prob too little, too late.
gpickard Luxembourg July 17 Times PickI always thought George Soros was a dangerous [neo]liberal but after reading this article and seeing the damage he has created around the world it has been confirmed. Nigel Farage, the British politician, recently said on television that Mr. Soros is out to destroy the world. It certainly appears to be the case when you see what he did to the British and Thai economies. He was so concerned with helping immigrants and refugees that he had little regard for the citizens that actually lived in those countries that are being affected. People lost their livelihoods but that did not matter to him.
Mr. Soros fights for all the [neo]liberal causes no matter the consequences. He ... does not care who he hurts as long as he promotes his progressive agenda. He wants to allow as many immigrants to enter a nation as possible even if it adversely affects that country while he lives in luxury and is not inconvenienced by this invasion. He has billions and will probably never be touched by massive immigration.
I am glad that the conservatives and others are finally seeing his true colors and are trying to subdue him the best they can. He must be called out on this negative behavior before it is too late. It is reassuring that many of the European nations are implementing policies that are favorable to their countries and looking out for their people. Europeans must be protected and George Soros stopped. I am glad they see him for what he truly is which is frightening.
c smith Pittsburgh July 17As Mr. Soros said of himself, "I am a confirmed egoist." He has used his money to make the world as he thinks is best. But having money does not give you a better moral view of how the world should be governed nor make you a god to decide for the rest of us.
I think this kind of undue influence (money in politics) is what is driving some of the back-lash against [neo]liberal democracy. So many of the "[neo]liberal" proponents of an open society, like George Soros and Bill Gates, seem to have an inordinate power to effect political outcomes because of their money.
The making of such huge amounts of money is not done with any charitable purpose. Only later, does charity come to mind.
Karekin USA July 17Soros is an enemy of the middle and working classes in America. Yes, a billion people around the world are better off because of the forces of "globalization" (this total most definitely includes Soros himself), but millions of Americans have suffered economically as a result. GATT, NAFTA and the entire alphabet soup of trade deals have lined the pockets of the globalists, while grinding the fortunes of U.S. working and middle class laborers into dust.
Tim DC area July 17 Times PickGreat article. Now, more than ever, American politics is defined by money, so it's important to understand how it is used in that context by those who have it. At this juncture, I think the American people deserve to see an expose of all those millionaires and billionaires who have and continue to support Trump. It's only fair, to lay the money trail on the table, on all sides, for everyone to see.
Samuel Spade Huntsville, al July 17What about the devastating effects that free trade and globalization have had on the spread of inequality throughout the world... Huge corporations consistently use "free trade" or globalization as an excuse to offer the lowest possible wages, and move manufacturing to places with the least environmental protections and human rights.
Immigration policies are also sometimes used in ways to suppress wages, and even more worse, enacted with very little thought given to assimilation. Most of the poorer areas, or ghettoes surrounding Paris for example are populated with huge numbers of Muslim immigrants that face extremely daunting odds of fully assimilating into French culture.
While the wealthier (sometimes elite [neo]liberals) Parisians almost certainly live in gated or posh neighborhoods with hardly any immigrants as their neighbors. Despite the generous financial support Soros (and some other elites) gives to human rights causes, he rarely outright discusses some of these problems associated with free trade, globalization and mass immigration. These seeming hypocrisies and inconsistencies then become much easier fodder for those of Orban's ilk to manipulate and ultimately consolidate power.
Ivory Tower Colorado July 17Soros didn't bet on Democracy, he bet on his version of it which he tried to buy through individual politicians on the take and the Democratic Party. Better he quit manipulating pols and gave his money to charity.
Concerned EU Resident Germany July 17First, Hungary is not xenophobic, they merely want to protect their culture. Second, George Soros wants plenty of wealth for him and his family, yet he wants those of us in the middle class to dive up our meager assets with the world's poorest. Third, his personal wealth has often been generated by destroying currencies and the middle class who owns those currencies. Fourth, he promotes open borders without consulting the citizenry of said borders as to their opinion regarding their own national sovereignty. Our world would be a much better place without George Soros.
geezer117 Tennessee July 17Soros is a criminal by any other name. He hedged against the UK Pound 20 years ago, and earned $1B. He earned billions by manipulating the market. With his profits he wanted to create his own society where his money could be used to buy politicians and pass legislation according to his one man agenda. He's selfish, an egomaniac, and dangerous.
Rose Philadelphia July 17Soros employs his vast wealth to create the society he dreams of, regardless of what the rest of us want. When the democratic process veers away from his vision, he uses the power of his wealth to steer it back.
So he's just another wealthy and powerful elite trying to remake the world as he prefers it. Such arrogance!
Jonas Seattle July 17Sucking money out of the world's economies so that he can direct it as HE sees fit does not make a man great. Rather, I would argue that such actions contributed to the rise of both Brexiteers and Trumpsters.
If Soros really wants to contribute to society, he would lobby for financial industry reform - less favorable tax treatment for hedge funds (what value do they really provide to society) and a transaction tax on trades to reduce speculation. Then fight for minimum wage increases.
Peter Albany. NY July 17This is a horrifying interview and does not improve the image of George Soros. "My ideology is nonideological," he says while spending billions on politics, which he defines as "In politics, you are spinning the truth, not discovering it." He describes Obama as his greatest disappointment because Obama "closed the door on me," as in he expected Obama should work with him and take his advice. Soros uses his billions to fund politicians and meddle in elections... this is a man who enjoys influencing and manipulating politics and becomes frustrated when his efforts backfire or are not successful.
Marian Maryland July 17This man is the absolute worst! His no borders policy has done more to hurt Europe then Russia ever could. The Soros gang has zero respect and tolerance for nation-state sovereignty and local governance. Talk about a global elite! He and his gang epitomize that arrogance.
Al Nino Hyde Park NY July 17George Soros bet big on open borders,one world governance and destroying the working class through unfair trade agreements. Yes he appears to be losing. Thank God for small favors.
Charles Becker Sonoma State University July 17It cracks me up to read these type of article in the NYT and then read another story in the NYT about how if you can pay the money you can have yourself a private waiting area in a major airport to separate yourself from the chaos of the masses in the public waiting areas. Maybe democracy wouldn't be in trouble around the world if it worked as well for the "slobs" in the public waiting areas as it did for those in the exclusive waiting rooms. This is globalization in a nutshell. It works great for the rich, not so well for the rest of us slobs. This is a government of the rich people, by the rich people, for the rich people. The slobs realise their government doesn't really care that their jobs are disapearing and their standard of living is going down.
John Medina Holt July 17I am not interested in windfall investing profits. Soros is *not* my hero: http://www.businessinsider.com/how-george-soros-broke-the-bank-of-thaila... . Wretched.
Richard L. Wilson Moscow, Russia July 17To say that George Soros is funding [neo]liberal democracy is a misnomer. What Soros is funding is open borders. Where national interests are set aside, global interests prevail. This is precisely what George Soros is advocating. Tired of having to face multitude regulatory systems in his effort to build a global financial empire, Soros is quite right in discerning that a borderless, global regulatory system would increase his financial power exponentially. Nations are right to resist the encroachment of Soros because global interests, by definition, are not local interests. Nationalism, so loathed by Soros and his open border lackeys, serves as a check and balance on men like Soros who would be god and would dictate to the world from some point of central governance what their truth and value should be. George Soros and his globalist kin should be resisted. The true threat to global interests is not nationalism, it is globalism.
elizabeth renant new mexico July 17Soros, and American [neo]liberalism, economic and social [neo]liberalism championed by Soros and the NYT, is in its death throes. Call us fascists, totalitarians, racists--- understand clearly: we do not care. Europe is waking up. [neo]liberalism is close to being dead. No spectres or phantoms are haunting Europe. Blood is standing up and answering our ancestors.We are not commodoties, consumers, meat for your wars. You have attacked us, belittled us, turned our queen of continents into latrines of filth. You, American [neo]liberalism, have destroyed us.Now, we take our nations back.
Larry Left Chicago's High Taxes July 17It's amusing to read phrases like "nationalism and tribalism are resurgent". It never does to underestimate tribalism; as long as groups feel safe they are tolerant. But when groups feel threatened, tribalism rears up in what is not so much a resurgence but more like an awakening from a nap.
The older cultures of Europe are waking up from a nap and realizing that unless they reassess a few long-held assumptions, they will eventually be ethnically diminished and culturally pressured.
Denmark has banned the burka and legislated some of the harshest migration, immigration, asylum, and naturalization laws in Europe. It is implementing laws to ensure integration, including stopping benefits to families whose children are not integrating. Do the author and Mr. Soros think that Denmark exercising control over its future demographics and preserving its culture are malign?
The Danes some years ago elected the Danish People's Party to significant power; the DPP is often referred to as a far right party, but is a typical left-wing party in everything except pushing Denmark toward "multiculturalism".
Sweden's centre-left government, on the other hand, brought in hundreds of thousands of Third World immigrants and then refused even to admit, let alone discuss, the glaring problems with integration within its immigrant community.
Result: the Sweden Democrats, a bona fide neo-Nazi party, are set to do extremely and alarmingly well in Sweden's September elections.
Yes - in Sweden.
Burton Austin, Texas July 17This super-rich elitist from Hungary is trying to buy American democracy and reshape it in his image regardless of what We The People want. And the Democrats are on his payroll and totally owned by this foreign agent!
Ned Flarbus Berkeley July 17Soros' flaw is that he only tolerates centralized socialist democracy. He cannot stand the idea of democracy in the form of a federal republic with a weak central government. Interestingly, he made his billions as a predatory capitalist now he turns on capitalism. He also exhibits a particularly vicious elitism: No one should be allowed to own guns except his private security guards. He knows that umarmed men are always someone's slaves.
Philly Expat July 17Soros is a hypocrite who did one thing and is now out to create a legacy. All is shows is he is driven by both greed and ego. His blatant hypocrisy probably did more harm than good - common denominator, it's always about him. Hey Soros, don't do us plebes any more favors, ok?
David Brisbane July 17Democracy is alive and well, regardless of what Soros thinks. He does not represent democracy, he was never been elected to any public office. He represents open borders mass migration, as the name of one of his NGOs implies, Open Society Foundation. Brexit voters, and other voters across the west are increasingly voting against his philosophy. Voters in the US, Hungary, Poland, Czech Republic, Italy, Slovenia, etc, have democratically chosen as their leaders conservative controlled borders leaders, and to underscore, all were elected via the democratic process.
Open Borders and globalism that Soros is pushing is increasingly being rejected in voting booths in the EU and the US.
It is hardly undemocratic to increasingly vote against what Soros is selling – chaotic mass migration made possible by open borders.
He represents [neo]liberal democracy, and voters increasingly favor conservative democracy.
idimalink usa July 17George Soros is the epitome of corruption – penetration and distortion of political process by obscene wealth. It does not matter what his true intentions are – he can say whatever he wants but we will never know for sure. And stop calling that "philanthropy".
Red Cross and Salvation Army is philanthropy. What Soros is doing is imposing his personal political beliefs and ideas on everybody by buying political influence with his money - that is called "corruption" pure and simple.
Sure, he is not the only one doing that, but he is the one doing that most overtly and blatantly. He seems to relish being the face of the elitist disregard for the masses. What he does is not democracy promotion - it is the exact opposite – democracy destruction. It is good to know that he is failing in that effort.
Jose Pardinas Collegeville, PA July 18Neoliberalism has failed to improve democratic governance and reduced distribution of wealth, just as leftists predicted. Soros benefitted financially, which has increased his privilege to participate in governance voters cannot achieve. Despite Soros' wealth, successfully manipulating currency markets does not easily transfer to manipulating electorates. Even if Soros believes his projects would produce good governance, he lacks the ability to convince voters what is in their best interests.
I am elated to hear that George Soros might be losing.
What pharaonic globalist plutocrats like him mean by "Liberal Democracy" encompasses a sinister set of objectives. Prominent among which are these two:
1). Full support for neocon/neoliberal destabilization, confrontation, and military interventionism.
2). The destruction of borders, nations, and cultures -- particularly Western Culture here and in Europe.Soros and his peers want unhindered unlimited access to cheap Third World labor as well as to have complete control over the entire global economy. To his class nationalism and culture are speed bumps on the way to those self-serving goals.
|
|
|
Aug 04, 2018 | russia-insider.com
Within four weeks they bought $6.5 billion and transferred most of it to foreign banks. [8] Most of the rest of IMF loan was a stealth bailout for western financial institutions which had some $200 billion worth of loans and investments in Russia. The banks feared the prospect of Russian default which would leave them with crippling losses. These risks became even more acute in the aftermath of the 1997 East Asian financial crisis that would engulf Russia in 1998.
In a testimony before the U.S. Congress, veteran investor Jim Rogers characterized IMF's assistance to Russia as follows: " The activities of the organization are gussied up in sanctimonious prose about aiding the poor and raising the living standards of the third world. Don't be fooled. These bailouts are really about protecting interests of Chase Manhattan, J.P. Morgan, and Fidelity Investments ." [9]
In addition to loading Russia up with unproductive debt, IMF also engineered Russia's hyperinflation and liquidity crisis. After eliminating price controls, IMF obliged Russia to maintain the ruble as the common currency for all Soviet Union successor states, giving each of the 15 new countries the incentive to issue ruble credits for their own benefit while fueling inflation for all others. Sachs reported that he strenuously argued with the IMF against this measure but " for inexplicable reasons, " he was consistently rebuked.
The result was a one-year delay in the introduction of national currencies for the former Soviet republics, pushing Russia into hyperinflation and needlessly prolonging its economic depression. At this same time, the IMF engineered Russia's staggering liquidity crisis that made it almost impossible for enterprises to pay their suppliers and workers. Under IMF's dictate, Russian economy struggled along on less than one sixth of the currency required to operate an economy of its size.
The extent of IMF's iron-fisted control over Russian economy was exemplified in a letter from the IMF's representative Yusuke Horaguchi to Russia's central bank chairman Sergei Dubinin . The letter specified the precise schedule of Russia's ruble supply along with " harshly worded " instructions regarding bank credits, the state budget, energy policy, price levels, trade tariffs and agricultural policies. Horaguchi's letter even included a warning that any acts of the parliament contravening the IMF mandates would be vetoed by president Yeltsin. [10]
It is clear that shock "therapy" was little more than a relentless, cruel strangulation of Russia's economy to facilitate looting of her vast industrial and resource wealth . Nonetheless, most Western-published analyses of this episode tended to treat it as failure of good intentions. While lamenting the outcomes and certain questionable practices, most analysts essentially attribute the failure of Russian transition to honest errors, Russia's endemic corruption, and perhaps inexperience in many of the drama's protagonists.
Goldman Marshall of Harvard and the Council of Foreign Relations wrote: " To be sure, there were unsettling reports of shady dealings during the takeovers, but most observers explained them away as inevitable side effects of such a far-reaching transformation. "Naturally, Marshall fails to detail how or where he polled these "most observers," but his message to the readers is unmistakable: move along folks, there's nothing to see here – especially pay no attention to the fact that many of those thousands of Westerners who came to Russia " for the best of reasons ," including Bill Browder , Andrei Schleifer and Jonathan Hay , [12] returned from Russia as multi-millionaires. Financial reporter Anne Willamson , who covered Russia for the New York Times and Wall Street Journal rightly remarked in her Congressional testimony that, " Americans, who thought their money was helping a stricken land, have been dishonored; and the Russian people who trusted us are now in debt twice what they were in 1991 and rightly feel themselves betrayed. "
[12] During his time managing the HIID's Moscow operation, Andrei Schleifer and Jonathan Hay took advantage of their position and relationships to make personal investments in Russia. An investigation by the FBI and U.S. Justice Department found evidence of fraud and money laundering by Harvard's consultants. In 2004, Schleifer was found guilty of fraud and he agreed to pay a $31 million fine to settle the case. Not only did Harvard University persist in defending Schleifer over the 8 years of investigations and trials, it paid the bulk of Schileifer's fine and kept him on university's faculty.
|
|
|
Jul 24, 2018 | www.unz.com
Greg Bacon , Website July 24, 2018 at 7:43 am GMT
The Alarmist , July 24, 2018 at 10:37 am GMT" American politicians like Senators John McCain, Lindsay Graham, Ben Cardin and ex-Senator Joe Lieberman "
American? I beg to differ. All of those turncoats serve their Master Israel and kiss the nether regions of those TBTF Wall Street Casinos.
Browder is one of those nine Russian oligarchs -- eight of whom are Jews -- who stole hundreds of billions from Russia when it was decompressing from being the USSR, helped by the drunken buffoon Yeltsin and a battery of Wall Street financial sharpies who also filled their pockets.
Watch the tough guy Browder run like a scared bunny rabbit in NYC from a process server.
Browder needs to be arrested by Interpol, tried, convicted and spend the rest of his sorry life in a Super Max prison for his thefts, frauds and helping to poison the relationship between the USA & Russia, in an effort to save his sorry ass from prosecution.
geokat62 , July 24, 2018 at 11:18 am GMT"Yeltsin had won a fraudulent election in 1996 supported by the oligarch-controlled media and by President Bill Clinton, who secured a $20.2 billion IMF loan that enabled him to buy support. Today we would refer to Clinton's action as "interference in the 1996 election," but at that time a helpless and bankrupt Russia was not well placed to object to what was being done to it."
[emphasis mine]
So Mother Russia was raped, and by Bill Clinton, of all people. Where is the outrage? #MeToo
@Greg BaconAnonymous lurker , July 24, 2018 at 12:00 pm GMTBrowder needs to be arrested by Interpol
Although I posted this comment under another thread, I think it bears repeating here (especially relevant to your point is the bolded part):
I think debunking the vulture capitalist Bill Browder's false claim of being, of all things, a human rights advocate is the key to unraveling the Russia-gate hoax. I also think the following information goes a long way in doing that:
1. Nekrasov's documentary, The Magnitsky Act: Behind The Scenes, now available for viewing
2. Alex Krainer's The Killing of William Browder, now available online; and
3. Bill Browder's Previzon deposition in which he claims "I can't remember" at least 50 times and answers "I don't know" fully 211 times.
Notwithstanding these facts, it appears Mr. Browder is an untouchable. The Russians have issued a Red Notice at least six times and he has managed to walk away scot free on each occasion.
The zinger was when the Senate Judiciary Committee invited him to testify as an expert witness against Fusion GPS, arguing that it should have registered under FARA because it was working on behalf of a foreign government, in this case the Russian. The irony of this scene was incredible. The hallowed chamber in which this inquiry took place is completely bought and paid for by The Lobby but not a peep about having it register under FARA. Totally surreal!
An interesting thing about this that has gone almost completely unreported is that HSBC quietly held a series of closed-door meetings with Russian authorities earlier this year regarding the tax fraud charges leveled at Browder and his businesses (HSBC jointly managed Hermitage) and decided to pay up some of the cash he illegally siphoned out of the country (22 million dollars I believe, so a drop in the ocean given the scale of his endeavors, but it's something.)Anonymous [128] Disclaimer , July 24, 2018 at 12:11 pm GMT"Bill Browder declined to comment" according to one of the few articles on the matter.
Isn't all of that more or less tantamount to an admission of guilt?
Questions I have:Johnny Smoggins , July 24, 2018 at 1:04 pm GMT(1) Why is he so protected?
(2) How does a respectable congress pass a law based solely on the testimony of someone convicted of a crime by another country? No jury in the world would reach a verdict based solely on the word of a convict, without it being substantiated by numerous pieces of other circumstantial and direct evidence.
(3) Even if he paid everyone oodles of money and brought a thousand lawsuits, why would gazillionaire corporations cave in to his demands to ban books, movies, organizations, etc.?
There is something more powerful about Bill Browder than just his pile of money.
You'd think that a man who gave up his US citizenship to dodge his tax bill would be seen as a villain, not defended by presidents and congressmen.Andrei Martyanov , Website July 24, 2018 at 1:24 pm GMT@AnonymousAnatoly Karlin , Website July 24, 2018 at 1:28 pm GMTHow does a respectable congress pass a law based solely on the testimony of someone convicted of a crime by another country?
US Congress has an approval rating slightly above that of Al Qaeda and Ted Bundy.
https://www.statista.com/statistics/207579/public-approval-rating-of-the-us-congress/
In fact, most (not all) US lawmakers long ago became a euphemism for incompetence, corruption and lies. So, no -- modern US Congress is not respectable by people and numbers reflect that. Hopefully, sometime in the future, some honorable and loyal to their country people will make it there.
Couple of other standard narrative-critical articles on the Magnitsky Affair:John Burns, Gettysburg Partisan , July 24, 2018 at 2:30 pm GMT* kovane: Sergei Magnitsky, Bill Browder, Hermitage Capital Management and Wondrous Metamorphoses
* Lucy Komisar: The Man Behind the Magnitsky Act Did Bill Browder's Tax Troubles in Russia Color Push for Sanctions?
Can someone help me remember the names of those 9 oligarchs?These are the ones I remember:
1) Anatoly Chubais
2) Browder
3) Boris Berezovsky
4) Mikhail Khodorkovsky
5) Vladimir GusinskyWho were the others? Thanks.
Of these 5, Chubais remained in Russia but the others fled. Chubais was the one who was instrumental in starting the loans-for-shares scheme. My understanding is that those who fled are real scum, since Putin offered all oligarchs the chance to keep their money so long as they avoided politics. Most vulture capitalists agreed to this arrangement, but the worst of the Jewish oligarchs were too greedy and lustful to give in. So I have heard, anyway.
|
|
|
Jul 18, 2018 | www.zerohedge.com
Creative_Destruct -> King of Ruperts Land Tue, 07/17/2018 - 10:23 Permalink
" The US fabricated evidence to start the Vietnam war and the US fabricated WMD talk on the second war in Iraq. US intelligence had no idea the Berlin Wall was about to fall. The US meddled in Russia supporting a drunk named Yeltsin because we erroneously thought we could control him."
YUP! AMEN.
It's amusing to me that the Leftist's NOW have a blind-faith trust in government, whereas during the Vietnam war, and at the start of the Iraq war the opposite was (justifiably) the case.
And remember, the [neoliberal] Left was all OVER how we manipulated Russia into an Oligarchy:
|
|
|
May 25, 2018 | www.paulcraigroberts.org
This is the lecture I would have given if I had been able to accept the invitation to address the St. Petersburg International Economic Forum in Russia this weekend.
Executive Summary:
From the standpoint of Russia's dilemma, this is an important column. Putin's partial impotence via-a-vis Washington is due to the grip that neoliberal economics exercises over the Russian government. Putin cannot break with the West, because he believes that Russian economic development is dependent on Russia's integration within the Western economy. That is what neoliberal economics tells the Russian economic and financial establishment.
Everyone should understand that I am not a pro-Russian anti-American. I am anti-war, especially nuclear war. My concern is that the inability of the Russian government to put its foot down is due to its belief that Russian development, despite all the talk about the Eurasian partnership and the Silk Road, is dependent on being integrated with the West. This totally erroneous belief prevents the Russian government from any decisive break with the West. Consequently, Putin continues to accept provocations in order to avoid a decisive break that would cut Russia off from the West. In Washington and the UK this is interpreted as a lack of resolve on Putin's part and encourages an escalation in provocations that will intensify until Russia's only option is surrender or war.
If the Russian government did not believe that it needed the West, the government could give stronger responses to provocations that would make clear that there are limits to what Russia will tolerate. It would also make Europe aware that its existence hangs in the balance. The combination of Trump abusing Europe and Europe's recognition of the threat to its own existence of its alignment with an aggressive Washington would break the Western alliance and NATO. But Putin cannot bring this about because he erroneously believes that Russia needs the West.
If the neoconservatives had self-restraint, they would sit back and let America's Fifth Column -- Neoliberal Economics -- finish off Russia for them. Russia is doomed, because the country's economists were brainwashed during the Yeltsin years by American neoliberal economists. It was easy enough for the Americans to do. Communist economics had come to naught, the Russian economy was broken, Russians were experiencing widespread hardship, and successful America was there with a helping hand.
In reality the helping hand was a grasping hand. The hand grasped Russian resources through privatization and gave control to American-friendly oligarchs. Russian economists had no clue about how financial capitalism in its neoliberal guise strips economies of their assets while loading them up with debt.
But worse happened. Russia's economists were brainwashed into an economic way of thinking that serves Western imperialism.
For example, neoliberal economics exposes Russia's currency to speculation, manipulation, and destabilization. Capital inflows can be used to drive up the value of the ruble, and then at the opportune time, the capital can be pulled out, dropping the ruble's value and driving up domestic inflation with higher import prices, delivering a hit to Russian living standards. Washington has always used these kind of manipulations to destabilize governments.
Neo-liberal economics has also brainwashed the Russian central bank with the belief that Russian economic development depends on foreign investment in Russia. This erroneous belief threatens the very sovereignty of Russia. The Russian central bank could easily finance all internal economic development by creating money, but the brainwashed central bank does not realize this. The bank thinks that if the bank finances internal development the result would be inflation and depreciation of the ruble. So the central bank is guided by American neoliberal economics to borrow abroad money it does not need in order to burden Russia with foreign debt that requires a diversion of Russian resources into interest payments to the West.
As Michael Hudson and I explained to the Russians two years ago, when Russia borrows from the West, the US for example, and in flow the dollars, what happens to the dollars? Russia cannot spend them domestically to finance development projects, so where do the dollars go? They go into Russia's foreign exchange holdings and accrue interest for the lender. The central bank then creates the ruble equivalent of the borrowed and idle dollars and finances the project. So why borrow the dollars? The only possible reason is so the US can use the dollar debt to exercise control over Russian decision making. In other words, Russia delivers herself into the hands of her enemies.
- https://www.paulcraigroberts.org/2016/09/28/can-russia-learn-from-brazils-fate-paul-craig-roberts-and-michael-hudson/
- https://www.paulcraigroberts.org/2016/08/10/russias-weakness-is-its-economic-policy-paul-craig-roberts-and-michael-hudson/
- https://www.paulcraigroberts.org/2016/02/08/privatization-is-the-atlanticist-strategy-to-attack-russia-paul-craig-roberts-and-michael-hudson/
Indeed, it is the Russian government's mistaken belief that Russian economic development is dependent on Russia being included as part of the West that has caused Putin to accept the provocations and humiliations that the West has heaped upon Russia. The lack of response to these provocations will eventually cause the Russian government to lose the support of the nationalist elements in Russia.
Putin is struggling to have Russia integrated into the Western economic system while retaining Russia's sovereignty (an unrealistic goal), because Putin has been convinced by the element in the Russian elite, which had rather be Western than Russian, that Russia's economic development depends on being integrated into the Western economy. As the neoliberal economic elite control Russia's economic and financial policy, Putin believes that he has to accept Western provocations or forfeit his hopes for Russian economic development.
Russian economists are so indoctrinated with neoliberal economics that they cannot even look to America to see how a once great economy has been completely destroyed by neoliberal economics.
The US has the largest public debt of any country in history. The US has the largest trade and budget deficits of any country in history. The US has 22 percent unemployment, which it hides by not counting among the unemployed millions of discouraged workers who, unable to find jobs, ceased looking for jobs and are arbitrarily excluded from the measure of unemployment. The US has a retired class that has been stripped of any interest payment on their savings for a decade, because it was more important to the Federal Reserve to bail out the bad loans of a handful of "banks too big to fail," banks that became too big to fail because of the deregulation fostered by neoliberal economics. By misrepresenting "free trade" and "globalism," neoliberal economics sent America's manufacturing and tradeable professional skill jobs abroad where wages were lower, thus boosting the incomes of owners at the expense of the incomes of US wage-earners, leaving Americans with the lowly paid domestic service jobs of a Third World country. Real median family income in the US has been stagnant for decades. The Federal Reserve recently reported that Americans are so poor that 41 percent of the population cannot raise $400 without selling personal possessions.
Young Americans, if they have university educations, begin life as debt slaves. Currently there are 44,200,000 Americans with student loan debt totalling $1,048,000,000,000 -- $1.48 trillion! https://studentloanhero.com/student-loan-debt-statistics/
In the US all 50 states have publicly supported universities where tuition is supposed to be nominal in order to encourage education. When I went to Georgia Tech, a premier engineering school, my annual tuition was less than $500. Loans were not needed and did not exist.
What happened? Financial capitalism discovered how to turn university students into indentured servants, and the university administrations cooperated. Tuitions rose and rose and were increasingly allocated to administration, the cost of which exploded. Today many university administrations absorb 75% of the annual budget, leaving little for professors' pay and student aid. An obedient Congress created a loan program that ensnares young American men and women into huge debt in order to acquire an university education. With so many of the well-paying jobs moved offshore by neoliberal economics, the jobs available cannot service the student loan debts. A large percentage of Americans aged 24-34 live at home with parents, because their jobs do not pay enough to service their student loan debt and pay an apartment rent. Debt prevents them from living an independent existence.
In America the indebtedness of the population produced by neoliberal economics -- privatize, privatize, deregulate, deregulate, indebt, indebt -- prevents any economic growth as the American public has no discretionary income after debt service to drive the economy. In America the way cars, trucks, and SUVs are sold is via zero downpayment and seven years of loans. From the minute a vehicle is purchased, the loan obligation exceeds the value of the vehicle.
The Wall Street Journal reports that Mike Meru, a dentist earning $225,000 annually, has $1,060,945.42 in student loan debt. He pays $1,589.97 monthly, which is not enough to cover the interest, much less reduce the principal. Consequently, his debt from seven years at the University of Southern California grows by $130 per day. In two decades, his loan balance will be $2 million. https://www.wsj.com/articles/mike-meru-has-1-million-in-student-loans-how-did-that-happen-1527252975
If neoliberal economics does not work for America, why will it work for Russia? Neoliberal economics only works for oligarchs and their institutions, such as Goldman Sachs, who are bankrolled by the central bank to keep the economy partially afloat. Washington will agree to Russia being integrated into the Western system when Putin agrees to resurrect the Yeltsin-era practice of permitting Western financial institutions to strip Russia of her assets while loading her up with debt.
I could continue at length about the junk economics, to use Michael Hudson's term, that is neoliberal economics. The United States is failing because of it, and so will Russia.
John Bolton and the neocons should just relax. Neoliberal economics, which has the Russian financial interests, the Russian government and apparently Putin himself in its grip, will destroy Russia without war.
|
|
|
May 27, 2018 | www.defenddemocracy.press
Turning on Russia 11/05/2018
In this first of a two-part series, Paul Fitzgerald and Elizabeth Gould trace the origins of the neoconservative targeting of Russia.
By Paul Fitzgerald and Elizabeth Gould
April 29.2018The German newsmagazine Der Spiegel last September reported that, "Stanley Fischer, the 73–year-old vice chair of the U.S. Federal Reserve, is familiar with the decline of the world's rich. He spent his childhood and youth in the British protectorate of Rhodesia before going to London in the early 1960s for his university studies. There, he experienced first-hand the unravelling of the British Empire Now an American citizen, Fischer is currently witnessing another major power taking its leave of the world stage the United States is losing its status as a global hegemonic power, he said recently. The U.S. political system could take the world in a very dangerous direction "
With the collapse of the Soviet Union in 1991 and the creation of the so called Wolfowitz Doctrine in 1992 during the administration of George Herbert Walker Bush, the United States claimed the mantle of the world's first and only. Unipower with the intention of crushing any nation or system that would oppose it in the future. The New World Order, foreseen just a few short years ago, becomes more disorderly by the day, made worse by varying degrees of incompetence and greed emanating from Berlin, London, Paris and Washington.
As a further sign of the ongoing seismic shocks rocking America's claim to leadership, by the time Fischer's interview appeared in the online version of the Der Spiegel , he had already announced his resignation as vice chair of the Federal Reserve -- eight months ahead of schedule. If anyone knows about the decline and fall of empires it is the "globalist" and former Bank of Israel president, Stanley Fischer. Not only did he experience the unravelling of the British Empire as a young student in London, he directly assisted in the wholesale dismantling of the Soviet Empire during the 1990s.
As an admitted product of the British Empire and point man for its long term imperial aims, that makes Fischer not just empire's Angel of Death, but its rag and bone man.
Alongside a handful of Harvard economists led by Jonathan Hay, Larry Summers, Andrei Shleifer, and Jeffry Sachs, in the "Harvard Project," plus Anatoly Chubais, the chief Russian economic adviser, Fischer helped throw 100 million Russians into poverty overnight – privatizing, or as some would say piratizing – the Russian economy. Yet, Americans never got the real story because a slanted anti-Russia narrative covered the true nature of the robbery from beginning to end.
As described by public policy scholar and anthropologist Janine R. Wedel in her 2009 book Shadow Elite: "Presented in the West as a fight between enlightenment Reformers trying to move the economy forward through privatization, and retrograde Luddites who opposed them, this story misrepresented the facts. The idea or goal of privatization was not controversial, even among communists the Russian Supreme Soviet, a communist body, passed two laws laying the groundwork for privatization. Opposition to privatization was rooted not in the idea itself but in the particular privatization program that was implemented, the opaque way in which it was put into place, and the use of executive authority to bypass the parliament."
Intentionally set up to fail for Russia and the Russian people under the cover of a false narrative, she continues "The outcome rendered privatization 'a de facto fraud,' as one economist put it, and the parliamentary committee that had judged the Chubais scheme to 'offer fertile ground for criminal activity' was proven right."
If Fischer, a man who helped bring about a de facto criminal-privatization-fraud to post-empire Russia says the U.S. is on a dangerous course, the time has arrived for post-empire Americans to ask what role he played in putting the U.S. on that dangerous course. Little known to Americans is the blunt force trauma Fischer and the "prestigious" Harvard Project delivered to Russia under the leadership of Boris Yeltsin during the 1990s. According to The American Conservative's James Carden "As the Center for Economic and Policy Research noted back in 2011 'the IMF's intervention in Russia during Fischer's tenure led to one of the worst losses in output in history, in the absence of war or natural disaster.' Indeed, one Russian observer compared the economic and social consequences of the IMF's intervention to what one would see in the aftermath of a medium-level nuclear attack."
Neither do most Americans know that it was President Jimmy Carter's national security advisor Zbigniew Brzezinski's 1970s grand plan for the conquest of the Eurasian heartland that boomeranged to terrorize Europe and America in the 21 st century. Brzezinski spent much of his life undermining the Communist Soviet Union and then spent the rest of it worrying about its resurgence as a Czarist empire under Vladimir Putin. It might be unfair to say that hating Russia was his only obsession. But a common inside joke during his tenure as the President's top national security officer was that he couldn't find Nicaragua on a map.
If anyone provided the blueprint for the United States to rule in a unipolar world following the Soviet Union's collapse it was Brzezinski. And if anyone could be said to represent the debt driven financial system that fueled America's post-Vietnam Imperialism, it's Fischer. His departure should have sent a chill down every neoconservative's spine. Their dream of a New World Order has once again ground to a halt at the gates of Moscow.
Whenever the epitaph for the abbreviated American century is written it will be sure to feature the iconic role the neoconservatives played in hastening its demise. From the chaos created by Vietnam they set to work restructuring American politics, finance and foreign policy to their own purposes. Dominated at the beginning by Zionists and Trotskyists, but directed by the Anglo/American establishment and their intelligence elites, the neoconservatives' goal, working with their Chicago School neoliberal partners, was to deconstruct the nation-state through cultural co-optation and financial subversion and to project American power abroad. So far they have been overwhelmingly successful to the detriment of much of the world.
From the end of the Second World War through the 1980s the focus of this pursuit was on the Soviet Union, but since the Soviet collapse in 1991, their focus has been on dismantling any and all opposition to their global dominion.
Pentagon Capitalism
Shady finance, imperial misadventures and neoconservatism go hand in hand. The CIA's founders saw themselves as partners in this enterprise and the defense industry welcomed them with open arms. McGill University economist R.T. Naylor, author of 1987's Hot Money and the Politics of Debt , described how "Pentagon Capitalism" had made the Vietnam War possible by selling the Pentagon's debt to the rest of the world.
"In effect, the US Marines had replaced Meyer Lansky's couriers , and the European central banks arranged the 'loan-back,'" Naylor writes. "When the mechanism was explained to the late [neoconservative] Herman Kahn – lifeguard of the era's chief 'think tank' and a man who popularized the notion it was possible to emerge smiling from a global conflagration – he reacted with visible delight. Kahn exclaimed excitedly, 'We've pulled off the biggest ripoff in history! We've run rings around the British Empire.'" In addition to their core of ex-Trotskyist intellectuals early neoconservatives could count among their ranks such establishment figures as James Burnham, father of the Cold War Paul Nitze, Senator Daniel Patrick Moynihan, Senator Henry "Scoop" Jackson, Jeane Kirkpatrick and Brzezinski himself.
From the beginning of their entry into the American political mainstream in the 1970s it was known that their emergence could imperil democracy in America and yet Washington's more moderate gatekeepers allowed them in without much of a fight.
Peter Steinfels' 1979 classic The Neoconservatives: The men who are changing America's politics begins with these fateful words. "THE PREMISES OF THIS BOOK are simple. First, that a distinct and powerful political outlook has recently emerged in the United States. Second, that this outlook, preoccupied with certain aspects of American life and blind or complacent towards others, justifies a politics which, should it prevail, threatens to attenuate and diminish the promise of American democracy."
But long before Steinfels' 1979 account, the neoconservative's agenda of inserting their own interests ahead of America's was well underway, attenuating U.S. democracy, undermining détente and angering America's NATO partners that supported it. According to the distinguished State Department Soviet specialist Raymond Garthoff, détente had been under attack by right-wing and military-industrial forces ( led by Senator "Scoop" Jackson ) from its inception. But America's ownership of that policy underwent a shift following U.S. intervention on behalf of Israel during the 1973 October war. Garthoff writes in his detailed volume on American-Soviet relations Détente and Confrontation , "To the allies the threat [to Israel] did not come from the Soviet Union, but from unwise actions by the United States, taken unilaterally and without consultation. The airlift [of arms] had been bad enough. The U.S. military alert of its forces in Europe was too much."
In addition to the crippling Arab oil embargo that followed, the crisis of confidence in U.S. decision-making nearly produced a mutiny within NATO. Garthoff continues, "The United States had used the alert to convert an Arab-Israeli conflict, into which the United States had plunged, into a matter of East-West confrontation. Then it had used that tension as an excuse to demand that Europe subordinate its own policies to a manipulative American diplomatic gamble over which they had no control and to which they had not even been privy, all in the name of alliance unity."
In the end the U.S. found common cause with its Cold War Soviet enemy by imposing a cease-fire accepted by both Egypt and Israel thereby confirming the usefulness of détente. But as related by Garthoff this success triggered an even greater effort by Israel's "politically significant supporters" in the U.S. to begin opposing any cooperation with the Soviet Union, at all.
Garthoff writes, "The United States had pressed Israel into doing precisely what the Soviet Union (as well as the United States) had wanted: to halt its advance short of complete encirclement of the Egyptian Third Army east of Suez Thus they [Israel's politically significant supporters] saw the convergence of American-Soviet interests and effective cooperation in imposing a cease-fire as a harbinger of greater future cooperation by the two superpowers in working toward a resolution of the Israeli-Arab-Palestinian problem."
Copyright © 2018 Fitzgerald & Gould All rights reserved. This article first appeared on Invisible History.
Coming Next, Part 2: The post WWII global strategy of the neocons has been shaped chiefly by Russophobia against the Soviet Union and now Russia
* Paul Fitzgerald and Elizabeth Gould are the authors of Invisible History: Afghanistan's Untold Story , Crossing Zero The AfPak War at the Turning Point of American Empire and The Voice . Visit their websites at invisiblehistory and grailwerk .com
Published at consortiumnews.com
|
|
|
May 26, 2018 | www.unz.com
Sex Differences in the Adult Human Brain: Evidence from 5216 UK Biobank Participants
Stuart J Ritchie, Simon R Cox, Xueyi Shen, Michael V Lombardo, Lianne M Reus, Clara Alloza, Mathew A Harris, Helen L Alderson, Stuart Hunter, Emma Neilson, David C M Liewald, Bonnie Auyeung, Heather C Whalley, Stephen M Lawrie ,Catharine R Gale, Mark E Bastin, Andrew M McIntoshIan, J Deary.
Cerebral Cortex, bhy109, https://doi.org/10.1093/cercor/bhy109
Published: 16 May 2018https://academic.oup.com/cercor/advance-article/doi/10.1093/cercor/bhy109/4996558
The authors say:
Sex differences in the human brain are of interest for many reasons: for example, there are sex differences in the observed prevalence of psychiatric disorders and in some psychological traits that brain differences might help to explain. We report the largest single-sample study of structural and functional sex differences in the human brain (2750 female, 2466 male participants; mean age 61.7 years, range 44–77 years). Males had higher raw volumes, raw surface areas, and white matter fractional anisotropy; females had higher raw cortical thickness and higher white matter tract complexity. There was considerable distributional overlap between the sexes. Subregional differences were not fully attributable to differences in total volume, total surface area, mean cortical thickness, or height. There was generally greater male variance across the raw structural measures. Functional connectome organization showed stronger connectivity for males in unimodal sensorimotor cortices, and stronger connectivity for females in the default mode network. This large-scale study provides a foundation for attempts to understand the causes and consequences of sex differences in adult brain structure and function.
There is much to discuss here, but my attention was drawn by two phrases "considerable distributional overlap" (which in my experience means that one group is pretty different from another) and "generally greater male variance" (which agrees with most of the observations on sex differences indicating that men are leptokurtic (more variable), women more platykurtic (less variable).
Women are more at risk of dementia, depression, schizophrenia and dyslexia. Men are better than women at mental rotation tasks, and are more physically aggressive; women are more interested in people than in things, are more neurotic and more agreeable.
One of the most interesting sex differences is intelligence. Here is their introduction to the topic:
There is more to sex differences than averages: there are physical and psychological traits that tend to be more variable in males than females. The best-studied human phenotype in this context has been cognitive ability: almost universally, studies have found that males show greater variance in this trait (Deary et al. 2007a; Johnson et al. 2008; Lakin 2013; though see Iliescu et al. 2016). This has also been found for academic achievement test results (themselves a potential consequence of cognitive differences, which are known to predict later educational achievement; Deary et al. 2007b; Machin and Pekkarinen 2008; Lehre et al. 2009a, 2009b), other psychological characteristics such as personality (Borkenau et al. 2013), and a range of physical traits such as athletic performance (Olds et al. 2006), and both birth and adult weight (Lehre et al. 2009a). To our knowledge, only two prior studies have explicitly examined sex differences in the variability of brain structure (Wierenga et al. 2017; Lange et al. 1997), and no studies have done so in individuals older than 20 years. Here, we addressed this gap in the literature by testing the "greater male variability" hypothesis in the adult brain.
[]
We tested male–female differences (in mean and variance) in overall and subcortical brain volumes, mapped the magnitude of sex differences across the cortex with multiple measures (volume, surface area, and cortical thickness), and also examined sex differences in white matter microstructure derived from DT-MRI and NODDI. We tested the extent to which these differences were regionally-specific or brain-general, by adjusting them for the total brain size (or other relevant overall measurement; for instance, adjusting volume differences for total brain volume and cortical thickness differences for mean cortical thickness), and examining whether the differences found in the raw analyses were still present. We tested the extent to which these structural differences (in broad, regional, and white matter measures) mediated sex variation in scores on two cognitive tests, one tapping a mixture of fluid and crystallized reasoning skills (skills previously found to be linked to brain volumes; Pietschnig et al. 2015) and one testing processing speed (previously found to be linked to white matter microstructural differences; see Penke et al. 2012). At the functional level, we also examined large-scale organization of functional networks in the brain using resting-state fMRI functional connectivity data and data-driven network-based analyses.The study compared 2750 females (mean age = 61.12 years, SD = 7.42, range = 44.64–77.12) and 2466 males (mean age = 62.39 years, SD = 7.56, range = 44.23–76.99). These are extremely large samples, two orders of magnitude larger than the early studies in the 1980s, and way larger than many of the studies that the Press report so frequently. Consider them "Foxtrot Oscar" samples.
The first result is startling: male brains are very much bigger, a colossal 1.4 effect size. 92% of men will be above the mean for women. On average men have 117.8 cm3 more brain than women. All this extra brain must be doing something for men, you might surmise, other than just helping them perpetually contemplate the relative advantages of the more complicated positions adopted during sexual intercourse. Perhaps not. Broadly the same effect of male advantage can be found in all the brain region sub-comparisons. Male brains are both larger, and also vary more in size. Greater male variability seems a fact of nature. If there were a direct relationship between brain size and cognitive ability, there would be many, many more bright men than bright women.
The cognitive test was limited to a 13-item verbal-numerical test to be completed in 2 minutes, which ought to be enough to grade the general population. The mere notion of such a test will discomfort those citizens who regard their own intellects as more wide-ranging and multi-faceted than could ever be measured by mere earthly means, and who rank their brainpower of greater value to Western Civilization in ways that could not possibly be assayed in 120 seconds. Personally, I quail at the thought of having to subject myself to such a harsh evaluation. I mean, 13 into 120 is, let me see, well, not very long at all to solve each item. On reflection, 9 seconds to pass each question. Can such people exist?
The test might be a little crude if the purpose is to detect sex differences across the broad range of different cognitive tasks, and also a bit limited if the volunteers are, as one might expect of this database, somewhat brighter volunteers interested in contributing to science. However, these are minor quibbles. All intellects can be evaluated in 2 minutes. I like it. Here are the details:
Verbal-numerical reasoning. This test (UK Biobank data field 20016) consisted of thirteen multiple-choice items, six verbal and seven numerical. Participants responded to the items on a touch-screen computer. One of the verbal items was: "Stop means the same as: Pause/Close/Cease/Break/Rest/Do not know/Prefer not to answer". One of the numerical items was: "If sixty is more than half of seventy-five, multiply twenty-three by three. If not subtract 15 from eighty-five. Is the answer: 68/69/70/71/72/Do not know/Prefer not to answer". Participants had a two-minute time limit to answer the thirteen questions. The "prefer not to answer" option was considered as missing data for the purposes of the present analyses. The scores from the test formed a normal distribution.
Reaction Time. This test (UK Biobank data field 100032), which followed immediately after the verbal-numerical reasoning test, was modelled on the game of 'snap': participants responded by pressing a button on a button box as quickly as possible with their dominant hand whenever the symbols on two 'cards' displayed to them on the computer screen matched. The test had twelve rounds; the first four rounds were considered 'training' (or practice) rounds so were not included in the calculation of the final score, and four of the remaining rounds did not include matching symbols. Thus, the final score was calculated on the basis of the four rounds with matching symbols (the mean time in ms to press the button across these four trials was the score variable). We excluded the scores of 8 participants who had Reaction Times of 1100ms or longer. After this exclusion, the Reaction Times formed an approximately normal distribution. Note that, for analyses, we reflected the raw scores so that higher scores meant better performance (this meant that the two cognitive tests correlated positively with each other).
The choice reaction time task should be a good measure of mental alertness, though 4 out of 8 trials is on the short side. However, there is a case for saying that all reaction time tests should have only one trial. If the person responds very slowly, in real life he would be dead. That is what reaction times are for. Here are the results for the two cognitive tests:
The insert above shows: female mean, male mean, t-test, probability, d (effect size), and finally the Bayes Factor showing the probability there is a sex difference. The full results for Table 2 are in the paper.
Sure enough, Table 2 shows that the cognitive tests are only an effect size of about 0.2 in favour of men. Where did all the male brain size advantage go? 0.2 of a standard deviation works out to 3 IQ points. Nothing much, you may say, considering that the test-retest reliability of the Wechsler is 4 IQ points, but if this is a true representation of male-female differences, then we can calculate what it would mean for the male/female balance at the higher levels of ability. As you may have seen in previous posts, if men are really 3 points brighter than women, and women's standard deviation is narrower than men, say 14 rather than 15 points, then this makes a big difference at the higher reaches of intelligence.
Here are the estimates, if one assumes men have an IQ of 102, (sd 15) and women an IQ of 99, (sd 14).
At IQ 130: 69.8% men
At IQ 145: 80.3% menThe authors correctly point out that the sample, though the biggest collected for scanning, may not be a perfect representation of the population at large (though I doubt this directly affects sex differences).
This is a very substantial paper. It shows a massive sex difference in brain size of 1.4 d, and when one factors in that brain size relates to intelligence at a correlation of about 0.28, then the predicted intelligence difference will be a large 0.39 d, but the observed difference is only half that. Paradoxical. One implication is that there are sex-linked differences in brain structure and dendritic arborization which overcome pure size differences. If so, how is this balancing act achieved? Why don't all people have the smaller, more craftily wired version of the human brain, which presumably requires a smaller blood supply. On the other hand, it might be that the cognitive testing has not been wide enough, and has ignored tasks in which males have an advantage. By the way, if one sex has an advantage in one skill, this is not an error of testing, it is a triumph of testing that a real difference has been revealed.
It is possible that, in a rush to ensure that men and women's mental ability scores can be presented as equal, in general men's stronger subject areas have been under-sampled. Test producers are under pressure to minimize sexual and racial differences. This may have suppressed the size of real differences. In defence of any group who think that their specialist strong points have been ignored, we should set the sampling frame for cognitive tests as wide as possible. These points do not invalidate the findings of this fine paper on brains, but they leave open the possibility that there is a small but real male advantage in intelligence which a broader scope of tests would reveal.
|
|
|
May 20, 2018 | www.nakedcapitalism.com
The Rev Kev , May 17, 2018 at 10:39 am
johnnygl , May 17, 2018 at 11:20 amHey, I just remembered something. When I was a kid growing up everybody knew all about the mafia but all those in the know denied that there was any such thing when questioned in a court of law. It got to be a running joke how these gang bosses and members were always denying that the mafia was an actual thing.
Could it be that the neoliberals took a page out of their book and adopted the same tactic of denying the existence of neoliberalism while actively pushing it at every opportunity?
Amfortas the Hippie , May 17, 2018 at 3:35 pmAnd like the line from 'fight club', the first rule of neoliberalism is that you don't talk about it.
To extend your analogy, much like the mafia, there's a handful of shadowy law breakers who benefit from neoliberalism and a whole lot of people that suffer violence so that those benefits can flow up to that few.
this is why I keep Mario Puzo next to Adam and Karl on the econ shelf in my library. It's not so much Omerta, as gobbdeygook and wafer thin platitudes.
Like the concurrent and related "Conservative revolution"(1973-), they stole the Cell Structure from the Comintern, and bought out the competition.
I am inclined to believe that the Libertarian Party was a vehicle for this counterrevolution, too. And finally, with the DLC, they were able to buy the "opposition party" outright and here we are.
|
|
|
Apr 19, 2018 | www.unz.com
SolontoCroesus , April 18, 2018 at 9:08 pm GMT
@AnonUUUge mistake, Jimmy Dore; you should have done some homework before you elevated Jeffrey Sachs to truth-teller status. Spend a few minutes with The Saker -- William Engdah interview: http://thesaker.is/the-rape-of-russia-saker-blog-exclusive-interview/ Sache is not trustworthy.
SolontoCroesus , April 18, 2018 at 9:31 pm GMT
@SolontoCroesusSachs worked closely w/ Soros to plunder USSR/ FSU. His job now is to establish Jews/Israel/banker class, Deep State of which he's a part, and think tankers as absolutely innocent of any complicity in the destruction of Syria. He's most likely in it up to his eyeballs.
|
|
|
Apr 18, 2018 | russia-insider.com
The Rape of Russia (full transcript)
Lars Schall: Hello ladies and gentlemen. I am now connected with F. William Engdahl, who has written a new book, Manifest Destiny: Democracy as Cognitive Dissonance. Hi William.
F. William Engdahl: Hello, Lars. Good to be with you again.
LS: Great to have you with us. And first off, let me read something to you and our audience that was written by the economist Dean Baker earlier this month.
As a long-term columnist at the NYT, Thomas Friedman apparently never feels the need to know anything about the topics on which he writes. This explains his sarcastic speculation that Putin could be a CIA agent since he has done so much to hurt Russia.
For all his authoritarian tendencies, it is likely that most Russians think primarily about Putin's impact on the economy, just as is typically the case among voters in the United States. On that front, Putin has a very good record.According to data from the IMF Russia's economy had plunged in the 1990s under the Yeltsin presidency. When Putin took over in 1998, per capita income in the country had shrunk by more than 40 percent from its 1990 level. This is a far sharper downturn than the United States saw in the Great Depression. Since Putin took power its per capita income has risen by more than 115 percent, an average annual growth rate of more than 3.9 percent.
While this growth has been very unequal, that was also the case even as Russia's economy was collapsing under Yeltsin. The typical Russian has done hugely better in the last two decades under Putin than they did in the period when Yeltsin was in power.
For this reason, there are probably few Russians who would have sympathy for Friedman's speculation about Putin's ties to the CIA. The same would not be the case for Boris Yeltsin.
Now, I think this is a good starting point for our discussion William because in your book, you have a chapter entitled The Rape of Russia, the CIA's Yeltsin Coup d'état. Why do you talk about rape related to Russia?
FWE: What the US Government under George Herbert Walker Bush, Bush Senior organised together with CIA, old boy networks of his, in terms of the breaking up of the Soviet Union and the looting of the assets, this open theft, the destruction of pensions, security, the health system and everything. The only appropriate word is the rape of Russia. They just pondered anything that they could.
And what you just read from Mr. Friedman is of course horse rubbish but the real CIA asset of this whole collapse of the Soviet Union in the late 1980s was in fact Boris Yeltsin and the so called Yeltsin Family, the Yeltsin Mafia. And in my book, the Manifest Destiny book I document and detail at great lengths the relation of a handful of KGB very, very senior persons who worked with the Bush Senior old boys CIA networks in the West and their banks to create a group of oligarchs around Yeltsin, you know the famous Russian oligarchs, well, The New York Times and other Western Media portrayed them as Russian Mafia. They were kind of mafia but the real point was that they were a CIA-run mafia. They were run by the West. They betrayed their own country, their own people and literally stole billions and billions and billions of dollars of assets. And that's the reason for the title in that chapter.
LS: And Boris Yeltsin was very essential for this.
FWE: He was the key figure. He had been selected as a regional governor and brought into Moscow and a certain point Gorbachev saw him as a rising star and someone that could help with a little bit more liberal image as [unclear] was – the Russian economy was running into serious trouble in the '80s, the Star Wars of Reagan, the Nicaragua and above all the war in Afghanistan which is a CIA project with the Mujahideen, that took 10 years long that was bleeding the Soviet economy, the Soviet Union's Vietnam, as Brzezinski used to call it.
And the West, the Bush networks recruited a handful of KGB agents around Yeltsin who literally promoted Yeltsin to the top when they engineered the August 1991 fake coup. You remember, I'm sure many people remember the picture of Boris Yeltsin standing there courageously on top of a Soviet tank in front of the Russian White House or Soviet House, the Supreme Soviet building and reading a speech defying Gorbachev and so forth. Well, that was a KGB CIA-engineered coup d'état in June 1991. And through that the – this network, this corrupt network within the KGB that was working with the CIA, working with General Philip, Bob [unclear] is one of them, so called at that time the KGB brain. He was head of the KGB Fifth Directorate controlling to roll this in. And he later joined the [#inaudible 00:06:40-0#] oil and to this day he's still a member of the State Duma giving him prosecution immunity.
So, some of these people are still around after some 23, 25 years and incredibly enough but others of them have died off, have been killed, or murdered or whatever. But the operation that was done with Yeltsin, this corrupt KGB network working with the CIA financed Yeltsin's the silent seat of the presidency of the Russian Federation. And once they had their man in controlling the Russian Federation which is the largest of the former Soviet Union, the Socialist Republic, they were able to engineer through the international monetary fund that was mandated to oversee the transformation of the Soviet economy.
They engineered a complete opening up of the assets of the Russian Federation which called today the Russian Federation, the largest part of the former Soviet Union and they made it such that the Russian Federation would assume all of the debts of Ukraine, of Kazakhstan and the other socialist republics of the Soviet and all the assets, all the crucial assets that were within the Russian Federation so the aluminium Rusal that's in the headlines yesterday, the nickel, the oil, the gas, just hundreds of billions if not trillions of dollars' worth of assets that came into Yeltsin's control.
LS: But those assets were sold to a price that was rather ridiculous.
FWE: Someone estimated that that gets into the whole coupon privatisation that was set up under Yeltsin in the '90s. The coupon privatisation issued one coupon to every single Russian man, woman and child 140 million in total. And the value of those coupons was such someone estimated that the totality of Russian Soviet's Fed assets or Russian Federation assets now was equal to the value of the stock at that point of General Electric Company on the New York Stock Exchange. I mean that's just laughable. Russia had financial bankruptcy because the shock therapy, the Jeffrey Sachs and others from Harvard and elsewhere brought in, George Soros and his pals. That created bankrupt companies that couldn't stand on their own and suddenly they had no, no resources. But the assets, the assets on the ground, the nickel, the aluminium, the uranium that Hillary Clinton knows more than a little bit about them, all of these were estimated to be in the trillions of dollars. And this is what the Bush operation aimed at. And they used NGOs, they used the National Endowment for Democracy, they used, George Soros' Open Society Foundation and so forth to bring this about.
LS: You've mentioned already the coup d'etat attempt of August 1991. Highly important for things to come was something that took place in early 1991 and that was the theft of the Soviet gold. Please tell us about this.
FWE: The, under the Soviet Union, this is a very crucial point about the transition that Washington forced on the Russian Federation because Yeltsin was, I think as long as he was well-supplied with vodka he didn't protest very much. But under the Soviet system and the Russian Federation took this over, there was a state bank, not a private central bank like the Federal Reserve or the European Central Bank today but a state bank that was an entity of the Russian State apparatus and that was called the Gosbank. And a man named Viktor Gerashchenko was the chairman of Gosbank at the time of Yeltsin's early start in 1991.
And Gerashchenko made a speech around that time in November of '91 to the Russian Duma or the parliament such as it was and said, "I have to report to you ladies and gentlemen that of perhaps 3,000 tons of Gosbank state-owned gold reserves, we have an estimated less than 400 tons that we can account for." And then he had to go to tell, shock members of parliament that he had no idea what happened to the missing gold, which of course was a lie. And Gerashchenko had created right after 1989 to prepare this coup d'etat coup, which was the CIA and Bush's old boys, he had created something called [unclear] on the Channel Islands in the Island of Jersey to handle the Russian foreign currency reserves.
And the Jersey was exempt from European supervision, so this was a perfect place to hide money, dirty money or stolen money and they managed something like $37 billion between 1993 and 1998. The Gerashchenko and the Gosbank even went to the lengths of hiring a New York Financial Detective firm called the Financial CIA back then called Jules Kroll Associate. And they were told to track the Soviet gold, find out what happened to it and something like $14 billion of communist party assets that were missing as well. And the Cruel which was tied with the CIA linked AIG Insurance Group Hank Greenberg whom you remember from the 2008 to the bail out of Henry Paulson.
LS: Yes.
FEW: The Kroll Associates after a few months announced that they had no results in the attempt to find the missing Soviet Gosbank gold. Then to add insult to injury, the IMF came in and rewrote the constitution of the Russian Federation under Yeltsin and took the power of money creation just like the Federal Reserve took the power of money creation from the congress in 1913. They took the power of money creation from the state and created the Russian Federation Central Bank, the Russian Central Bank and gave it a mandate for two things. One, to control inflation and the other to create currency stability.
Now, in Russia that day that meant stability of the ruble against the US dollar. So it effectively hammer-locked the Russian money creation into the US dollar. And unfortunately that constitution amendment holds until the present day. It's one of the difficulties that Vladimir Putin has been having to try to persuade the Independent Central Bank to lower interest rates more rapidly as inflation is simply managed as a problem in Russia in the last two years.
So, they looted the gold so that there would be no stability to the ruble. If you don't have any gold-backing, then western investors are going to lack confidence which is sort of what happened. And then they began working with very select western bankers to get their money out of Russia.
LS: And instrumental to get money out of Russia were Valmet and Riggs. Can you tell us please about some crucial personnel that was employed there at Valmet and Riggs?
FWE: Valmet Riggs was kind of a fusion of a Swiss bank and Riggs Bank of Washington D. C. And Riggs Bank, this is really quite a fascinating and very little discussed aspect of the reign of Russia back in the '90s.
So you have something called Riggs Bank in Washington and they were set up decades earlier since the 1960s CIA Bay of Pigs operation, they were known as the CIA tied bank. They invested the assets of people like Marcos of the Philippines until when he was close to the CIA. And there was a former NATO Ambassador named Alton Keel and in 1989 when the Soviet KGB generals and they had a group of protégés called the 'Kids' by George Bush Senior. The protégés were in their 30s and a couple of them were in their 40s but rather young. And they were the ones who were nominated to become the oligarchs, the frontal men for taking these state assets the aluminium, the oil assets and other things and looting the Russian Federation.
And Alton Keel just as the Russians were setting up men at a bank for the oligarchs to funnel their stolen assets, de facto stolen assets, Keel went from NATO and the National Security Council to become a head of international banking of Riggs Bank in Washington and its deputy chairman.
Now, it gets even more interesting because the international banking group of Riggs included a new entity that had been created called Riggs Valmet SA in Switzerland, and Riggs Valmet was set up by a man named Jonathan J. Bush, a private banker, who just happened to be the brother of George Herbert Walker Bush. So, Bush brother and Alton Keel set up Riggs Valmet, there was a money laundering apparatus in Geneva and Riggs then through their help bought the major share in Geneva Valmet to create Riggs Valmet.
So, you have the brother of the president of the United States up to his eyeballs in this whole Yeltsin CIA money laundering operation. And then Jonathan Bush was created CEO of something called Riggs Investment in Connecticut where he lived and at that point the looting and taking of the dollar assets out of Russia was just unstoppable. It was in the billions and tens of billions of dollars.
LS: William, there is one guy who was working closely with those people and he was working on Wall Street but later on he was personally recruited by George Tenet then the Director of CIA to become the number three at the CIA, and this is Alvin Bernard "Buzzy" Krongard.
FWE: Yes. We meet "Buzzy" Krongard at Bankers Trust, which bought up Alex Brown, and Krongard became vice chairman of Bankers Trust along with another charming character named Carter Beese. And at the time of the 1998 collapse of the ruble, Krongard was formally made, as you've pointed out, number three, the executive director at the CIA under George Tenet. So, it's a CIA network from beginning to end, from the banking side to you know the direct CIA side. You have Carter Beast, you have "Buzzy" Krongard, Jonathan Bush and Alton Keel and they were the ones working with Valmet as the Riggs Valmet Bank in Geneva to pull this money out through shell companies.
And the oligarchs, this is an interesting part of this whole thing that you know right now Theresa May and the foreign secretary Boris Johnson in the UK are accusing Putin of murdering almost everybody since the birth of Jesus Christ. And one of them was the person who had been the trusted bodyguard of one of the oligarchs living in London Boris Berezovsky.
And Berezovsky was one of the dirtiest of these oligarchs. He'd financed the Ukrainian Colour Revolution back in 2003, 2004 as a revenge against Putin because he at first thought Putin could be bought like Yeltsin and suddenly he realized that he was up against the faction of nationalists within of what had been the KGB but wanted to stabilise and preserve Russia as a functioning nation today. And so Mikhail Khodorkovskyi, Roman Abramovich, who is listed on the sanctions list yesterday, and Berezovsky were some of the leading oligarchs that were created by this Bush operation.
LS: And to jumpstart all of this, we have to talk about something that is well, that is stranger than fiction and that is something called for example "Yamashita's Gold". If our audience is interested in this, they could for example look for an article written by Chalmers Johnson, the famous Asian expert, The Looting of Asia, which was published at the London Review of Books on the 20 th of November of 2003 because then they can find something on this topic of Yamashita's gold on an instant basis in the internet ( https://www.lrb.co.uk/v25/n22/chalmers-johnson/the-looting-of-asia ). I think this is just fair
FWE: Yeah.
LS: because no one really is aware of this whole story. Please tell us about this.
FWE: The Yamashita Gold story is one of the, as you've said really incredible stories of post-World War II. During the Second World War, the Japanese Imperial Family looted the gold of occupied Arch of China, they looted the gold of all the parts of Asia that they had conquered.
LS: Basically from 1895 to 1945.
FWE: Yeah, yeah. And because they had no guarantee that Japan was going to win the war, the emperor ordered the gold to be hidden away in, mostly in the Philippines as far as we know and literally untold tons of gold were buried so deep underground in tunnels around the Philippines and the people who dug the tunnels in many cases were later shot you know so that they couldn't tell. But Marcos who was a CIA asset initially, the dictator of the Philippines through much of the '70s and into the '80s, yeah through the '70, Ferdinand Marcos somehow came upon some of this gold. So, the Japanese looted war body was buried in the early '40s before the end of the war on orders of Emperor Hirohito should they lose the war.
And at some point in the 1970s, Marcos discovered some of the sites where Hirohito's soldiers had buried the gold and the gold was stolen from China, Korea, Philippines, Indonesia and other countries occupied by the Japanese forces. And Marcos, and I think this is the major reason the CIA dumped him, got a little bit greedy and took that gold and started selling it under the market through selective secret Swiss banks. But he used the CIA asset, the Saudi billionaire named Adnan Khashoggi to help them get the gold under the market. And what he didn't realise was that Khashoggi would double cross him. He got a better deal from Bush Senior and the old boys.
LS: We have to say Khashoggi is a figure who is involved for example in B.C.C.I. and in Iran-Contra.
FWE: Back in the '70s he was involved in everything dirty that Bush and the CIA were involved in. B.C.C.I. Bank, the money laundering bank of the CIA, the arms deals, Khashoggi was a huge arms dealer during the Iran and Iraq war the CIA was feeding. He was involved in almost every dirty thing the CIA was doing.
LS: He was aware of this gold.
FWE: Supposedly he was helping Marcos to sell the gold out of the market. So he was not only aware of it, he was right in the middle of it. But then once Marcos was tackled by the CIA Bush got rid of Marcos in 1986. Then someone named Paul Wolfowitz and Richard Armitage and Khashoggi began to work with someone in Canada to create something called – Peter Munk was his name, a rather dubious businessman there – to found something called Barrick Gold of Canada and later it went on to become the world's largest gold mining company.
But Barrick Gold, all available evidence is that buried gold was used to melt down the – I don't want to get too much into the details of this but basically to melt down the Emperor Hirohito's gold that had been discovered by Marcos in the Philippines, to melt it down and use that as collateral for derivatives that would be the collateral used to take over the Russian Federation assets.
LS: The money was basically transformed into bank loans into Russia so that the would-become oligarch people could buy up those assets
FWE: Yes, exactly. So, Yegor Gaidar, the economic privatisation adviser of Yeltsin and his sidekick Anatoly Chubais privatisation had kind of guided this whole process together with Jeffrey Sachs and a group from Harvard University. #00:28:37-8#
LS: Yeah. Let us talk about this. This is known as Harvard Shock Therapy.
FEW: Well, the Jeffrey Sachs Shock Therapy, but the Harvard shock therapy is – well, what happened, the next phase of this incredible story and it's important to keep all this in mind, this is one reason that I wrote the book because of what was clear after the CIA coup d'etat of 2014 in Ukraine and all the sanctions against Putin's Russia and so forth, that if you don't understand what really happened in the '90s, the deep-seated hatred there is on these neoconservatives around Washington and their think tanks as well as, the US political establishment for Putin's Russia and the nationalism behind group Russia. You can't make much sense out of what's going on today with all these incredible lies and accusations against Russia for every crime under the book.
So, what happened is the, as I mentioned the IMF, the International Monetary Fund which had done a beautiful job for Washington in terms of, and George Soros and others in terms of looting the assets of the dead economies of Latin America, Yugoslavia, Poland and others during the oil crisis in the 1970s. The IMF was used and a group of economists around Jeffrey Sachs, a young professor at Harvard University then to impose what Sachs called shock therapy.
And the idea was that Sachs convinced Yeltsin, let prices rise through western market prices and this will increase the supply of goods, you know the stores had a paucity of goods back in the Soviet Times and get rid of trade barriers so foreign commodities could flow in to fill the shelves of Russian stores. The problem was that was a lie. The shops had been full. Okay, you could say it wasn't Kellogg's Corn Flakes and Fried Perdue Chickens or whatever, but they were full of Russian food products until November of '91 when Yeltsin announced that the exact date on December 31 st of 1991, that price controls would be suddenly lifted. So, shop owners immediately hid their goods and waited for December 31 st . So, suddenly the shops were empty and rationing was imposed and so forth. It's just unbelievable.
So, into this, this was Jeffrey Sachs on shock therapy and a group of Harvard University under the auspices of the Harvard Institute for International Development, a group of, among other things later documented CIA agents set up shop in Moscow and worked with Yeltsin's economic team Gaidar and Yegor Gaidar and Anatoly Chubais and themselves got in on the thunder the Russian East Harvard economist working. Now we have a transition in '93 through the Clinton Administration and there former Harvard professor and former World Bank Chief Economist Lawrence Summers became the deputy secretary of treasury responsible for the looting of Russia, effective and responsible for the gold economic transition in the Russian Federation.
And all of the key actors were named by Summers and they were all involved in the privatisation of Russia. They were all from this Harvard Mafia. For example of David Lipton, a former consulting partner of the Jeffrey Sachs, became deputy assistant secretary of treasure for former Soviet Union and Eastern Europe and Sachs himself was named Director of Harvard HIID that oversaw the looting of Russia through the voucher privatisation and so forth. And they got grants from the USAID, AID works very closely with the CIA in different parts of the world, this is documented. And so it was really a tight-knit cabal around Lawrence Summers that oversaw this complete theft through these pieces of paper called privatisation coupons.
And what you had was the economic situation under Yeltsin had become so severe I mean people literally they had no jobs because of the freeing up of prices, they could afford to buy little or nothing. So, most people, millions of Russians sold their privatisation vouchers on the street corners to the highest bidder. And of course the would-be oligarchs were the ones with hard currency dollars that they could buy these things up as you pointed out earlier when we talked about them. So, they had credits from their friends in the West, the Riggs Valmet and so forth to buy up these vouchers and therefore they were able when the cost came up, were able to simply steal the property titles, the ownership titles of some of the most valuable investor assets and mineral assets in the world.
LS: And we can talk about this as a classical case of leveraged buyout – even though it was a covered leveraged buyout, if it was?
FEW: Well, you could call it a leveraged buyout. I know Anne Williamson has used that term, the earlier descriptions of it. I think it was simply legalised theft, leveraged buyout gives it too much dignity. That was a term that was quite popular in the financial world back in the '80s and the early '90s. But whatever name you want to give it, it was certainly not a conventional leveraged buyout, it was bizarre in every sense of the word.
LS: An influential figure in this was mentioned by you already, George Soros. And in 1994, as you point out in your book, he was described with the following words from The Guardian in London, "Soros extraordinary role not only as the world's most successful investor but now possibly fantastically as the senior most powerful foreign influence in the whole of the former Soviet Empire, it tricks more suspicion than curiosity." What was he doing back then in Russia?
FWE: Soros was very intermittently tied with Jeffrey Sachs and the whole Harvard to become a shock therapy group and working with Lawrence Summers team at the US Treasury under Clinton. And in 1993 already the opposition inside what was left of Russia when the old communist party was in the Duma and so forth and the population generally was such that the opposition threatened to get out of hand and Yeltsin was forced to agree to hold a national referendum on the entire privatisation. So, this was in April of '93 and the referendum that was given to the population had four questions, yes or no. Do you support Yeltsin? Yes or no? Do you support Yeltsin's economic policy? Yes or no? Do you want early election for president? Yes or no? And do you want early elections for parliament? Yes or no?
So, Chubais was as an adviser to Yeltsin at that time and the key person on the economy arranged the secret meeting with George Soros. And Soros agreed to finance of course on behalf of Yeltsin, the referendum campaign. So he funnelled money over a million dollars by some accounts to offshore accounts set up to be used by Chubais to buy media. And so the media campaign and by this time most of the national media had been bought up by the oligarchs around Yeltsin so they were able to exercise undue influence. So they barely squeak through and got a yes to the privatisation scheme that Harvard, Jeffrey Sachs and George Soros and others had going on. And then of course Soros' company himself benefitted enormously from this privatisation just a little bit later when the auctions took place.
LS: A figure that connects yesterday with today is Vladimir Putin who came to international attention first in 1998, the same year when the ruble crisis took place.
FWE: This was 1999 and in August '98 you had the collapse of the ruble. This was part of the Bush "Operation Hammer's" original design. You had a huge scam going on in the GKO Russian Bond market where the interest rates were just unbelievably high. So, you had all sorts of hot money coming in, making profits and pulling it up including Soros Fund, quantum fund and so forth.
And finally, Yeltsin was getting near the end of his ability to hold this thing together. And he appointed in August '99, he appointed a young former KGB officer who served during the Cold War in East Germany named Vladimir Putin. And briefly Putin had been a deputy mayor in St. Petersburg and briefly had been the head of the successor to the KGB called FSB and the oligarchs around Putin, I've heard various Russian accounts have had this happen but Berezovsky, Brzezinski and other, the Yeltsin oligarchs thought they could take this young guy Putin and do business with him and you know that he was young and had no political base.
So, at that point Putin gave the ultimatum to Yeltsin, resign or face serious consequences and it turned out that Putin which has later been confirmed was the spokesperson for a nationalist faction within the intelligence community, a patriotic faction, call it what you want but Russian nationalist. And so Yeltsin was told, "If you resign and just get out of politics, we'll leave you alone." So he took the offer and ran. And before he did that he named Vladimir Putin as acting president until elections in March the following year.
So, Putin then came into power and called a meeting as it were of the most powerful oligarchs who had made staggering fortunes at the expense of Russia and he called them creators of a corrupt state through insider dealings and began criminal prosecution against oligarchs like Vladimir Gusinsky and Media-Most, a financial group led by Vladimir Potanin who is in the newspaper today and soon left an oil company controlled by a Roman Abramovich and Boris Berezovsky. So, at that point Putin began the uphill battle of trying to stabilise Russia as a functioning economy. And the recent re-election of Putin indicates that the Russian people by and large support that effort of Putin's.
LS: Meanwhile he also had to react to something new that was taking place then and that was NATO was marching east.
FWE: The negotiations and this is, has been confirmed by former US Ambassador to Russia Jack Matlock and that was the negotiations between the Bush administration in 1991 Germany and Gorbachev included a solemn guarantee as Jack Matlock, Ambassador Matlock who was in Moscow in '87 until '91 in this period. He said that we gave a categorical assurance to Gorbachev when the Soviet Union still existed that if United Germany was able to stay in NATO, NATO would not move eastward. So, of course that pledge like so many pledges of Washington under Bush successor governance was honoured in the breach and the newly created National Endowment for Democracy that I write about quite a bit in the Manifest Destiny.
You had, Vin Weber was the chairman of the NED at that time and he took US taxpayer money through the NED to supposedly bring democracy into former communist states. Then Weber was also a member of the Project for the New American Century (PNAC), the neocon think tank which really shaped the personnel of George W. Bush in the year 2000 and 2001. And Vin Weber was also a lobbyist for the largest military industrial conglomerate of the US Lockheed Martin.
So, he was instrumental together with another military industrial Lockheed Martin, former Vice President for Strategy named Bruce Jackson, Bruce P. Jackson to promote back democracy in former communist countries including Russia. And they started the process of expanding NATO to the east in strict violation of the pledges that had been given back in the early '90s. So, by 2003, they had begun this whole expansion of NATO into Poland, into Hungary, all the former communist countries.
LS: And the countries at the Baltic Sea.
FWE: So, at the Baltic Sea right on the doorstep of the Russian Federation, and Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria and so forth. And you began to see a very definite NATO encirclement of Russia. And then in 2003-2004, the National Endowment for Democracy, George Soros' Foundation, the whole arm of the fake democracy NGOs of Washington, began to create the so called Orange Revolution in Ukraine, and also the Rose Revolution in Georgia next door. And if you look at a map, if you bring a pro NATO government into power in Ukraine, this they did under Viktor Gerashchenko in 2004, then you're presenting a pretty formidable military threat to the national security of Russia.
Now, at that time 2003, Russia was in no shape to do much more than feebly protest as loud as they could but of course they were ignored. Then you had something quite dramatic in 2006, the end of 2006. The George W. Bush administration Donald Rumsfeld was Secretary of Defence back then announced that they were installing ballistic missile defence now I'll get to that in a minute but it's anything but defensive. In Poland, in the Czech Republic and that those anti-missile defence installations which included missiles would be aimed at a rogue nuclear attack from Iran.
In early 2007, Vladimir Putin personally came as president of Russia Federation to the Munich Security Conference, the International Security Conference held here in Munich Germany and gave a speech which really defines the security position of Russia right up to the present date. He said of course this is not aimed at Iran or North Korea as Washington says. That's a lie. It's like taking your right arm to scratch your left ear we say in Russian. It's aimed at Russia. And we consider this intolerable as a threat to our national security and we will be forced to respond.
LS: And it is aimed at Russia as a first strike possibility.
FWE: Yeah. Well, the point about the missile defence is I – in connection with the book, I interviewed, in an earlier book I wrote, I interviewed Colonel Robert Bowman who had been briefly the head of Ronald Reagan's Star Wars or missile defence programme. And became a very, very severe critic of the Bush administration's reckless policies withdrawing from the antiballistic missile ABM Treaty and so forth, said that missile defence is the missing link to Nuclear Primacy. First strike capability.
And that's something that Pentagon planners had been opting for since the 1950s. And he said, "If you can block the counterattack from your opponent and you then have this possibility to make a first strike and wipe them out because they can't simultaneously fire an effective counterstrike." So, that in a nutshell destroys the whole cold war doctrine of mutual and sure destruction that kept nuclear options off the table up until that time. And the Russians understand military strategy rather well I would say. And said, "This is simply intolerable. We have to respond and we will respond but in our own way and you will see."
LS: And the Russians have reacted.
B: The Russians have reacted, and if we can go for a minute up until the present
LS: Please
FEW: On March 1st Putin gave an address to the Federal Assembly in Moscow televised to the nation. The beginning part of the speech, his annual speech there, was about the Russian economy and plans for the future. This was shortly before the Russian elections that overwhelmingly gave him a new term. But the crucial part of that speech to the Federal Assembly was Russia's military technologies and this is as he put it. He referred to that 2007 speech in Munich and he said, "We said at that time that Russia would have to reply and since the expansion of NATO to the east which really to be honest that's – see there is no reason after 1991 or certainly after 2000 for the existence of NATO other than the reason given when NATO was created by the first secretary general of NATO to keep the Russians out the Germans down and the Americans in."
But Putin's speech talked about nuclear primacy and the Russian response and he outlined the military are the developments that they had quietly brought online since Washington tore up, unilaterally tore up the ABM Treaty in 2002/2003. So he outlined an awesome array of missiles, hypersonic low flying stealth missiles carrying nuclear warheads, unpredictable trajectories, invisible against perspective missile defence and air defence systems, unmanned submersible vehicles to great depth that could go many times higher than the speed of submarines cutting edge torpedoes just and commentators in the West like CNN. They said, "Oh, this is just bluff and so forth."
People who know Russian military technology and the intensity of the kind of research and development that's focused on defending the nation confirm that this is no joke. Hypersonic aircraft five times the speed of sound, that's hypersonic and they have something called the [unclear] which goes 10 times mark 10 and as Putin described it, "This missile flying 10 times faster than sound can manoeuvre in all phases of the flight trajectory, overcome all prospective and aircraft county missile defences in a range of 2000 kilometres."
He outlined about six or seven of these I would call them not even cutting edge, bleeding edge military technology and as The Saker commented in his blogpost after the speech, it's indeed set marching game over for the empire. There's no more military option against Russia.
This all is to make a point that the entire history up until now, these fake accusations of Putin would have an interest or Russia would have an interest to meddle with the US elections when you have a choice between Hillary Clinton and Donald Trump to accuse Putin and Russia of international violations of law by allowing a referendum to take place in Crimea after the CIA coup d'etat in Kiev and now it's come out from actual mercenary snipers that were brought in from Georgia under [#inaudible 00:55:08-0#] umbrella that they were paid by the CIA or promised to be paid by cut outs to the CIA to create the Maidan Square February 2014 chaos that led to the collapse of the government and the coup d'etat.
So, you know, this is not Russia is the arch Evel Knievel looking for a fight every corner of the world. It's not Russia doing bad things in Syria. It's Russia trying to stop a NATO and Saudi and other embedded destruction of the Middle East and create some kind of peace and stability. And anyone modest to take the slightest bit of care and follow this, they can read a running commentary on my website williamengdahl.com but not only there, it's all over the place. You realise that the fake media is the media that dominates and is guided by NATO public relations strategy in the West and it's not the so called critical media that's being sanctioned and censored right now.
LS: Let's talk further about the present, William, by closing one circle of our interview. As we've discussed the Russian gold vaults were empty since the early 1990s. This has changed since basically the financial crisis broke out in 2007, 2008, 2009. Since then the Russian Central Bank is buying gold like basically no other nation in a very rapid tempo.
FWE: Since the financial crisis and especially since the opposition of sanctions after the annexation of Crimea in 2014, it's been the policy of the Russian Central Bank and the Russian Federation to buy as much gold for reserves of the ruble as they can get their hands on. And they are now I think number five or number six in the world in terms of gold reserves and correct me if I'm wrong but just slightly behind the people's republic of China which has also been vigorously adding gold towards Central Bank reserves for the yuan.
So, what Russia is doing is creating a buffer gold, by the way in my view has never ceased being an object of value to stand behind currencies. If you have currencies like the dollar after all this 1971 when Nixon took the dollar off the bread and wood, gold exchange [unclear], then if you have a military you might or manipulate the oil price petrodollar and so forth, you can create money if you have the reserve currency you can create money without them. So what the Russia is doing is creating a security in terms of its currency and now that security is probably going to be tested by the economic warfare division of the US Treasury in these new sanctions.
But Russia is merging together with China. Interestingly enough after 2014 when the CIA coup d'etat Ukraine took place, Putin responded not by getting bogged down in the destructive war inside the Eastern Ukraine but he responded by turning east, strengthening his relationships with China, with the new president of China then Xi Jinping bringing the Asian economic Union which Russia is the leading economy in, together with Belarus and Kazakhstan, Armenia and others, bringing that in a coherence with Xi Jinping's Belt and Road Initiative One Belt, One Road to link the infrastructure, the energy pipelines, the high-speed rail networks, the deep water ports and so forth to create a Eurasian, some people call it the land bridge but it's an economic space in Eurasia that would have the majority of the world's population, would have every raw material resource that the world needs including rare earth metals that China is world's leading supplier of at the moment.
And Russia has vast oil and gas reserves and military technology, civilian technology, an educated labour force that is probably one of the finest in the world and scientific country and so forth. And independent of the bankrupt economies of Britain and the United States and very rapidly of the European Union where this banking crisis has, since the crisis of 2008 has just been swept under the rug but it's ready to explode on a moment's notice. So, you have a depth loaded western NATO world. Let's call it a NATO world, a world of the NATO member countries and you have Russia together, which by the way, Russia has unbelievably small
LS: Debt.
FWE: National debt.
LS: Yes.
FWE: Something like 13 to 17% of the gross domestic product.
LS: And now they have this huge stock of gold relative to very little sovereign debt. It's almost ideal.
FWE: Yes, and that's by design. That is by Putin's intention to create this independence. And one thing, I am very often in Russia, have a very, very dear special friends in Russia over the years, the first time I was there was 1994. That was a vastly different, that was in the middle of the Yeltsin and the insanity. The Russians are very not only proud people but they are very determined and they protect their existence and have done that I would say for well over 1000 years going back to the great schism between the Western church in Rome and the Eastern Church in 1054. I think that was a pivotal date in modern history, the division there.
But certainly the Russians have gone through two World Wars and the rape of Russia under Yeltsin, unbelievable trials and tribulations and they are not shying away from defending their existence. That's something I think the west or certainly Washington with these neocons really doesn't have a sense of.
LS: One thing that I would like to ask you about as my final question is the following. You are a renowned expert for the geopolitics and the history of oil. And since this month we have a future's contract in Shanghai, denominated in yuan for oil and we also hear that the Chinese are planning to price oil that they import in yuan which is safe for this buying of oil internationally via yuan, Russia would be the candidate number one as the exporter?
FWE: Definitely. Most definitely and Russia and China are connecting their financial markets ever closer. The Russian government is the in the process sometime this year of issuing Russian bonds denominated new Chinese yuan. The announcing of the petrol yuan, the oil futures contracts being sold in Shanghai, ultimately it won't happen overnight but it's certainly off to a positive start in the marketing acceptance. That has the basis for taking oil sales.
Let's step back a moment to the 1970s and I document this at length in two of my books, Myths, Lies and Oil Wars and A Century of War. In the early 1970s when Nixon took the dollar off of gold, the dollar relative to the German mark and the Japanese yen dropped like a stone, something like 40% over a period of five or six months. And in order to stop that because the New York Banks were hurting quite a bit from that, there was a oil price shock that was orchestrated. I won't go into the details it's documented quite extensively in those two books of mine.
LS: And Sheikh Yamani had said something about this, too.
FWE: Yes. He invited me after reading my book to his annual energy retreat in London in 2000, September 2000. And then called me to a private dinner discussion at his home outside of London to talk about what I wrote about in the book. And he later went on CNN on an interview and mentioned my book by name. In the written transcript it's in there and in the television version they spliced it out so that you couldn't realise that it'd been in there. But Sheikh Yamani told me you are the first journalist or the first person outside of myself that writes correctly what happened with that oil shock. And that was manipulated by among others Henry Kissinger, the Secretary of State and by a group in the Atlantic establishment called the Bilderberg meeting in Saltsjöbaden, Sweden back in May of that period before the Yom Kippur War.
In any case, the US circles around Rockefeller, who at that point was the chairman of the board of USA Incorporated, I would say. They had engineered a 400% price rise in oil and to make sure that Germany and Japan and other countries wouldn't make deals to buy oil in German mark but keep the dollar demand high and the dollar value high. They send a delegation from the US Treasury to sign an agreement with the Saudi Arabian monetary agency for a new relationship taking surplus Saudi petrodollars or OPEC petrodollars and buying US government debt.
LS: Yeah, and outside of the normal auction to privileged conditions.
FWE: Yes. In return, Washington agreed to give the Saudis tens and billions of dollars of defence equipment.
LS: Yeah, and Saudi Arabia would use its status as a swing producer in OPEC that it would only accept dollars as a pricing for oil.
FEW: And the quid pro quo was after 1975, this was formalised that Saudis would as swing producer in OPEC guarantee that OPEC sold its oil only in dollars and that held up until the time of Saddam Hussein during the sanctions shortly before the US invasion and Saddam Hussein began buying oil through a French bank denominated in Euros and not in dollars.
LS: And he made a plus, he made a net plus because he did sell his oil in Euro.
FWE: Yeah, yeah. And so this, what that has done up until the present is prop up the US dollars despite the fact that the internal industrial economy import activity of the United States went down the tubes over the past 40 years since the taking the dollar off of gold and the, putting of English dollars for the world economy. So, the idea than China and Russia would trade in energy and that other economies would begin to sell oil to China, Iran for example is a prime candidate in the petro yuan not in petrodollars, this began slowly like acid drops begins to erode the reserve currency status of the US dollar. And if that goes, it's end game for the US as a financial global power.
LS: We have to make clear to our audience. The fact that you have to buy oil in dollar makes sure that you need dollar, that you acquire dollar in order to buy oil.
FWE: Yeah.
LS: And so if this mechanism goes, well then the US has a problem because the dollars that are floating around internationally would find their way back into the homeland of the US.
FWE: Well, the other thing is that in order to sell now you have under this wonderful Trumponomics as I call it, you have projections that the US annual government deficit, shortage of tax income from tax outgo, spending outgo will by 2020 exceed one trillion dollars a year for every year as far as the eye can see. And by end of 2020, 2028 I think was figured by the congressional budget office, the US public debt is estimated to be well over $33 trillion, it's 20 now, 38 maybe, it's just out of control. So, if the ability of the US dollar to command use in the world economy is severely undermined, you're going to have to raise interest rates so high to sell this debt and it just becomes dysfunctional.
LS: Yes, but you have already in the last few years interest rates payments on this already existing that of per annum $400 billion.
FWE: Yeah.
LS: And if interest rates go up
FWE: Yeah and that was under zero interest rates, but now, you know, if they have to put up interest rates to five, six, seven, 8% like it was in the 1980s. the whole thing just blows up sky high.
LS: And so coming back to gold, gold has the advantage relative to bonds or shares or the US dollar or other Fiat currencies that there is no counterparty risk. If you have the gold in physical form, there is no counterparty risk.
FWE: Right.
LS: So would you say that gold will be one of the ultimate winners of the ongoing financial crisis when it goes into full gear?
FWE: Well, it's documented that J. P. Morgan, Chase and other select banks with this collusion of the Federal Reserve have been artificially depressing the price of gold for years. Every time there's a new financial crisis, they intervene and keep gold within a very tight range. At a certain point that's not going to work anymore and then some people estimate to follow the gold markets much more than I do but it could quickly go up to $10,000 an ounce or even beyond that.
Be that as it may, gold as you point out has no counterparty risk and it's a historic store of value. It's one of the beautiful commodities out there and it has a special – the other just being special significance economically and historically, the other thing is that China is the number one mining producer of gold in the world today, not South Africa. South Africa has fallen far behind
LS: Yeah, and Russia is number three.
FWE: Russia is number three.
LS: And a lot of member states of the Shanghai Cooperation Organisation are producers or are buying gold.
FWE: At the rail connections of the circle of the China Belt Road Initiative in part are aiming to go in the areas where there are known gold reserves but no infrastructure during the Soviet era to bring that gold down to market. So, we have an extremely fascinating prospect, not just for China and Russia, for the world really to build up instead of tear down, destroy and burn and bankrupt which is the only policy that Washington seems able to follow these days.
LS: Yeah. To sum it up with a famous Chinese proverb. "May you live in interesting times" – you and all the others.
FWE: We certainly do.
LS: Okay. great. Thank you very much, William, for this interview.
FWE: Thank you, Lars.
Fraser • a day ago ,Two things:
1. Operation Hammer:
In 1989 President George H. W. Bush began the multi-billion dollar Project Hammer program using an investment strategy to bring about the economic destruction of the Soviet Union including the theft of the Soviet treasury, the destabilization of the ruble, funding a KGB coup against Gorbachev in August 1991 and the seizure of major energy and munitions industries in the Soviet Union.Those resources would subsequently be turned over to international bankers and corporations. On November 1, 2001, the second operative in the Bush regime, President George W. Bush, issued Executive Order 13233 on the basis of "national security" and concealed the records of past presidents, especially his father's spurious activities during 1990 and 1991.
2. Why can't Putin touch Yeltsinist oligarchs:
Yeltsin's oligarchs remained as rich as they were; Yeltsin's family still possesses immense riches. And Putin does not dare to touch them. He goes hat in hand to open a Yeltsin's Memorial Centre; he is courteous with Yeltsin's widow and daughter. Putin's establishment cautiously avoided celebration, or even mention of the Revolution centenary, in keeping with Yeltsin's anticommunism. This is the Deal.Guy Fraser • a day ago ,Given the depth of the fall, the rise (under Putin) has been remarkable.
Tommy Jensen • a day ago ,The rise has been astounding and all because they have a leader that can't be bought , not corrupt and loves his country. That is why he literally was swept in in the last election. The Western leaders will not admit it but I am sure they are terribly envious .
Nicole Temple • a day ago ,Very good article to bring to RI also.
It open eyes on how the West political elite are a criminal rotten cancer syndicate and Georg Bush Sr. shows up to be even worse than the disgusting profile he already has in media and Georg Soros bad reputation gets confirmed.
No police or court are available to take this out. We only have John Connor or The One to count on.
Play Hide
Choice is the problem now. We will have to make a choice.Guy • a day ago ,The photo of Yeltsin and Clinton that accompanies this article should remind readers of this story:
https://viableopposition.bl...
There is something rotten in Washington and it has been in existence for decades.
Jimi Thompson • a day ago ,Great interview .William Engdahl is a very knowledgeable person. I have read a few of his books. Superb in my view.
Quite a few unknown tidbits for me in all of this... very eye-opening even for someone that is aware of the games being played at the higher levels.
To imagine all of what remains unknown, including many of the players, leaves much to the imagination.
|
|
|
Apr 10, 2018 | turcopolier.typepad.com
David Habakkuk , 4 years ago
rkka, kao_hsien_chihI broadly agree with rkka's last comment.
Another point may be worth bringing into the discussion. One thing that Oxford University does rather well nowadays, perhaps ironically, is mafia studies – they have two splendid Italian professors, Diego Gambetta and Federico Varese. As the latter put it in his 2011 study 'Mafias on the Move':
'A relatively recent body of research has shown that mafias emerge in societies that are undergoing a sudden and late transition to a market economy, lack a legal structure that reliably protects property rights or settles business disputes, and have a supply of people trained in violence who become unemployed at this specific juncture.'
An interesting feature of this work is that a great deal of it is really an application of 'rational choice' theory. Applied in the conditions of the Soviet Union in the Nineties, 'shock therapy' actually created pressing 'rational' incentives leading to extensive criminalisation.
If property rights cannot be protected by an effective state, they will be protected by private enterprise – which means mafias. And if at the same time a vast military, intelligence and internal security apparatus is being demobilised, some of its members have the strongest incentives to join mafias.
Some kind of reconstruction of the Russian state – and also of Russian patriotism – was clearly necessary if large parts of Eurasia were not to be permanently locked in a state of criminalised anarchy.
People can legitimately disagree about the merits and demerits of Putin's approaches, and the interpenetration between organised crime, supposedly 'legitimate' business and politics continues to be a massive problem.
However, any argument based upon the belief Russia was 'on the right lines' in the Yeltsin years quite patently makes it impossible to understand what the possibilities are in the country today – in particular as, precisely as rkka says, it leads to the conclusion that Putin's supporters are suffering from a massive case of 'false consciousness'.
rkka , 4 years ago
kao_hsien_chih, 4 years ago"Of course, this means that we know nothing of what Putin has managed to accomplish in Russia, beyond the fact that we apparently aren't supposed to like him much, or understand why he enjoys the kind of support that he apparently does."Exactly. In the '90s, oligarchs felt no need to pay wages to workers or taxes to the government, preferring to offshore every kopek they could get their hands on. Hence, workers suffered and the government was bankrupt.
And the FreeMarketReformers were fine with this.
When Putin arrived, he offered the oligarchs a deal: Keep your swag from the '90s, but behave from this point on. Most took him up on it. Several refused and tried to do as they had before. And when these were exiled or jailed, the Angosphere Foreign Policy Elite and Punditocracy (AFPE&P) howled with outrage at Putin 'violating their human rights'
However, the Russian people know by their own experience that they now live far better than they did while FreeMarketReformers were running the place. This is the simple reason Putin is popular with Russians. The AFPE&P say its because the Russian government dominates Russian media and propagandizes the ignorant masses. The AFPE&P lie about this, from both ignorance and malice.
USG is clearly out of date by at least a decade and a half, or more likely, two or more, when it comes to Russia. After all, isn't that when we supposedly "won" the Cold War? If my speculation is right and no serious Russia experts came near the loci of power in USG since then, I shudder to think how out of date our information about the rest of the world (besides Russia and its surroundings) are.Of course, this means that we know nothing of what Putin has managed to accomplish in Russia, beyond the fact that we apparently aren't supposed to like him much, or understand why he enjoys the kind of support that he apparently does.
David Habakkuk , 4 years ago
kao_hsien_chih,I would absolutely agree with everything you write.
Some tentative thoughts in response.
In relation to British imperial experience, it may be relevant that the distinctive nature of Indian society, both the religious issues involved and the critical issue of caste, facilitated imperial control over a population which was not simply 'primitive' in the way that was the case in, for instance, most of Africa.
But 'divide et impera' can only be practised on the basis of understanding. Moreover, there were clear penalties for obtuseness, as we discovered in 1857.
What is bizarre now is the c ombination of an unreal sense of danger relating to non-existent or grossly exaggerated threats, with a lack of any sense of danger relating to our current practice of making actually or potentially unstable areas of the world even more unstable (pushing Humpty-Dumpty off the wall, one might call it.)
- As regards alien cultures, it is certainly not necessary either to agree with or to 'respect' them. What however strikes me is the apparent marginalisation of a sense of interest – which I think has catastrophic consequences for intelligence.
An example from British intelligence history may be to the point. The unit in MI6 which handled the material from Enigma relating to the Abwehr, the German intelligence service, was headed by Hugh Trevor-Roper. A classicist turned historian of early modern Europe – and a strange, feline creature – his response to the chaos of the time was to identify strongly with an eighteenth-century Enlightenment tradition.
But he made sense of the accumulating evidence about the nature of the Nazi regime through a perspective shaped by a tradition of interpretation of despotism going back through Gibbon to Tacitus, and knowledge of millenarian and apocalyptic cults in early modern Europe.
Doing so enabled him to see something which both Roosevelt and Churchill failed to grasp – that the view of the Second World War as a continuation of its predecessor, and the enemy as 'Prussianism', was at best a half-truth, and a dangerous one at best, obscuring the radical gulf in attitudes between the nihilistic millenarians of the 'Sicherheitsdienst' and the German General Staff.
One of the most fascinating counterfactuals of the war is what might have happened had Trevor-Roper's attempts to get the British to respond to the overtures from the Abwehr chief Admiral Canaris born fruit.
|
|
|
Apr 02, 2018 | russia-insider.com
- BaBa • 9 hours ago ,
"Anders Aslund's deep knowledge of Eastern European politics"
During the 1990's in Russia the illusions of Mr. Aslund and others facilitated the transcendence of the "Soviet Union" by the Russian Federation.
It appears that Mr. Aslund continues to serve a useful purpose.
It was decided in the 1990's not to thank Mr. Aslund, Mr. Sachs and others for their complicity since such was deemed to be indelicate, so perhaps now this should be rectified.
|
|
|
Mar 14, 2018 | www.unz.com
MEFOBILLS , March 14, 2018 at 3:38 pm GMT
@DESERT FOXGod bless Putin and Russia for standing against the Zionist NWO
You are correct Desert Fox. The prime variable in history is economics. Economics before politics and before war.
Our illuminist friends manipulate the strings of international bank capital for their one world government. In effect, the West has been infested with a tiny cadre of plutocrats, who operate a usury mechanism to extract wealth from host peoples and nations.
Russia was to be broken up into parts. ((Harvard boys)) came to the 'rescue" and privatized Russia with various schemes, the most important of which was to saddle Russian's with "dollar" debts. Russians as hewers of wood and drawers of water, were to sell their "earth" in exchange for finished dollar priced goods. Middle Class Russian labor is then cut out of wealth production inherent in making finished goods. For example, Russian platinum is used to make high value catalytic converters elsewhere, while only a few Russian's get wealthy (in dollar terms) by poking holes in Russian land to extract minerals. Former Russian nuclear scientists walk around drunk as they are not fit for being good labor to extract oil, platinum, etc.
In effect, our ((friends)) turned Russia into African economy, never mind that Russian's aren't African's. This desire to rape and pillage the earth, to then take rents on the world, to then think of yourselves as god (note a little g) is a sophisticated, yet criminally insane method akin to parasitism.
Russian's were infested by parasites, and yet Russian people as hosts have become stronger year on year, to eject their parasite. Putin was instrumental in this transformation.
All nationalist economies in the past, which had the temerity to eject these parasites have come under attack. I'm thinking Nazi Germany as well – oh the horror. This economic attack is often under the guise of liberalism, which has a knock on effect of breaking down civil society. In other words, liberalism is a symptom of parasitic financial oligarchy (and illuminism) a control method to make a host weak, to then be re-colonized.
Russia DOES need to take full control of its Central Bank and eject its fifth columnists (atlantacists), a final act that hasn't been done yet. On this point, it is factual and fair to criticize Putin, because once Russian's have their own money power, they can accelerate even faster. http://www.sovereignmoney.eu
|
|
|
turcopolier.typepad.com
Part 3 - A False Promise
This 'Washington Consensus' is the false promise promoted by the West. The reality is quite different. The crux of neoliberalism is to eliminate democratic government by downsizing, privatizing, and deregulating it. Proponents of neoliberalism recognize that the state is the last bulwark of protection for the common people against the predations of capital. Remove the state and they'll be left defenseless .
Think about it. Deregulation eliminates the laws. Downsizing eliminates departments and their funding. Privatizing eliminates the very purpose of the state by having the private sector take over its traditional responsibilities.
Ultimately, nation-states would dissolve except perhaps for armies and tax systems. A large, open-border global free market would be left, not subject to popular control but managed by a globally dispersed, transnational one percent. And the whole process of making this happen would be camouflaged beneath the altruistic stylings of a benign humanitarianism.
Globalists, as neoliberal capitalists are often called, also understood that democracy, defined by a smattering of individual rights and a voting booth, was the ideal vehicle to usher neoliberalism into the emerging world. Namely because democracy, as commonly practiced, makes no demands in the economic sphere. Socialism does. Communism does. These models directly address ownership of the means of production. Not so democratic capitalism. This permits the globalists to continue to own the means of production while proclaiming human rights triumphant in nations where interventions are staged.
The enduring lie is that there is no democracy without economic democracy.
What matters to the one percent and the media conglomerates that disseminate their worldview is that the official definitions are accepted by the masses. The real effects need never be known. The neoliberal ideology (theory) thus conceals the neoliberal reality (practice). And for the masses to accept it, it must be mass produced. Then it becomes more or less invisible by virtue of its universality.
Source, links:
https://www.counterpunch.org/2018/03/02/colonizing-the-western-mind/
[ 1 ] [ 2 ]
|
|
|
Mar 10, 2018 | turcopolier.typepad.com
Mark Logan , 10 March 2018 at 02:05 PM
My understanding is Fusion GPS does research for both sides. Soros giving them money is entirely plausible but assuming that money equals control is a bit of a leap.likbez said in reply to Mark Logan... , 10 March 2018 at 03:43 PMIt appears to be some Russians seeking to discredit the investigation with clever BS/truthiness.
I suspect a few absurdly wealthy Russians harbor a deep fear of Mueller. They may believe he is primarily after them and they may be right. I see Mueller as an old-school lawman, and suspect he is using all this as a golden opportunity to put the hurt on some Russian mobsters, particularly in their money laundering. It would not surprise me if he hopes he will not be forced to nail Trump himself to the wall, which would drag all kinds of political noise into the trials, some of the people around Trump will be bad enough. Using some of them, at least for the moment, is unavoidable, it's the politics is the source of his mission and resources.
If only our press had the bandwidth necessary to distinguish those few Russians from ALL Russians...
"I suspect a few absurdly wealthy Russians harbor a deep fear of Mueller.""I see Mueller as an old-school lawman, and suspect he is using all this as a golden opportunity to put the hurt on some Russian mobsters"
Thank you ! You have such a refreshing level of naivety that I really enjoyed your posts.
How one in his sound mind can call Mueller "an old-school lawman" if one remember Mueller's role in 9/11 and anthrax investigations.
And FYI those "absurdly wealthy Russians" represents the US fifth column in Russia (as guarantors and protectors of neoliberalism in Russia; Google such a name as Chubais https://www.rusjournal.org/wp-content/uploads/2016/02/Yeltsin_Putin.pdf ) and to destroy them might not be in best USA interests. Moreover, such a move actually will be do Putin a huge favor, strengthening his hand.
As for "a golden opportunity to put the hurt on some Russian mobsters" the danger of such a brilliant move is to reveal criminal connections with Russian oligarchs (and financial oligarchs in general as you never know where the oligarch ends and the mafia boss starts) and the Democratic Party.
Just think about who can go down with Trump is such a case. It's not only Bill and Hillary. It is also a very dangerous thing to open this can of worms as "the people" might learn something that neoliberal elite does not want them to know -- specifically the USA and intelligence agencies role in creating Russian mafia and oligarchs after the dissolution of the USSR. Do you, by any chance, know such a name as Andrei Shleifer and such a term as "Harvard Mafia" ? Please Google those if you do not.
FYI Bill Clinton took a huge bribe in the form of speech fee from people very close to "Russian Mobsters" (organized crime figures should probably more correctly be called "the informal neoliberals" ;-)
There was an interesting discussion in Quora in 2016 on this topic:
|
|
|
Mar 10, 2018 | www.rusjournal.org
From Yeltsin to Putin: Chubais, Liberal Pathology, and Harvard's Criminal Record
Matthew Raphael Johnson
Johnstown, PAWhen the USSR collapsed in 1990-1991, Gorbachev was incapable of handling thesituation. Boris Yeltsin came to power both bureaucratically and popularly. He was named theChief of the Presidium, but in June of 1991, he was elected in a popular election where heearned 57% of the popular vote.With a small army of American advisers, Yeltsin began selling off Soviet era assets.The problem was that the process had nothing to do with markets. Privatization of assets wentto a handful of well-connected politicians and bureaucrats who came to control the economyas a whole.1 They had amassed a huge number of shares by 1995, and hence, the post-Sovietoligarchy was born. The fact is that the work of 70 years of Soviet labor went to the pocketsof two or three dozen people.2
The rising oligarchs could easily manipulate the court system and tax police, sincethere was no real law governing private enterprise. Russia was led to the brink of anarchy. By1998, according to a paper by Sergei Guriev and Andrei Rachinsky, the oligarchs comprisedabout 700 individuals that completely controlled Russia's economic assets.3
The Western Elites and the Ivy League as a Criminal Syndicate
In NS Leonov's book (only in Russian), The Way of the Cross: Russia from 1991-2000, he states, as the first "reform" of Yeltsin's government :Government "reforms" that began Gaidar's privatization scam was the seizure of the savings of the people. These were taken by force, though not directly. Inflation and economic collapse made the transfer of funds easy. State control was removed from prices and the "free market" would ensure the enrichment of corruption. This was the level of cynicism the new democracy had reached, while simultaneously preaching the sanctity of private property. What did not melt away in the deliberate fleecing of the people was taken by other means. An estimate of the total taken thisway is about 300 billion rubles, and it had the proper effect: without money, rebellion was difficult. They cried out in frustration.4
Nothing was done according to democratic norms, which is odd since democracy was the buzzword that made these economic decisions seem political. At almost no time in the history of the USSR did one man, Chubais and his allies, have such total and irresponsible control over the Russian economy. When the voucher program was introduced in 1992, massive inflation resulted. Soon, each 10,000 ruble voucher was worth very little. It was rendered null regardless, since the state refused to consider the vouchers as legal tender.
1 Hoffman, D. The Oligarchs: Wealth And Power In The New Russia. Public Affairs Books, 2011 (cf esp ch12).
2 Kotz, D.M. Russia's Financial Crisis: The Failure of Neoliberalism? Z Magazine, (1998), 28-32
3 Guriev, S. and Andrei Rachinsky. The Role of Oligarchs in Russian Capitalism. Journal of EconomicPerspectives, 19(1), (2005), 131-150 http://pages.nes.ru/sguriev/papers/GurievRachinsky.pdf
4 Leonov, NS. The Way of the Cross: Russia from 1991-2000. Moscow: Russia House, 2002 (All citations aremy translations from the Russian.
Making the entire scam even more blatant, Chubais inserted a rider to the law stating that the value of the voucher would only exist until late 1993. In 1992, Yeltsin's popularity went from 50% in January to 30% in August, and from there to single digits.
By July of 1992, Chubais was hated. This led Yeltsin to limit the power of parliament, increase his executive power and totally dominate the regions. This was done with western backing and was a far greater centralization of power than Putin was later to be condemned for. He had already banned the Communist Party, helping to break his main opposition and prevent their imminent reelection in Parliament. The fraud of democracy was clearly open.
Soon Chubais and his crew stated that there was no benchmark value for any sold property. The institution in charge of this, the Russian Federal Property Fund and related agencies, therefore, began from arbitrary benchmarks. Ultimately, major firms were being sold for 1-5% of their value. Worse, some of these were defense plants, bought up by shallcompanies operates by the CIA – this was Hay's job. Therefore, scientific advances of the USSR were now entirely in American hands.
In 1992, Yeltsin did fairly well in a referendum, receiving about 50% approval, but at this date, privatization had just begun. Elections a bit later were to belie this vote. Yeltsin himself clearly had no confidence in this referendum. Having no confidence in that vote, Yeltsin then, again with western backing, banned all opposition protests in Moscow. Then, making matters worse, he signed order 1400 in September of 1993 which stripped the Congress of People's Deputies of all power. For the upcoming elections, Yeltsin passed a law saying that only 25% of voters needed to show for it to be valid. This was a means of making sure that opposition boycotts could not win. Yeltsin soon after banned the main opposition newspaper.
Russia's privatization scam was created, directed and imposed by Harvard University and carried out by two "professors" whose incompetence is rivaled only by their lack of accountability. Anatoly Chubais, probably the most hated man in Russia, was an old friend of Harvard "economist" Andrei Shleifer, who was also working with Harvard don Jonathan Hay (who according to the FSB, is CIA). Chubais, functioning as a Russian dictator since Yeltsin was not functional at the time, put the privatization scheme into Harvard's hands. Apparently having no workable knowledge of Russian life, the Harvard elite, believing themselves infallible, quickly proved their theories not only false, but directly responsible for ruining thelives of millions.5
1994-1995 was the period of the solidification of the oligarchic clans, their connection with the United States, and the complete collapse of the state. Oligarchic clans, created by Chubais, filled the vacuum with private armies, political machines and newspapers. In the US, conservative and liberal alike called this the "free market" and democracy. Vladimir Zhirinovsky, of Jewish origin and endlessly changing political positions, became the government's ace in the hole: whenever the US questioned the increasingly obvious destruction of Russia, Yeltsin would trot this clown out to make some typically outrageous statement. In 1995, it was clear that Zhirinovsky both "loved Hitler" and was "proud" of Russia's victory in the Great Patriotic War. Clearly in the pocket of Yeltsin, Zhirinovsky a)kept US aid money coming into his efforts, b) siphoned off serious criticism, c) easily associated nationalist views with this kind of rhetorical nonsense.
Chubais continued to hang onto power. Not being a Russian citizen (and yet having all that power), he clearly equated the oligarchic clans as "democracy." In Davos, 1996, he met with the heads of all the clans including Guzinsky, Berezovsky, Khodorkovsky, Friedman, Potanin and many others, and formed a political movement designed to keep nationalist and communists out of power.
5 McClintick, D. How Harvard Lost Russia. Institutional Investor, 2006. http://www.institutionalinvestor.com/Article/1020662/How-Harvard-lost-Russia.html?ArticleId=1020662&single=true#.UY7blLWG2So
This move shows that Chubais backed the oligarchs, did not consider them "unintended consequences" and sought their assistance to stay in power: All in the name of democracy.
Yeltsin, now at 3% (with the same margin of error) began to implement populist measures, but now was isolated. Winning a strangely high 33% of the vote in the 1996 elections, it can only be attributed to a) electoral fraud, or b) the fact that Gen. Alexander Lebed had been talked into entering a sort of coalition with Yeltsin. If they won, then Lebed's rival Pavel Grachev, would be history. Yeltsin won the second round with just over 50%, as the oligarchs and Chubais personally spend a small fortune bribing artists, journalists, writers and, making an even worse mockery of democracy, busing thousands of urban youth into Moscow to ensure their support.
Harvard's Sinister Role
Harvard University spent quite a bit of its money to restructure Russia. The US government sued some of them, specifically, Andrei Shleifer, for breach of contract. Many economists from Harvard worked for the State Department so as to be able to control Russia for the better. The fraud of the Russian economy was in part blamed on these advisers, whowere forced to pay more than $31 million to the US government for "conspiracy to defraud."Harvard had authored the plan that Gorbachev had requested to turn Russia into a capitalist state. This was the plan that was enacted. The Harvard Institute for International Development in Russia was the group created at Harvard and sponsored by the US government. This is what was sued over. The US government argued that the reform program was a failure, and the planners, living in America, knew it was a failure and continued to defend it – with taxpayer money. Even worse, as it turns out, Shleifer was rigging some of the auctions himself, investing his own money in firms that he knew would turn a profit, even if overseas.
The US Justice Department in 2000 sued, among others, Shleifer and Hay for defrauding the US government. The Justice Department stated:
The United States alleges that Defendants' actions undercut the fundamental purpose of the United States' program in Russia -- the creation of trust and confidence in the emerging Russian financial markets and the promotion of openness, transparency, the rule of law, and fair play in the development of theRussian economy and laws.6
Since they were using $40 million in taxpayer money, the cold-blooded desolation of Russia implicated the US. The civil lawsuit argued, to simplify, that Harvard's economists, especially Shleifer (and his wife), was investing taxpayer money in Russian companies about which they were giving financial advice. Harvard admitted guilt in the form of a $25 million settlement. How much of this assisted their victims in Russia is not known.7
In response to the suit, lawyers for Shleifer and his co-conspirator, Jonathan Hay, sneered to the press: "We are confident that, as the civil case unfolds, the court will confirm that the Harvard program significantly fostered Russian reform and that the government received its money's worth." As it turns out, even their lawyers did not believe this, since their defense rested, not on the denial that conflict of interest existed, but that they were never bound by such ethical rules.8
6 "United States of America, Plaintiff v. the President and Fellows of Harvard College, Andrei Shleifer, Jonathan Hay, Nancy Zimmerman, and Elizabeth Hebert, Defendants" (2000)
7 His crimes and the full nature of the lawsuit and evidence can be found here: Wedel, J. Who Taught CronyCapitalism to Russia? How Harvard and the 'U.S. Government's Aid Agency became part of the RussianProblem. The Wall Street Journal Europe, March 19, 2001
In 2005, a federal judge found Shleifer guilty of professional fraud. The disgraced "professor" paid the US government $2 million, and his wife, operating yet another scam, settled out of court for $1.5 million. Harvard paid about $10 million in legal fees to defend their role in the starvation of Russia.9
For all that, Shleifer remains a celebrated professor at Harvard and the toast of academia worldwide. His academic stock has not suffered in theleast from this. Just as puzzling, Harvard suffered no diminution in prestige. This is especially puzzling in that ivy league scandals erupt seemingly on a daily basis. This Teflon world exists partly due to the protection of former Harvard President, World Bank economist and Treasury Secretary, Lawrence Summers, also a pivotal figure in the Russian fiasco.10
Summers is partly to blame for the American sub-prime mortgage disaster since hewas pivotal in removing many of the regulatory barriers that forbade predatory lendingpractices. Therefore, the execrable Summers is the co-author of not one but two national meltdowns. Summers, after being forced to resign from Harvard based on an unrelated set of sins,11 was quickly rehired as a "professor" by the government. Then, Summers became a leading figure in Obama's economic brain trust, was soon after appointed as part of the "oversight"panel for the UN's economic programs and became a member of the Group of 30, a highlyelite and secretive organization created by the Rockefeller family.
Like Summers and Shleifer, Chubais was also handsomely rewarded for his direct role in the Russian cataclysm. He was soon placed on the board of JP Morgan, and, to no one's surprise, was granted a seat on the ultra-elite Council on Foreign Relations, another powerful conclave within the Rockefeller cult.12
Summer's career, his almost comic legacy of failure and ignorance, and the criminal impoverishment of Russia (not to mention the 2007 US meltdown) wholly destroy the "elitestatus" of places like Harvard.13 This set of scandals, largely unknown to a bewildered and exhausted American public, shows the profound and pervasive putrescence of academia, especially in the Ivy leagues. It brought into question academic tenure, unearned salaries, and the famed academic insulation from consequences arising from their theories. The Harvard civil suit and all it entails demonstrates the incompetence of those paid to implement policy and their ability to get their hands on taxpayer money. It shows a reprehensible and reckless disregard for the welfare of others that is rewarded with academic posts, social prestige, ostentatious wealth and immense power.
It might be worth mentioning that the behavior patters of Chubais conforms almost perfectly to the Triarchic diagnostic model of psychopathy as developed by Skeem, et al in 2011. First, it is typified by a pathological arrogance. The victim has full confidence that he is above the law, or that the law only applies to others. Second, the victim shows an impulsive and anti-social temper that focuses only on short term gratification based on the lowest motives. Because of these two symptoms, the victim either does not perceive or does not have any restraints on his destructive behavior. Finally, and most significantly, the victim feels no remorse for the consequences of his actions. Other criteria related to these includeparasitic behavior, superficial charm, grandiosity, ingenious criminal ideas, and assertive narcissism.14 Yeltsin, quoted in Leonov's book, called Chubais "an absolute Bolshevik by temperament and mentality." The basic consensus about Chubais' behavior is that he cared little for construction, and only for destruction.
8 Seward, Z. Harvard To Pay $26.5 Million in HIID Settlement. Crimson, July 20059 The guilty verdict and settlement issues are summarized in the Crimson article above.
10 Finucane, M "Feds Sue Harvard over Russia Advisers." ABD News; also see Wedel, Janine R. The HarvardBoys Do Russia. The Nation, 2008; and "Larry Summers, Robert Rubin: Will The Harvard Shadow EliteBankrupt The University And The Country?" The Huffington Post, Jan 2010: http://www.huffingtonpost.com/harry-r-lewis/larry-summers-robert-rubi_b_419224.html
11 These had something to do with comments about intellectual differences between men and women. That this contrived controversy erupted just as Harvard was paying off the federal government is no coincidence.
12 Levy, Ari. Summers Joins Andreessen Horowitz as a Part-Time Adviser to Entrepreneurs. Bloomberg, June2011 and Greenwald, Glenn. Larry Summers, Tim Geithner and Wall Street's ownership of government.Salon, 2009
13 As far as ivy league fraud and incompetence go, this is just one scandal out of hundreds.
The political lesson of this is unfortunate: the diagnostic criteria for criminal psychopathy are precisely the qualities required for success in big business and government. Even the best intentioned politician or businessman must display some combination of thesevices in order to successfully compete in these fields. What passes as virtue in libera lcapitalism is actually an undisguised form of mental illness.
Leonov speaks in more detail about his pathology:
Evil lurks in Chubais' colorless eyes. He arrogantly uses his supporters in public. Assertiveness and phony composure is his cynical way. Yeltsin was seen by him as merely manageable. Yeltsin was easy to manipulate due to his unpopularity. He did not have the intellectual wherewithal to fight back. He was compliant and signed anything on cue. He saw the Duma as mere formalism that can be bypassed. In reality, he just relied on Presidential decrees.
Of course, all of this in the name of democracy. Rather than deal with the fallout for the sins of others, Yeltsin did one excellent thing for Russia – appointed Vladimir Putin astemporary president on new year's eve, 1999. As was proper, Putin guaranteed Yeltsin immunity from prosecution, which meant he could no longer be used as a scapegoat. Putin, to make a long story very short, brought Russia from a GDP that was 98th in the world to 2014,where it is 8th. For the period 1991-1997, the transfer of wealth from Russia to the oligarchs was roughly $1.75 trillion. This was not "lost" to Russia, since wealth is not "lost." It merely changed hands. Under Chubais and Harvard, the economic contracted by almost 90%.
For all that, Yeltsin's party received 15% of the vote. With instructions from the US, Yeltsin, after this humiliation, created the idea of a "consensus document." The point is to create the illusion of agreement. Several western NGOs designed a position paper which supported "free market" reforms. Representatives of the new rich in Russia signed this document, which was then trumpeted as proof of social cohesion around Yeltsin.
Bernard Black et al, writing in 2009, described the devastation of this shock treatment for Russia and Ukraine in 1994:Russia's mass privatization. . . permitted insiders (managers and controlling shareholders) to engage in extensive "self" or "inside" dealing. . . which the government did nothing to control. Later privatization "auctions" were a massive giveaway of Russia's most important companies at bargain prices to a handful of well-connected "kleptocrats". . . Medium-term prospects are grim; the Russian ruble has plunged; the Russian government has defaulted on both its dollar denominated and ruble-denominated debt; most banks are bankrupt; corruption is rampant; tax revenues have collapsed; capital flight is pervasive; and the government (whomever the Prime Minister happens to be at the moment) seems clueless about what to do next.15
14 Skeem, JL, Polaschek, DLL, Patrick, CJ, and S Lilienfeld. Psychopathic Personality: Bridging the GapBetween Scientific Evidence and Public Policy. Psychological Science in the Public Interest 12 (3): 95–1622011
15 Black, et al, 1
This scheme represents one of the most luridly thoroughgoing, colossal and overwhelming failures in economic history. The role of the US government, international financial agencies and elite academia in this monumental disaster is well known. During the well publicized destruction and starvation of Russia, the British journal Euromoney named Chubais the "Worlds Greatest Finance Minister," as yet another means of displaying theelite's lack of accountability. In the Financial Times of 2004, A. Ostrovsky states "Chubais makes no excuses and feels no remorse over the most controversial privatization of all - the 'loans-for-shares' deal, in which he handed control of Russia's largest and most valuable assets to the group of tycoons [sic] in return for loans and support in the 1996 election for the then ailing Yeltsin."16
Once this became plain, the architects of the plan backed off, blaming everyone else for the issues. He writes in Foreign Affairs that the "Russian people" must vote for "democracy" in the 2000 elections. At the time, his own popularity was running about 2-3%. Hence, he did not mean "democracy" in the normal sense of the word. The real change was between 1994-1996. Here, the oligarchs were openly ruling with Yeltsin, who was often drunk and would disappear for weeks on end. It didn't matter. The oligarchs bought up most of the banks, then issued licenses to trade internationally that only they could have. As the government got desperate, the oligarchs stepped in and loaned Moscow the money to continue to function. Russian was not a "government" in any sense of the word. About 700 major families controlled almost the entire Russian economy and hence, the state as well.
The Results of the Scam
Government revenues went down by over 50% in this same time. Wages went down by about 75% by 1998. In 1992, the inflation rate was almost 1000%. Light industry, that is, the consumer sector, lost about 90% of its capital, the hardest hit sector of all. Machinery of all kinds fell by about 75%, meaning that 75% of the machines useful in the Russian economy had been liquidated (or were just not used) by 1998. The only thing that kept Russiaafloat was the black market.17The state could no longer enforce its laws, and hence, men started not showing up for the draft. Republic after republics declared independence, to be immediately recognized by the US. So, what can we conclude here? Very few deny that Yeltsin was a failure, but a failure of the worst kind. This kind of economic destruction has never been seen before outside of warfare. Government revenues and expenditures collapsed, hence, an already bad infrastructure was made far worse. Believe it or not, from 1992-1999, the Russian government collected about $6 billion all told. Hence, the state did not function.
Interest rates were high, about 300% in 1994, so credit was available only to the very rich, who controlled the (now private) central bank in the first place. Nearly everyoligarchical bank was connected with organized crime. In fact, there is no substantial difference between the oligarchs and organized crime.18
Under the oligarchs, tax collection collapsed. Industrial production went down by 25% in just a few years. By 1997, Russia had defaulted on its debts. Between 1991 and 1998,Russian GDP fell by almost 40%. Life expectancy went down from 68 to 56 years. Russians became impoverished. Money was so scarce that, by 1996, most trade was done through barter. Importantly, these oligarchs became a state within a state. Tax collection had collapsed, and the new Russia was completely broke. With the Asian meltdown in 1998, interest rates for Russian borrowing went to 300%. 19
16 Arkady Ostrovsky, Father to the Oligarchs. Financial Times, 2004.
17 Graham, Thomas. From Oligarchy to Oligarchy: The Structure of Russia's Ruling Elite. Demokratizatsiya7(3), (1997) 325-340
18 ibid
Yeltsin's popularity by 1998 went to about zero. Since then, pro-western (that is, pro freemarket) parties have polled no more than 5-7% of the vote combined. Yeltsin resigned the Presidency in 1999 and appointed Vladimir Putin as president.
A man of immense mental and physical strength, he sought to discipline the oligarchs, rebuild Russia and create a modern economy. As soon as Putin took office, he went after the media monopoly of Vladimir Guzinsky. Soon, numerous oil firms and banks were investigated for tax fraud. Some oligarchs fled the country, others like Mikhail Khordokovsky, ended up in prison. Attempting to split the oligarchs, playing one fraction against another, Putin's popularity soared, and Russian economic growth recovered.20 Since the meltdown in 1998, the Russian economy has gone from $1 trillion to $2.5 trillion by 2011. Growth rates remain high, and Russia enjoys both a trade and budget surplus. In the first eight years of Putin's presidency, the Russian GDP increased by over 75%.
Near the end of 1993, about 18-20 billion rubles had fled the country. As 1994 dawned, the population was impoverished. Malnutrition was becoming a problem, and alcoholism was increasing, as was suicide and all manner of social pathology. By 1994, thedeputy interior minister, Vladimir Kozlov, stated that about 40% of the economy is nowcriminalized. Leonov writes,
V. Polevanov [deputy prime minister at the time] notes that the total nominal valueof the voucher fund (about $1.5 trillion rubles) was 20 times less than the cost fixed assets industry, fired up for auction. One Moscow, where privatization was notcarried out on the residual and by market value, gained 20% of the enterprises 1.8 trillion rubles, while income from the rest of Russia in the first two years of privatization amounted to only $1 trillion rubles.
The above argument is abstract. In this section, a case study will be analyzed in detail to show how these forces come to be, how they operate, and how they attempt to insulate themselves from its consequences. Traumatic economic events do not occur due to abstract or impersonal forces. People, very powerful people, create the conditions that destroy entire economies. Economic self-interest is the engine of these irrational policies. Economics depicts social actors and institutions as calculating machines with no identity or purpose. The result is that economics is always treated in the passive voice, which is a fundamental mystification.
The Second Half of the 1990s
Showing Chubais complete rejection of supporting Russian interests, Leonov writes,Soon, it became clear that Chubais committed his sins only because he was controlled by others. The real owners of Russia. In 1998, Russia was continuing to disaster, that is, total bankruptcy. At this point, even after the default, American investors finally got the message and moved their cash out of Russian securities. This strengthened the effect of the default. As he became CEO of RAO (etc), he sold to foreigners a 32% chunk of Russian energy concerns, which violated all Russian laws. This meant, of course, that foreigners now could block Russian energy policy.
Chubais and his Harvard friends did not believe in their own rhetoric. Their had quickly moved into the most luxurious apartments and appointed to themselves very high salaries. Nothing about their world was based on the market principles they hypocriticallyadvocated. While advocating the rule of law, the oligarchical firms allied with Chubais werenot paying taxes; but it just so happens that the criminal code recently passed did not considerthis a crime. In 1997, there was no question that Chubais was evading taxes as well.
19 Ibid, cf esp 330-332
20 Sakwa, R. Putin and the Oligarchs. New Political Economy, 13(2) (2008): 185-191
Admitting his guilt, he paid about 500 million rubles, which was just a small amount of what he owed. His power did not diminish, but it remains a fact that no dictator in Russian history had the power that Chubais had. In the name of market reform and the rule of law,Chubais was receiving millions from shall companies for non existent services. Alexander Lebed remained the sole source of opposition to Chubais once Yeltsin sought treatment for heart illness. Chubais, realizing the general's recent spike in popularity for negotiating successfully with Chechen rebels, invented a slew of charges that the general conspired with these same militants. Chubais had become so powerful that he was no longer required to be creative. Lebed was dismissed from his post, proving that Chubais was, in fact, a dictator.21
In the name of the rule of law, Chubais made mafia gangster Boris Berezovsky "deputy director of the security council." Potanin, another underworld billionaire, was named "Deputy Prime Minister." Chubais was rubbing Russia's face in his power, typical of thepsychotic. Soon, all major television channels were in the hands of two mafia dons, Berezovsky and Guzinsky.
Leonov writes:
By 1996, all the financial power was concentrated in the hands of a small group of businessmen almost exclusively Jewish. It consisted of Boris Berezovsky, Vladimir Gusinsky, Alexander Smolensky, Pyotr Aven, Boris Chait, and Vitaly Malkin. Major bankers also included gentiles Potanin and Vinogradov, the only two.
Since the state had collapsed, these oligarchs acted as the state treasury and profited from it. Billions continued to be looted and wound up in banks in Israel, Britain and the US. Yet, elections were coming up. An ailing Yeltsin dismissed Chernomyrdin's "government," which included Chubais. Boris Berezovsky began, in his words, to rally all the "democraticand reformist forces in Russia" to prevent his own possible dispossession.
Typical of the psychotic, these men knew no limits. They began issuing high yield junk bonds, eventually promising to pay out, in some cases, 180%. Foreigners were buying these bonds to the point where almost 30% of all marketable securities of the Russian "state"were owned by outsiders. It was another scam, and the bankers refused to pay anypercentage, and even more, demanded the return of Chubais to government. Chubais quicklyflew to Washington, warning of a communist-nationalist resurgence. $6 billion was quickly given, which was never seen again.
Forming a shadow government, Russia's bankers dictated terms to Yeltsin. In their generosity, they agreed to not demand immediate debt payment from the Russian taxpayer. Yet, to punish Yeltsin, this oligarchy declared that it will reduce the sale of foreign currency. Putting downward pressure on the ruble, the oligarchs got their revenge for the tepid rebellion of Yeltsin. This is what drove the junk bonds as high as 180%; the ruble was suddenly worth nothing. In fear, Yeltsin put the banker's friend, Chernomyrdin, back in power in late summer, 1998.22
21 Ostrovsky, Arkady. Father to the Oligarchs. Financial Times, 2004
22 Russian Federation: Selected Issues 2012 International Monetary Fund IMF Country Report No. 12/218http://www.imf.org/external/pubs/ft/scr/2012/cr12218.pdf and Oliker, O, and T. Paley. Assessing Russia's
As typical of capitalist democracies, the political clique took the fall for the private sector. Yeltsin was blamed for the disaster, though his power was nil. That winter, Russia froze with millions unable to buy fuel. The perfect man was chosen for the prime ministership, Yevgeny Primakov, with no apparent beliefs of any kind. Quickly, Primakov demanded the return of Chubais and others who caused the mess, in order to repair it.
The default that August destroyed any bank not immediately under the oligarchs. GDPfell by 200-300 billion rubles. Industry was devastated. In one month, September of 1998, the average Russian income fell by over 30%. The Federation Council, too late, officially declared Chubais and crew as "negligent and incompetent." At the same time, the banking oligarchy was speculating in currency markets, making a profit estimated at the time of 5.5billion rubles in 1997.
Bill Clinton at the time cared only about the possibility of the Lebed coup. Primakov, however, began to strengthen the state as the only possibly solution to the total dissolution of Russia as a political entity. Soon, the dependable Zhirnovsky was again trotted out, with the occasional spray painted swastika to re-direct attention and create the "extremist" threat. More political groups, heretofore unknown, showed up in Moscow with strange uniforms and rallies. Gaidar was quick to link them with the communists, creating a convenient, single group for the masses to visualize.
In the midst of the meltdown, the system took advantage of the perfectly timed murder of Galina Starovoitova, a westernizing politician. 15,000 members of the opposition were rounded up and the "democratic forces" demanded emergency powers. The westenizers even created their own "nationalist" political group, "Fatherland" in order to siphon off opposition activists. In a display showing excellent acting, Yeltsin, in December of 1998, disbanded the group as a "threat" to "democracy." Of course, western Russia experts breathed a sigh of relief that "fascism" was not coming to Russia.
Solzhenitsyn refused to be a part of the charade, refusing to accept the Medal of St. Andrei from Yeltsin. A long time nationalist, Solzhenitsyn realized that in giving this award, Yeltsin was currying favor. Another misdirection was the attempted impeachment of Yeltsin in 1998, as if he was in charge of the disaster he only vaguely understood. Like the Clinton impeachment, it was an absurdity, deliberately designed to protect those with actual power (that is, the private sector) who created the disaster. The Commission decided that Yeltsin had "exceeded his power" as president, as if this is the reason why Muscovites just froze the previous winter. Using political figures to cover for the banking cartel is as old as the Medicis in Florence. Then, in another mockery of Russia, Yeltsin was blamed 100% for the disaster ofthe previous decade.23
Given all this, you are now ready to understand Putin. He came to power as Premier under Yeltsin when the latter resigned in 1999. Yeltsin's popularity rating was between 3-5%. All aid from the IMF was stolen and funneled into the hands of the oligarchs. Oil and gas firms had their profits pocketed in the same way, tax free. As Yeltsin retired, he gave many of his friends immunity from prosecution.
Putin as the Restorer of Sanity
Putin's leadership restored confidence in the currency, the state and the law. Oligarchystill exists in Russia (as elsewhere), but the monopoly position they used to wield is no more.Russian oil firms have come under the control, though not the ownership, of the state, sinceoligarchs were planning on selling assets to Exxon-Mobil, which led to the "KhordokovskyDecline. The Rand Corporation, 2002http://www.rand.org/content/dam/rand/pubs/monograph_reports/2007/MR1442.pdf23 Guriev, S. and Andrei Rachinsky (2005). The Role of Oligarchs in Russian Capitalism. Journal of EconomicPerspectives, 19(1), (2005) 131-150 http://pages.nes.ru/sguriev/papers/GurievRachinsky.pdfaffair." Mikhail Khordokovshy was an oligarch who controlled YUKOS, one of Russia's mostpowerful oil firms. In the interest of national security, Putin placed Khordokovsky under arrest. He was indeed guilty of tax evasion, but his plans to see Russian strategic assets to Americans was too much for Putin to stomach. The more oligarchs Putin put in jail, the more popular he becomes.Putin's policy has been to tread softly, taking on only the most powerful and obnoxious of the oligarchs. He has made strategic alliances with some in order to intimidate others While Russia has been rebuilt and the state became powerful, the oligarchs still have fight left in them, and Putin acts cautiously. Putin's basic approach has been to guide investment and control the flow of investment funds so they benefit Russia, not the oligarchy. The state does not own the economy, but it does oversee it. The oligarchy gave Putin no other choice.
The oligarchs financed all of Yeltsin's election campaigns and public image in Russia at the time. The point was to keep Yeltsin in power long enough so that the oligarchs could get their cash out of the country. They knew that eventually, a popular government would punish them. Putin, to a great extent, was this punishment.
Putin created an entirely new Russian government, when local districts under his control. Needless to say, the regional governments had been bought, and Putin could have no dealings with them. Some of them even had their own foreign policy! All those sent to govern the regions were from the security services or the army. This was no accident. Putin restructured the Upper House (the Federation Council) so as to permit his government to have a say in who gets appointed to it. 24
Putin insisted that local law must be consistent with federal law. This is because local leaders were creating their own countries, and this could not stand. Putin then permitted oligarchs and their puppets to be tried as violators of the constitution. Let me give you one example. In 2003, the oligarch Mikhail Khodorkovsky had taken over the Russian oil giant Yukos. Now, Putin got intelligence that Khodorkovsky was planning on entering intobusiness with Exxon-Mobil, permitting their penetration into the Russian market. Realizing this was a security threat (which it was, since it would mean that Exxon would control much of Russia's oil), he had Khodorkovsky arrested. Is list of crimes was well known, but the stategot him on taxes, which was a no-brainier. Putin was immediately attacked or "authoritarianism" by the press in the west.
So why does the west heap abuse on this man?
He reformed the tax code, putting in place a 13% flat tax on all income and investments. About half of regional prosecutors were removed from their positions due toe xtreme corruption. All Russians knew that already. He quickly ended the war in Chechnya, making sure a Chechen, pro-Russian government was put in charge.
He brought together the top 13 oligarchical families to a conference he organized. He told them that their rule was over. He forced them to pay millions in back taxes to the state, and to create several important charitable funds with their stolen money.
He was going to use the state to pressure their media into being more objective, pro-Russian and pro-state. Since the oligarchs controlled the press, it made sense that this had to be fought. To call this "assaulting press freedom" is absurd.
He realized that the political opposition in Russia was created by the oligarchy. Hence, there was no actual party development. Few parties had an agenda (except the communists, who did well), and these were mostly personal vehicles for their founders.
Putin also shifted investment away from oil and towards higher end items. This was needed to diversify the economy. The judiciary is independent. Today, about 70% of people who sue the state for various reasons win. Putin also introduced the jury.25
24 Sakwa, R. Putin and the Oligarchs. New Political Economy, 13(2), (2008), 185-191
It's tough to argue with Putin's success:
Labor productivity grew 49 percent 1995-2005, ranging from a 23 percent improvement in retailing to a 73 percent rise in construction. Total factor productivity grew by 5.8 percent per year, and the World Bank estimates that only one third of that increase came from increased capacity utilization. Firm turnover (i.e. the exit of inefficient firms and the entry of new ones) accounts for half the total improvement. Stock market capitalization rose to 44 percent of GDP by 2005, while the RTS index went from 300 in 2000 to 2,360 in December 2007.
In September 2006 the market capitalization of the 200 biggest firms was $833 billion (one third of which was Gazprom). The percent of the population living in poverty fell from 38 percent in 19998 to 9.5 percent in 2004, and the share of family budgets spent on food fell from 73% in 1992to 54% in 2004.
The only macroeconomic indicator that gives cause for concern is inflation, which dropped from 20 percent in 2000 to 9 percent in2006, before creeping back up to 11-12 percent level.26
Now, "market capitalization" and other such elite measures are not the whole story. They can exist with an economy failing in other respects. However, before wealth can b eredistributed, it has to exist. Accumulating what can then be redistributed are what these numbers are telling us. Given all this, however, it should come as no surprise that those who are condemning Putin today backed the privatization deals 20 years ago.
W. Thompson, writing in the Guardian in the Summer of 2003, states:
Fiscal consolidation has probably contributed more than any other single factor to restoring the authority and legitimacy of the formerly bankrupt state. Exceptionally favorable economic circumstances account for much of this improvement, but so also do better expenditure management, the reform of tax legislation and more efficient administration. The state's rule-making capacity has also grown markedly.
Unlike Yeltsin, Putin has a compliant parliament and presides over a government that, for all its internal divisions, is not riven by the factional conflicts that marked the 1990s. The result has been a flood of new legislation, much of it directly concerned with state reconstruction.27
Thompson speaks the truth. "Exceptionally favorable economic circumstances "can not cause national success. They do not in Ukraine, much of Africa or Detroit. They must be identified and utilized with substantial skill. Circumstances, of themselves, tell us nothing. The "compliant parliament" exists because of Putin's popularity, though Thomas seems to suggest that such legislative cooperation is required in times of emergency. Worried about bureaucratic corruption, Putin passed several laws limiting the discretionary power of federal agencies. Reform has reduced corruption, endemic at onepoint. Business is much easier to accomplish. Putin's reelection numbers roughly mirror his popularity in the country, and his opposition, backed by the US, has no agenda whatsoever.
25 Lavelle, P Putin's "Authoritarianism" vs. the "Commentariat". Commentary, 2004ahttp://www.futurebrief.com/peterlavelle004.asp and Lavelle, P Russia's Economic Future. Commentary,2004 http://www.futurebrief.com/peterlavelle.asp
26 Rutland, P. Putin's Economic Record. Wesleyan University, CT, 2008
27 Thompson, W. Putin's Success. The Guardian; June 2003 http://www.guardian.co.uk/world/2003/jun/08/russia.theworldtodayessays
They simply want more Yeltsinism.
As of January 1 of this 2013, Russia's anti-bribery legislation is the toughest in the world. In Russia, about 92% of American businesses think that Russian investment is a good thing, and that Russia is a decent place to do business. The IMF has stated that part of Putin's success is is utilization of capital that was left idle. Utilization of the country's resources has increased from about 50% in 2000 to over 76% today. But in order to do this, he needed to destroy the power of the oligarchs at the regional level.
Conclusion
The simple fact is that Putin's authoritarianism was forced upon him. He did use a heavy hand, but not nearly as heavy as Yeltsin. He realized that it was either a strong hand or chaos. As the state has been rebuilt, so have oversight bodies empowered to check it'sbehavior. Putin launched a bunch of commissions to look into corruption in different areas o the country, knowing full well that his popularity is based on that, plus economic growth.Putin needed to increase the potential of the state before the state itself could grow. Hence,the reformation of all police agencies gave them a direct line to the Kremlin, but, by 2002,crime was still rife. Now, all that has changed.It makes sense to call Putin a reaction to Yeltsin, chaos and oligarchy. His policies make no sense without the background. Things appear differently when contrasted with the free-fall collapse of the Yeltsin years.
Putin then did two things: first, to build up the rudiments of a new state, one that can permit business to thrive and destroy oligarchy. He needed a new law code, more centralized structures and an end to regional independence. Second, he was to create a new macroeconomic structure, with strong fiscal and oversight measures. Russia now runs a trade and budget deficit. He then stabilized the currency.
Once economic growth took off, he tried to get as much money out of foreign banks as possible. He first backed big business (for the sake of growth), then shifted more recently to backing smaller business. He then engaged in education and pension reform. He turned Russia to the east, allying with China to cooperate in their tremendous economic growth.
It is easy to forget that all that Putin is "blamed" for was suggested by western elites for Yeltsin. Liberal democracy in the eastern bloc has, without exception, merely been a cover for the most cynical sort of exploitation. In the name of "democracy" the eastern bloc melted into the bank accounts of both foreign and local elites. Warlords developed with private armies that, in the 1990s, were the subject of some journalistic treatment. A Russia in collapse is far more dangerous for the west than anything Putin has dreamed about.
Rationally, the enforced, rehearsed and studied contempt of Putin can only exist because the west had other plans for Russia, as a hinterland for cheap, educated labor and resources. Western collapse is assured precisely because Russia is not prostrate and under the thumb of Exxon-Mobil. Putin will have the last laugh, which, when the smoke clears, is the only real cause of the west's irrational hatred.
... ... ...
|
|
|
Feb 08, 2018 | turcopolier.typepad.com
David Habakkuk , 08 February 2018 at 09:57 AM
All,SmoothieX12 -> David Habakkuk ... , 08 February 2018 at 11:28 AMA number of points.
1. Not only large elements of the American and British intelligence services, but the 'Borgistas' in both countries, now including large elements of the academic/research apparatus and most of the MSM, really are joined at the hip.
It is thus an open question how far it is useful to speak of British intelligence intervening in the American election, rather than the American section of the 'Borg' and their partners in crime 'across the pond' colluding in an attempt to mount such an intervention with a greater appearance of 'plausible deniability.'
2. A relevant element of such collusion has to do with the creation of the Yeltsin-era Russian oligarchy. On this, a crucial source are interviews given by Christian Michel and Christopher Samuelson, who used to run a company called 'Valmet', to Catherine Belton, then with the 'Moscow Times', later with the 'Financial Times', in the days leading up to the conviction of Mikhail Khodorkovsky in May 2005.
(See http://mikhail_khodorkovsky_society_two.blogspot.co.uk .)
This describes the education in 'Western banking practices' given to him and his Menatep associates by Michel and Samuelson, starting as early as 1989, and also their crucial involvement with Berezovsky.
We are told by Belton that: 'With the help of British government connections, Valmet had already built up a wealthy clientele that included the ruling family of Dubai.' As to large ambitions which Michel and Samuelson had, she tells us: 'Used to dealing with the riches of Arab leaders, they found Menatep, by comparison still relatively small fry. By 1994, however, Menatep had started moving into all kinds of industries, from chemicals to textiles to metallurgy. But for Valmet, which by that time had already partnered up with one of the oldest banks in the United States, Riggs Bank, and for Menatep, the real prize was oil.'
Try Googling 'Riggs Bank' -- a lot of interesting information emerges, on matters such as their involvement with Prince Bandar. So, what we are dealing with is a joint Anglo-American attempt to create a 'comprador' oligarchy who could loot Russia's raw materials resources.
3. On the subject of the competence of MI6, what seems to me a total apposite judgement was provided by the man whom Steele and his associates framed over the death of Litvinenko, Andrei Lugovoi.
In the press conference in May 2007 where he responded to the request for his extradition submitted by the Crown Prosecution Service, he claimed that: 'Litvinenko used to say: They are total retards in the UK, they believe everything we are telling them about Russia.'
(See http://webarchive.nationalarchives.gov.uk/20160613090333/https://www.litvinenkoinquiry.org/evidence ">https://www.litvinenkoinquiry.org/evidence">http://webarchive.nationalarchives.gov.uk/20160613090333/https://www.litvinenkoinquiry.org/evidence .)
It seems to me quite likely, although obviously not certain, that this did indeed represent the view of many of the 'StratCom' operators around Berezovsky of people like Steele.
Throughout life, I have repeatedly come across a game played on certain kinds of élite Westerners, which, in honor of Kipling, who gave brilliant depictions of it, I call 'fool the stupid Sahib.' Both people from other societies, and their own, often play this game, and the underlying mentality not infrequently involves a combination of a sense of inferiority and contempt for the gullibility of people who are thought of -- commonly with justice -- as not knowing how the world really works, and thus being open to manipulation if one tells them what they want to hear.
Some fragments of a mass of evidence that this was precisely what Litvinenko did were presented by me in a previous post.
Irrespective of whether Lugovoi was accurately reporting what Litvinenko said, however, a mass of 'open source' evidence testifies to the extreme credulity with which officials and journalists on both sides of the Atlantic treat claims made by members of the 'StratCom' groups created by the oligarchs whose initial training was done by Valmet.
(One good example is provided by the way that Sir Robert Owen and his team took what the surviving members of the Berezovsky group told them on trust. Another is the extraordinary way MSM figures continue to claim made by Khodorkovsky and his associates seriously.)
Accordingly, when I read of anyone treating practically anything that Steele claims as plausible, I try to work out how much of a 'retard' they must be, starting with a baseline of about 50%.
4. In the light of the way that the reliance on the dossier in the FISA applications absent meaningful corroboration is being defended by Comey and others on the basis that Steele was 'considered reliable due to his past work with the Bureau', the question is how many people in the FBI must be considered to have a 'retard' rating somewhere over 90%.
When I discover that John Sipher is a 'former member of the CIA's Clandestine Service', who also worked 'on Russian espionage issues overseas, and in support of FBI counterintelligence investigations domestically,' then his apologetics for Steele seem not only to suggest he may be another 'total retard' -- but to point towards how the Anglo-American collaboration actually worked. (See https://www.politico.eu/article/devin-nunes-donald-trump-the-smearing-of-christopher-steele/ .)
5. Another characteristic of these 'retards' is that they seem unable to get their story straight. In his piece last September defending the dossier, Sipher wrote that 'While in London he worked as the personal handler of the Russian defector Alexander Litvinenko.' Apparently he didn't know that the 'party line' had changed -- that when Steele emerged from hiding in May, his mouthpiece, Luke Harding of the 'Guardian', had explained: 'As head of MI6's Russia desk, Steele led the inquiry into Litvinenko's polonium poisoning, quickly concluding that this was a Russian state plot. He did not meet Litvinenko and was not his case officer, friends said.'
(See http://www.slate.com/articles/news_and_politics/jurisprudence/2017/09/a_lot_of_the_steele_dossier_has_since_been_corroborated.html ; https://www.theguardian.com/uk-news/2017/mar/07/former-mi6-agent-christopher-steele-behind-trump-dossier-returns-to-work .)
6. In his attempts to defend the credibility of the dossier, Sipher also explains that its -- supposed -- author was President of the Cambridge Union. Here, two profiles of Steele on the 'MailOnline' site are of interest.
In one a contemporary is quoted:
"'When you took part in politics at the Cambridge Union, it was very spiteful and full of people spreading rumours," he said. "Steele fitted right in. He was very ambitious, ruthless and frankly not a very nice guy."
The other tells us that he born in Aden in 1964, and that his father was in the military, before going on to say that contemporaries recall an 'avowedly Left-wing student with CND credentials', while a book on the Union's history says he was a 'confirmed socialist'.
(See http://www.dailymail.co.uk/news/article-4115070/Chris-Whatsit-brilliant-Cambridge-spy-spent-life-battling-KGB-MI6-agent-wife-s-high-heels-stolen-Kremlin-spooks-revealed-Litvinenko-poisoned-Putin-s-thugs.html ; http://www.dailymail.co.uk/news/article-4115070/Chris-Whatsit-brilliant-Cambridge-spy-spent-life-battling-KGB-MI6-agent-wife-s-high-heels-stolen-Kremlin-spooks-revealed-Litvinenko-poisoned-Putin-s-thugs.html .)
From my own -- undistinguished and mildly irreverent -- Cambridge career, I can testify that there was indeed a certain kind of student politician, whom, if I may mix metaphors, fellow-students were perfectly well aware were going to arse-lick their way up some greasy pole or other in later life.
It was a world with which I came back in contact when, after living abroad and a protracted apprenticeship in print journalism, I accidentally found employment with what was then one of the principal television current affairs programmes in Britain. In the early 'Eighties I overlapped with Peter -- now Lord -- Mandelson, who became one of the principal architects of 'New Labour.'
7. Given that at this time British intelligence agencies were somewhat paranoid about CND, there is a small puzzle as to why on his graduation in 1986 Steele should have been recruited by MI6. In more paranoid moments I wonder whether he did not already have intelligence contacts through his father, and served as a 'stool pigeon' as a student.
But then, people like Sir John Scarlett and Sir Richard Dearlove may simply have concluded that someone with 'form' in smearing rivals at the Union was ideally suited for the kind of organisation they wanted to run.
8. From experience with Mandelson, and others, there are however other relevant things about this type. One is that they commonly love Machiavellian intrigue, and are very good at it, within the worlds they know and understand.
If however they have to try to cope with alien environments, where they do not know the people and where such intrigues are played much more ruthlessly, they are liable to find themselves hopelessly outclassed. (This can happen not simply with the politics of the post-Soviet space and the Middle East, but with some of the murkier undergrowths of local politics in London.)
Another limitation on their understanding is that the last thing they are interested in his how the world outside the bubbles they prefer to inhabit operates, and they commonly have absolutely contempt for 'deplorables', be they Russian, British or American. This can lead to political misjudgements.
9. So it is not really so surprising that, when Berezovsky's 'StratCom' people told them that the Putin 'sistema' really was the 'return of Karla', people like Steele believed everything they said, precisely as Lugovoi brought out.
There is I think every reason to believe that, from first to last, the intrigues in which he has been involved have involved close collusion between them and elements in American intelligence -- including the FBI. As a result, a lot of people on both sides of the Atlantic have repeatedly got into complex undercover contests in the post-Soviet space which ran right out of control, creating a desperate need for cover-ups. A similar pattern applies in relation to the activities of such people in the Middle East.
Another limitation on their understanding is that the last thing they are interested in his how the world outside the bubbles they prefer to inhabit operates, and they commonly have absolutely contempt for 'deplorables', be they Russian, British or American. This can lead to political misjudgements.It is not just "can" it very often does. The whole situation with Russia, of which, be it her economy, history, military, culture etc., is not known to those people, is a monstrous empirical evidence of a complete professional inadequacy of most people populating this bubble.
Most of those people are badly educated (I am not talking about worthless formal degrees they hold) and cultured. In dry scientific language it is called a "confirmation bias", in a simple human one it is called being ignorant snobs, that is why this IC-academic-political-media "environment" in case of Russia prefers openly anti-Russian "sources" because those "sources" reiterate to them what they want to hear to start with, thus Chalabi Moment is being continuously reproduced.
In case of Iraq, as an example, it is a tragedy but at least the world is relatively safe. With Russia, as I stated many times for years--they simply have no idea what they are dealing with. None. It is expected from people who are briefed by "sources" such as Russian fugitive London Oligarchy or ultra-liberal and fringe urban Russian "tusovka". Again, the level of "Russian Studies" in Anglophone world is appalling. In fact, it is clear and present danger since removes or misinterprets crucial information about the only nation in the world which can annihilate the United States completely in such a light that it creates a real danger even for a disastrous military confrontation. I would go on a limb here and say that US military on average is much better aware of Russia and not only in purely military terms. In some sense--it is an exception. But even there, there are some trends (and they are not new) which are very worrisome.
|
|
|
Apr 04, 2015 | Economist's View
Darryl FKA Ron -> pgl...
At the risk of oversimplifying might it not be as simple as stronger leanings towards IS-LM and kind are indicative of a bias towards full employment and stronger leanings towards DSGE, microfoundations, and kind are indicative of a bias towards low inflation?
IN general I consider over-simplification a fault, if and only if, it is a rigidly adhered to final position. This is to say that over-simplification is always a good starting point and never a good ending point. If in the end your problem was simple to begin with, then the simplified answer would not be OVER-simplified anyway. It is just as bad to over-complicate a simple problem as it is to over-simplify a complex problem. It is easier to build complexity on top of a simple foundation than it is to extract simplicity from a complex foundation.
A lot of the Chicago School initiative into microfoundations and DSGE may have been motivated by a desire to bind Keynes in a NAIRU straight-jacket. Even though economic policy making is largely done just one step at a time then that is still one step too much if it might violate rentier interests.
Darryl FKA Ron -> Barry...
There are two possible (but unlikely) schools of (generously attributed to as) thought for which internal consistency might take precedence over external consistency. One such school wants to consider what would be best in a perfect world full of perfect people and then just assume that is best for the real world just to let the chips fall where they may according to the faults and imperfections of the real world. The second such school is the one whose eyes just glaze over mesmerized by how over their heads they are and remain affraid to ask any question lest they appear stupid.
A more probable school of thought is that this game was created as a con and a cover for the status quo capitalist establishment to indulge themselves in their hard money and liquidity fetishes, consequences be damned.
Richard H. Serlin
Consistency sounds so good, Oh, of course we want consistency, who wouldn't?! But consistent in what way? What exactly do you mean? Consistent with reality, or consistent with people all being superhumans? Which concept is usually more useful, or more useful for the task at hand?Richard H. Serlin -> Richard H. Serlin...Essentially, they want models that are consistent with only certain things, and often because this makes their preferred ideology look far better. They want models, typically, that are consistent with everyone in the world having perfect expertise in every subject there is, from finance to medicine to engineering, perfect public information, and perfect self-discipline, and usually on top, frictionless and perfectly complete markets, often perfectly competitive too.
But a big thing to note is that perfectly consistent people means a level of perfection in expertise, public information, self-discipline, and "rationality", that's extremely at odds with how people actually are. And as a result, this can make the model extremely misleading if it's interpreted very literally (as so often it is, especially by freshwater economists), or taken as The Truth, as Paul Krugman puts it.
You get things like the equity premium "puzzle", which involves why people don't invest more in stocks when the risk-adjusted return appears to usually be so abnormally good, and this "puzzle" can only be answered with "consistency", that people are all perfectly expert in finance, with perfect information, so they must have some mysterious hidden good reason. It can't be at all that it's because 65% of people answered incorrectly when asked how many reindeer would remain if Santa had to lay off 25% of his eight reindeer ( http://richardhserlin.blogspot.com/2013/12/surveys-showing-massive-ignorance-and.html ).
Yes, these perfect optimizer consistency models can give useful insights, and help to see what is best, what we can do better, and they can, in some cases, be good as approximations. But to say they should be used only, and interpreted literally, is, well, inconsistent with optimal, rational behavior -- of the economist using them.
Of course, unless the economist using them is doing so to mislead people into supporting his libertarian/plutocratic ideology.dilbert dogbert
As an old broken down mech engineer, I wonder why all the pissing and moaning about micro foundations vs aggregation. In strength of materials equations that aggregate properties work quite well within the boundaries of the questions to be answered. We all know that at the level of crystals, materials have much complexity. Even within crystals there is deeper complexities down to the molecular levels. However, the addition of quantum mechanics adds no usable information about what materials to build a bridge with.
But, when working at the scale of the most advanced computer chips quantum mechanics is required. WTF! I guess in economics there is no quantum mechanics theories or even reliable aggregation theories.
Poor economists, doomed to argue, forever, over how many micro foundations can dance on the head of a pin.
RGC -> dilbert dogbert...
Endless discussions about how quantum effects aggregate to produce a material suitable for bridge building crowd out discussions about where and when to build bridges. And if plutocrats fund the endless discussions, we get the prominent economists we have today.
Darryl FKA Ron -> dilbert dogbert...
"...I guess in economics there is no quantum mechanics theories or even reliable aggregation theories..."
[I guess it depends upon what your acceptable confidence interval on reliability is. Most important difference that controls all the domain differences between physical science and economics is that underlying physical sciences there is a deterministic methodology for which probable error is merely a function of the inaccuracy in input metrics WHEREAS economics models are incomplete probabilistic estimating models with no ability to provide a complete system model in a full range of circumstances.
YOu can design and build a bridge to your load and span requirements with alternative models for various designs with confidence and highly effective accuracy repeatedly. No ecomomic theory, model, or combination of models and theories was ever intended to be used as the blueprint for building an economy from the foundation up.
With all the formal trappings of economics the only effective usage is to decide what should be done in a given set of predetermined circumstance to reach some modest desired effect. Even that modest goal is exposed to all kinds of risks inherent in assumptions, incomplete information, externalities, and so on that can produce errors of uncertain potential bounds.
Nonetheless, well done economics can greatly reduce the risks encountered in the random walk of economics policy making. So much so is this true, that the bigger questions in macro-economics policy making is what one is willing to risk and for whom.
The arguments over internal and external consistency of models is just a convenient misdirection from what policy makers are willing to risk and whose interests they are willing to risk policy decisions for.]
Darryl FKA Ron -> Peter K....
unless you have a model which maps the real world fairly closely like quantum mechanics.
[You set a bar too high. Macro models at best will tell you what to do to move the economy in the direction that you seek to go. They do not even ocme close to the notion of a theory of everything that you have in physics, even the theory of every little thing that is provided by quantum mechanics. Physics is an empty metaphor for economics. Step one is to forgo physics envy in pursuit of understanding suitable applications and domain constraints for economics models.
THe point is to reach a decision and to understand cause and effect directions. All precision is in the past and present. The future is both imprecise and all that there is that is available to change.
For the most part an ounce of common sense and some simple narrative models are all that are essential for making those policy decisions in and of themselves. HOWEVER, nation states are not ruled by economist philosopher kings and in the process of concensus decision making by (little r)republican governments then human language is a very imprecise vehicle for communicating logic and reason with respect to the management of complex systems. OTOH, mathematics has given us a universal language for communicating logic and reason that is understood the same by everyone that really understands that language at all. Hence mathematical models were born for the economists to write down their own thinking in clear precise terms and check their own work first and then share it with others so equipped to understand the language of mathematics. Krugman has said as much many times and so has any and every economist worth their salt.]
likbez -> Syaloch...
I agree with Pgl and PeterK. Certain commenters like Darryl seem convinced that the Chicago School (if not all of econ) is driven by sinister, class-based motives to come up justifications for favoring the power elite over the masses. But based on what I've read, it seems pretty obvious that the microfoundation guys just got caught up in their fancy math and their desire to produce more elegant, internally consistent models and lost sight of the fact that their models didn't track reality.
That's completely wrong line of thinking, IMHO.
Mathematical masturbations are just a smoke screen used to conceal a simple fact that those "economists" are simply banking oligarchy stooges. Hired for the specific purpose to provide a theoretical foundation for revanschism of financial oligarchy after New Deal run into problems. Revanschism that occurred in a form of installing neoliberal ideology in the USA in exactly the same role which Marxism was installed in the USSR.
With "iron hand in velvet gloves" type of repressive apparatus to enforce it on each and every university student and thus to ensure the continues, recurrent brainwashing much like with Marxism on the USSR universities.To ensure continuation of power of "nomenklatura" in the first case and banking oligarchy in the second. Connections with reality be damned. Money does not smell.
Economic departments fifth column of neoliberal stooges is paid very good money for their service of promoting and sustaining this edifice of neoliberal propaganda. Just look at Greg Mankiw and Rubin's boys.
But the key problem with neoliberalism is that the cure is worse then disease. And here mathematical masturbations are very handy as a smoke screen to hide this simple fact.
likbez -> likbez...
Here is how Rubin's neoliberal boy Larry explained the situation to Elizabeth Warren:
"Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People - powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize other insiders."
Elizabeth Warren, A Fighting Chance
Syaloch -> likbez...
Yeah, case in point.
|
|
|
Dec 19, 2017 | economistsview.typepad.com
Peter K. , April 03, 2017 at 01:31 PM
PGL puts the blame on Yeltsin and this is what Stiglitz writes:pgl -> Peter K.... , April 03, 2017 at 04:30 PM"I believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia's transition. This framework's influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work."
Larry Summers and Jeffrey Sachs were involved in this. It would be nice if they wrote mea culpas.
"Many in Russia believe that the US Treasury pushed Washington Consensus policies to weaken their country. The deep corruption of the Harvard University team chosen to "help" Russia in its transition, described in a detailed account published in 2006 by Institutional Investor, reinforced these beliefs.
I believe the explanation was less sinister: flawed ideas, even with the best of intentions, can have serious consequences. And the opportunities for self-interested greed offered by Russia were simply too great for some to resist. Clearly, democratization in Russia required efforts aimed at ensuring shared prosperity, not policies that led to the creation of an oligarchy."
Just look at what the West did to Iraq. Like Stiglitz I think it is more incompetence and ideology than a sinister plan to destroy Iraq and Russia. And we are reaping the results of that incompetence.
2008 was also incompetence, greed and ideology not some plot to push through "shock doctrines."
If the one percent were smart they would slowly cook the frog in the pot, where the frog doesn't notice, instead of having these crises which backfire.
Nice cherry picking especially for someone who never read his chapter 5 of that great 1997 book.libezkova -> pgl... , April 03, 2017 at 10:40 PMThe book is great, the article is junk. As Paine aptly said (in best Mark Twain style):"Too much [neo]liberal swamp gas"
|
|
|
Apr 03, 2017 | www.project-syndicate.org
April 2, 2017
Illiberal stagnation: Russia transition by Joseph E Stiglitz
I believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia's transition.
This framework's influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work....
... ... ...
Once one of the world's two superpowers, Russia's GDP is now about 40% of Germany's and just over 50% of France's. Life expectancy at birth ranks 153rd in the world, just behind Honduras and Kazakhstan.
pgl , April 03, 2017 at 09:52 AM
Stiglitz returns to the issue of why post Soviet Union Russia has done so poorly in terms of economics:RGC -> pgl... , April 03, 2017 at 10:11 AM"In terms of per capita income, Russia now ranks 73rd (in terms of purchasing power parity) – well below the Soviet Union's former satellites in Central and Eastern Europe. The country has deindustrialized: the vast majority of its exports now come from natural resources. It has not evolved into a "normal" market economy, but rather into a peculiar form of crony-state capitalism . Many had much higher hopes for Russia, and the former Soviet Union more broadly, when the Iron Curtain fell. After seven decades of Communism, the transition to a democratic market economy would not be easy. But, given the obvious advantages of democratic market capitalism to the system that had just fallen apart, it was assumed that the economy would flourish and citizens would demand a greater voice. What went wrong? Who, if anyone, is to blame? Could Russia's post-communist transition have been managed better? We can never answer such questions definitively: history cannot be re-run. But I believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia's transition. This framework's influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work. Fifteen years ago, when I wrote Globalization and its Discontents, I argued that this "shock therapy" approach to economic reform was a dismal failure. But defenders of that doctrine cautioned patience: one could make such judgments only with a longer-run perspective. Today, more than a quarter-century since the onset of transition, those earlier results have been confirmed, and those who argued that private property rights, once created, would give rise to broader demands for the rule of law have been proven wrong. Russia and many of the other transition countries are lagging further behind the advanced economies than ever. GDP in some transition countries is below its level at the beginning of the transition."
Stiglitz is not saying markets cannot work if the rules are properly constructed. He is saying that the Yeltsin rules were not as they were crony capitalism at their worse. And it seems the Putin rules are not much better. He mentions his 1997 book which featured as chapter 5 "Who Lost Russia". It still represents an excellent read.
"Shleifer also met his mentor and professor, Lawrence Summers, during his undergraduate education at Harvard. The two went on to be co-authors, joint grant recipients, and faculty colleagues.[5]RGC -> RGC... , April 03, 2017 at 10:26 AMDuring the early 1990s, Andrei Shleifer headed a Harvard project under the auspices of the Harvard Institute for International Development (HIID) that invested U.S. government funds in the development of Russia's economy.
Schleifer was also a direct advisor to Anatoly Chubais, then vice-premier of Russia, who managed the Rosimushchestvo (Committee for the Management of State Property) portfolio and was a primary engineer of Russian privatization. Shleifer was also tasked with establishing a stock market for Russia that would be a world-class capital market.[14]
In 1996 complaints about the Harvard project led Congress to launch a General Accounting Office investigation, which stated that the Harvard Institute for International Development (HIID) was given "substantial control of the U.S. assistance program."[15]
In 1997, the U.S. Agency for International Development (USAID) canceled most of its funding for the Harvard project after investigations showed that top HIID officials Andre Schleifer and Johnathan Hay had used their positions and insider information to profit from investments in the Russian securities markets. Among other things, the Institute for a Law Based Economy (ILBE) was used to assist Schleifer's wife, Nancy Zimmerman, who operated a hedge fund which speculated in Russian bonds.[14]
In August 2005, Harvard University, Shleifer and the Department of Justice reached an agreement under which the university paid $26.5 million to settle the five-year-old lawsuit. Shleifer was also responsible for paying $2 million worth of damages, though he did not admit any wrongdoing
Awards:libezkova said in reply to RGC... , April 03, 2017 at 08:18 PMJohn Bates Clark Medal (1999)
"He has held a tenured position in the Department of Economics at Harvard University since 1991 and was, from 2001 through 2006, the Whipple V. N. Jones Professor of Economics."
My impression is that Andrei Shleifer was a marionette, a low level pawn in a big game. The fact that he was a greedy academic scum, who tried to amass a fortune in Russia probably under influence of his wife (his wife, a hedge fund manager, was GS alumnae and was introduced to him by Summers) is peripheral to the actual role he played.libezkova said in reply to RGC... , April 03, 2017 at 07:51 PMJeffey Sacks also played highly negative role being the architect of "shock therapy": the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large-scale privatization of previously public-owned assets.
In other words "shock therapy" = "economic rape"
As Anne Williamson said: "Instead, after robbing the Russian people of the only capital they had to participate in the new market – the nation's household savings – by freeing prices in what was a monopolistic economy and which delivered a 2500% inflation in 1992, America's "brave, young Russian reformers" ginned-up a development theory of "Big Capitalism" based on Karl Marx's mistaken edict that capitalism requires the "primitive accumulation of capital". Big capitalists would appear instantly, they said, and a broadly-based market economy shortly thereafter if only the pockets of pre-selected members of their own ex-Komsomol circle were properly stuffed. Those who hankered for a public reputation were to secure the government perches from which they would pass state assets to their brethren in the nascent business community, happy in the knowledge that they too would be kicked back a significant cut of the swag. The US-led West accommodated the reformers' cockeyed theory by designing a rapid and easily manipulated voucher privatization program that was really only a transfer of title and which was funded with $325 million US taxpayers' dollars. "
See also http://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtml
From the article:paine -> DrDick ... , April 03, 2017 at 04:22 PM"Many in Russia believe that the US Treasury pushed Washington Consensus policies to weaken their country. The deep corruption of the Harvard University team chosen to "help" Russia in its transition, described in a detailed account published in 2006 by Institutional Investor, reinforced these beliefs."
This was not a corruption. This was the intent on Clinton administration. I would think about it as a planned operation.
The key was that the gangster capitalism model was enforced by the Western "Washington consensus" (of which IMF was an integral part) -- really predatory set of behaviors designed to colonize Russia and make is US satellite much like Germany became after WWII but without the benefit of Marshall plan.
Clinton consciously chose this criminal policy among alternatives: kick the lying body. So after Russian people get rid of corrupt and degraded Communist regime, they got under the iron hill of US gangsters from Clinton administration.
My impression is that Clinton was and is a criminal. And he really proved to be a very capable mass murderer. And his entourage had found willing sociopaths within Russian society (as well as in other xUUSR republics; Ukraine actually fared worse then Russia as for the level of plunder) who implemented neoliberal policies. Yegor Gaidar was instrumental in enforcing Harvard-designed "shock therapy" on Russian people. He also create the main neoliberal party in Russia -- the Democratic Choice of Russia - United Democrats. Later in 1990s, it became the Union of Right Forces.
http://www.vdare.com/posts/the-rape-of-russia-explained-by-anne-williamson
== quote ==
Testimony of Anne Williamson
Before the Committee on Banking and Financial Services of the United States House of Representatives
September 21, 1999
In the matter before us – the question of the many billions in capital that fled Russia to Western shores via the Bank of New York and other Western banks – we have had a window thrown open on what the financial affairs of a country without property rights, without banks, without the certainty of contract, without an accountable government or a leadership decent enough to be concerned with the national interest or its own citizens' well-being looks like. It's not a pretty picture, is it? But let there be no mistake, in Russia the West has truly been the author of its own misery. And there is no mistake as to who the victims are, i.e. Western, principally U.S., taxpayers and Russian citizens' whose national legacy was stolen only to be squandered and/or invested in Western real estate and equities markets... ... ...
== end of quote ==A lot of people, especially pensioners, died because of Clinton's gangster policies in xUUSR space.
I am wondering how Russian managed to survive as an independent country. The USA put tremendous efforts and resources in destruction of Russian economy and colonizing its by creating "fifth column" on neoliberal globaliozation.
all those criminal oligarchs hold moved their capitals to the West as soon as they can because they were afraid of the future. Nobody persecuted them and Western banks helped to extract money from Russia to the extent that some of their methods were clearly criminals.
Economic devastation was comparable with caused by Nazi armies, although amount of dead was less, but also in millions.
Questionable figures from the West flowed into Russia and tried to exploit still weak law system by raiding the companies. Some of them were successful and amassed huge fortunes. Some ended being shot. Soros tried, but was threatened to be shot by Berezovsky and choose to leave for the good.
Especially hard hit was military industrial complex, which was oversized in any case, but which was an integral part of Soviet economy and employed many highly qualified specialists. Many of whom later emigrated to the West. At some point it was difficult to find physics department in the US university without at least a single person from xUSSR space (not necessary a Russian)
Too much liberal swamp gaslibezkova said in reply to paine... , April 03, 2017 at 09:33 PM"Too much [neo]liberal swamp gas"anne -> paine... , April 03, 2017 at 06:20 PMthis is almost Mark Twain's level quote :-).
But I would conjecture the Deng path trumps the Yeltsin pathanne -> anne... , April 03, 2017 at 06:22 PM[ Really? Would the conjecture rest on growth of real Gross Domestic Product in China averaging 9.6% yearly while growth of real per capita GDP averaged 8.6% yearly these last 40 years? ]
https://fred.stlouisfed.org/graph/?g=cacKanne -> anne... , April 03, 2017 at 06:27 PMAugust 4, 2014
Real per capita Gross Domestic Product for China and Russia, 1990-2015
(Percent change)
https://fred.stlouisfed.org/graph/?g=cacOAugust 4, 2014
Real per capita Gross Domestic Product for China and Russia, 1990-2015
(Indexed to 1990)
https://fred.stlouisfed.org/graph/?g=cacQlibezkova said in reply to paine... , April 03, 2017 at 08:28 PMNovember 1, 2014
Total Factor Productivity at Constant National Prices for China and Russia, 1990-2014
https://fred.stlouisfed.org/graph/?g=cacRNovember 1, 2014
Total Factor Productivity at Constant National Prices for China and Russia, 1990-2014
(Indexed to 1990)
"But i'd conjecture the Deng path trumps the yeltsin path"anne -> paine... , April 04, 2017 at 07:52 AMTrue.
But I would conjecture the Deng Xiaoping path trumps the Boris Yeltsin pathpoint -> pgl... , April 03, 2017 at 06:28 PM[ What then is the point of such a conjecture when real per capita GDP in Russia grew a mere 15.8% from 1990 through 2015 while in China real per capita grew by a remarkable 789.1%?
Total factor productivity in Russia decreased by 16.9% from 1990 through 2014, while in China total factor productivity increased by 76.4%.
The inability to understand what China has accomplished is shocking to me. Possibly, rethinking fairly is in order. ]
It may eventually prove to be generous to describe Russia's misfortune as "the legacy of the flawed Washington Consensus that shaped Russia's transition" according to Stiglitz. It may prove rather to be "the legacy of *intentionally* flawed consensus".anne -> anne... , April 03, 2017 at 10:01 AMhttps://en.wikipedia.org/wiki/Washington_Consensuspgl -> anne... , April 03, 2017 at 10:18 AMThe term Washington Consensus was coined in 1989 by English economist John Williamson to refer to a set of 10 relatively specific economic policy prescriptions that he considered constituted the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions such as the International Monetary Fund (IMF), World Bank, and the US Treasury Department. The prescriptions encompassed policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
Redirection of public spending from subsidies toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
Tax reform, broadening the tax base and adopting moderate marginal tax rates;
Interest rates that are market determined and positive (but moderate) in real terms;
Competitive exchange rates;
Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
Liberalization of inward foreign direct investment;
Privatization of state enterprises;
Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
Legal security for property rights.
RGC -> pgl... , April 03, 2017 at 10:34 AM"privatization, no matter how it was done, with speed taking precedence over everything else".It does matter how it is done as Stiglitz, Dani Rodrik, and even that ProMarket blog often point out. It was done very poorly under Yeltsin.
It was done according to the "expert" advice of deregulatin' Larry's gang from Harvard.RGC -> RGC... , April 03, 2017 at 10:46 AMDoes deregulatin' Larry still have a job? Why?Peter K. -> RGC... , April 03, 2017 at 01:24 PMPeter K. -> Peter K.... , April 03, 2017 at 01:33 PM"It was done according to the "expert" advice of deregulatin' Larry's gang from Harvard."Yes PGL blames Yeltsin but it was the Western advisers who forced disastrous shock therapy on Russia. See the IMF, Europe and Greece for another example. No doubt PGL blames the Greeks. He always blames the victims.
PGL blames Yeltsin but even Stiglitz writes that it was the Washington Consensus which was to blame for the poor transition and disastrous collapse of Russia. Now we are reaping the consequences. Just like with Syria, ISIL and Iraq.pgl -> Peter K.... , April 03, 2017 at 04:27 PMWTF? The IMF may have given bad advice but Yeltsin ran the show. And if you think Yeltsin was the victim - then you are really lost.anne -> pgl... , April 03, 2017 at 11:15 AM"No doubt PGL blames the Greeks."
You do lie 24/7. Pathetic.
Suppose though the matter with privatization is not so much speed but not understanding what should not be subject to privatizing, such as soft and hard infrastructure.anne -> anne... , April 03, 2017 at 10:46 AMThat a Washington Consensus approach to Russian development proved obviously faulty is important because I would argue the approach has repeatedly proved faulty from Brazil to South Africa to the Philippines... When the consensus has been turned away from as in Brazil for several years the development results have dramatically changed but turning from the approach which allows for severe concentrations of wealth has proved politically difficult as we find now in Brazil.anne -> anne... , April 03, 2017 at 10:48 AMhttps://fred.stlouisfed.org/graph/?g=cad0anne -> anne... , April 03, 2017 at 10:55 AMAugust 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil, South Africa and Russia, 1990-2015
(Percent change)
https://fred.stlouisfed.org/graph/?g=cacXAugust 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil, South Africa and Russia, 1990-2015
(Indexed to 1990)
The range in real per capita GDP growth from 1990 to 2015 extends from 15.8% to 19.8% to 41.1% to 223.1% to 789.1%. This range needs to be thoroughly analyzed in terms of reflective policy.anne -> anne... , April 03, 2017 at 10:49 AMhttps://fred.stlouisfed.org/graph/?g=cad4anne -> anne... , April 03, 2017 at 11:00 AMNovember 1, 2014
Total Factor Productivity at Constant National Prices for China, India, Brazil, South Africa and Russia, 1990-2014
https://fred.stlouisfed.org/graph/?g=cad7
November 1, 2014
Total Factor Productivity at Constant National Prices for China, India, Brazil, South Africa and Russia, 1990-2014
(Indexed to 1990)
The range in total factor productivity growth or decline from 1990 to 2014 extends from a decline of - 16.9% to - 12.2% to - 5.1% to growth of 40.9% and 76.4%. Again, this range needs to be thoroughly analyzed in terms of reflective policy.anne -> anne... , April 03, 2017 at 11:10 AMThe persuasiveness of the Washington Consensus approach to development strikes me as especially well illustrated by the repeated, decades-long insistence by Western economists that Chinese development is about to come to a crashing end. The insistence continues with an almost daily repetition in the likes of The Economist or Financial Times.I would suggest the success of China thoroughly studied provides us with remarkable policy prescriptions.
|
|
|
Jul 13, 2017 | consortiumnews.com
Exclusive: A documentary debunking the Magnitsky myth, which was an opening salvo in the New Cold War, was largely blocked from viewing in the West but has now become a factor in Russia-gate, reports Robert Parry.
Near the center of the current furor over Donald Trump Jr.'s meeting with a Russian lawyer in June 2016 is a documentary that almost no one in the West has been allowed to see, a film that flips the script on the story of the late Sergei Magnitsky and his employer, hedge-fund operator William Browder.
The Russian lawyer, Natalie Veselnitskaya, who met with Trump Jr. and other advisers to Donald Trump Sr.'s campaign, represented a company that had run afoul of a U.S. investigation into money-laundering allegedly connected to the Magnitsky case and his death in a Russian prison in 2009. His death sparked a campaign spearheaded by Browder, who used his wealth and clout to lobby the U.S. Congress in 2012 to enact the Magnitsky Act to punish alleged human rights abusers in Russia. The law became what might be called the first shot in the New Cold War.
According to Browder's narrative, companies ostensibly under his control had been hijacked by corrupt Russian officials in furtherance of a $230 million tax-fraud scheme; he then dispatched his "lawyer" Magnitsky to investigate and – after supposedly uncovering evidence of the fraud – Magnitsky blew the whistle only to be arrested by the same corrupt officials who then had him locked up in prison where he died of heart failure from physical abuse.
Despite Russian denials – and the "dog ate my homework" quality of Browder's self-serving narrative – the dramatic tale became a cause celebre in the West. The story eventually attracted the attention of Russian filmmaker Andrei Nekrasov, a known critic of President Vladimir Putin. Nekrasov decided to produce a docu-drama that would present Browder's narrative to a wider public. Nekrasov even said he hoped that he might recruit Browder as the narrator of the tale.
However, the project took an unexpected turn when Nekrasov's research kept turning up contradictions to Browder's storyline, which began to look more and more like a corporate cover story. Nekrasov discovered that a woman working in Browder's company was the actual whistleblower and that Magnitsky – rather than a crusading lawyer – was an accountant who was implicated in the scheme.
So, the planned docudrama suddenly was transformed into a documentary with a dramatic reversal as Nekrasov struggles with what he knows will be a dangerous decision to confront Browder with what appear to be deceptions. In the film, you see Browder go from a friendly collaborator into an angry adversary who tries to bully Nekrasov into backing down.
Blocked Premiere
Ultimately, Nekrasov completes his extraordinary film – entitled "The Magnitsky Act: Behind the Scenes" – and it was set for a premiere at the European Parliament in Brussels in April 2016. However, at the last moment – faced with Browder's legal threats – the parliamentarians pulled the plug. Nekrasov encountered similar resistance in the United States, a situation that, in part, brought Natalie Veselnitskaya into this controversy.
Film director Andrei Nekrasov, who produced "The Magnitsky Act: Behind the Scenes."
As a lawyer defending Prevezon, a real-estate company registered in Cyprus, on a money-laundering charge, she was dealing with U.S. prosecutors in New York City and, in that role, became an advocate for lifting the U.S. sanctions, The Washington Post reported.
That was when she turned to promoter Rob Goldstone to set up a meeting at Trump Tower with Donald Trump Jr. To secure the sit-down on June 9, 2016, Goldstone dangled the prospect that Veselnitskaya had some derogatory financial information from the Russian government about Russians supporting the Democratic National Committee. Trump Jr. jumped at the possibility and brought senior Trump campaign advisers, Paul Manafort and Jared Kushner, along.
By all accounts, Veselnitskaya had little or nothing to offer about the DNC and turned the conversation instead to the Magnitsky Act and Putin's retaliatory measure to the sanctions, canceling a program in which American parents adopted Russian children. One source told me that Veselnitskaya also wanted to enhance her stature in Russia with the boast that she had taken a meeting at Trump Tower with Trump's son.
But another goal of Veselnitskaya's U.S. trip was to participate in an effort to give Americans a chance to see Nekrasov's blacklisted documentary. She traveled to Washington in the days after her Trump Tower meeting and attended a House Foreign Affairs Committee hearing, according to The Washington Post.
There were hopes to show the documentary to members of Congress but the offer was rebuffed. Instead a room was rented at the Newseum near Capitol Hill. Browder's lawyers. who had successfully intimidated the European Parliament, also tried to strong arm the Newseum, but its officials responded that they were only renting out a room and that they had allowed other controversial presentations in the past.
Their stand wasn't exactly a profile in courage. "We're not going to allow them not to show the film," said Scott Williams, the chief operating officer of the Newseum. "We often have people renting for events that other people would love not to have happen."
In an article about the controversy in June 2016, The New York Times added that "A screening at the Newseum is especially controversial because it could attract lawmakers or their aides." Heaven forbid!
One-Time Showing
So, Nekrasov's documentary got a one-time showing with Veselnitskaya reportedly in attendance and with a follow-up discussion moderated by journalist Seymour Hersh. However, except for that audience, the public of the United States and Europe has been essentially shielded from the documentary's discoveries, all the better for the Magnitsky myth to retain its power as a seminal propaganda moment of the New Cold War.
Financier William Browder (right) with Magnitsky's widow and son, along with European parliamentarians.
After the Newseum presentation, a Washington Post editorial branded Nekrasov's documentary Russian "agit-prop" and sought to discredit Nekrasov without addressing his many documented examples of Browder's misrepresenting both big and small facts in the case. Instead, the Post accused Nekrasov of using "facts highly selectively" and insinuated that he was merely a pawn in the Kremlin's "campaign to discredit Mr. Browder and the Magnitsky Act."
The Post also misrepresented the structure of the film by noting that it mixed fictional scenes with real-life interviews and action, a point that was technically true but willfully misleading because the fictional scenes were from Nekrasov's original idea for a docu-drama that he shows as part of explaining his evolution from a believer in Browder's self-exculpatory story to a skeptic. But the Post's deception is something that almost no American would realize because almost no one got to see the film.
The Post concluded smugly: "The film won't grab a wide audience, but it offers yet another example of the Kremlin's increasingly sophisticated efforts to spread its illiberal values and mind-set abroad. In the European Parliament and on French and German television networks, showings were put off recently after questions were raised about the accuracy of the film, including by Magnitsky's family.
"We don't worry that Mr. Nekrasov's film was screened here, in an open society. But it is important that such slick spin be fully exposed for its twisted story and sly deceptions."
The Post's gleeful editorial had the feel of something you might read in a totalitarian society where the public only hears about dissent when the Official Organs of the State denounce some almost unknown person for saying something that almost no one heard.
New Paradigm
The Post's satisfaction that Nekrasov's documentary would not draw a large audience represents what is becoming a new paradigm in U.S. mainstream journalism, the idea that it is the media's duty to protect the American people from seeing divergent narratives on sensitive geopolitical issues.
Over the past year, we have seen a growing hysteria about "Russian propaganda" and "fake news" with The New York Times and other major news outlets eagerly awaiting algorithms that can be unleashed on the Internet to eradicate information that groups like Google's First Draft Coalition deem "false."
First Draft consists of the Times, the Post, other mainstream outlets, and establishment-approved online news sites, such as Bellingcat with links to the pro-NATO think tank, Atlantic Council. First Draft's job will be to serve as a kind of Ministry of Truth and thus shield the public from information that is deemed propaganda or untrue.
In the meantime, there is the ad hoc approach that was applied to Nekrasov's documentary. Having missed the Newseum showing, I was only able to view the film because I was given a special password to an online version.
From searches that I did on Wednesday, Nekrasov's film was not available on Amazon although a pro-Magnitsky documentary was. I did find a streaming service that appeared to have the film available.
But the Post's editors were right in their expectation that "The film won't grab a wide audience." Instead, it has become a good example of how political and legal pressure can effectively black out what we used to call "the other side of the story." The film now, however, has unexpectedly become a factor in the larger drama of Russia-gate and the drive to remove Donald Trump Sr. from the White House.
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America's Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com ).
Joseph A. Haran, Jr. , July 13, 2017 at 2:13 pm
Rob Roy , July 13, 2017 at 2:45 pmWhy are so many people–corporate executives, governments, journalists, politicians–afraid of William Browder? Why isn't Andrei Nekrasov's film available via digital versatile disk, for sale on line? Mr. Parry, why can't you find it? Oh, wait: You did! Heaven forbid we, your readers, should screen it. Since you, too, are helping keep that film a big fat secret at least give us a few clues as to where we can find it. Throw us a bone! Thank you.
ToivoS , July 13, 2017 at 4:01 pmParry isn't keeping the film viewing a secret. He was given a private password and perhaps can get permission to let the readers here have it. It isn't up to Parry himself but rather to the person(s) who have the rights to the password. I've come across this problem before.
Lisa , July 13, 2017 at 6:28 pmParry wrote: I did find a streaming service that appeared to have the film available.
Any link?? I am willing to buy it.
Lisa , July 13, 2017 at 6:31 pmThis may not be of much help, as the film is dubbed in Russian. If you want to look for the Russian versions on the internet, search for: "????? ?????? ????????? "????? ???????????. ?? ????????"
https://my.mail.ru/bk/n-osetrova/video/71/18682.html?time=155&from=videoplayer
I'll keep looking for the film with translation into some other language.
Lisa , July 13, 2017 at 6:45 pmSorry, the Russian text did not appear. Try with latin alphabet: Film Andreia Nekrasova "Zakon Magnitskogo. Za kulisami"
Abe , July 13, 2017 at 5:21 pmhttps://www.youtube.com/watch?v=8d1ylakLMNU
This is the same dubbed version, on youtube.
backwardsevolution , July 13, 2017 at 5:51 pmHysterical agit-prop troll insists that world trembles in fear of "genuine American hero" William Browder. John McCain in 2012 was too busy trembling to notice that Browder had given up his US citizenship in 1998 in order to better profit from the Russian financial crisis.
incontinent reader , July 13, 2017 at 6:24 pmAbe – and to escape U.S. taxes.
Vincent Castigliola , July 13, 2017 at 2:38 pmWell stated.
Anna , July 13, 2017 at 5:54 pmMr. Parry,
Excellent report and analysis. Thanks for timely reminder regarding the Magitsky story and the fascinating background regarding Andrei Nekrasov's film, in particular its metamorphosis and subsequent aggressive suppression. Both of those factors render the film a particular credibility and wish on my part to view it.
Is there any chance you can share information regarding a means of accessing the forbidden film?
I am beginning to feel more and more like the citizens of the old USSR, who, were to my recollection and understanding back in the 50's and 60's:. Longing to read and hear facts suppressed by the communist state, dependent upon the Voice of America and underground news sources within the Soviet Union for the truth. RU, Consortium news, et. al. seem somewhat a parallel, and 1984 not so distant.
Last night, After watching Max Boot self destruct on Tucker Carlson, i was inspired to watch episode 2 of The Putin Interviews. I felt enlightened. If only the Establishment Media could turn from promoting its agenda of shaping and suppressing the news into accurately reporting it.
Media corruption is not so new. Yellow journalism around the turn of the 19th century, took us into a progression of wars. The War to End All Wars didn't. Blame the munitions makers and the Military Industrial Complex if you will, but a corrupt medial, at the very least enabled a progression of wars over the last 120 or so years.
Demonizing other countries is bad enough, but wilfully ignoring the potential for a nuclear war to end not only war, but life as we know it, is appalling.
Vincent Castigliola , July 13, 2017 at 9:41 pm"After watching Max Boot self destruct on Tucker Carlson "
Am I the only one who thinks that Max Boot should have been institutionalized for some time already? He is not well.Anna , July 14, 2017 at 9:31 amAnna,
Perhaps Max can share a suite with John McCain. Sadly, the illness is widespread and sometimes seems to be in the majority. Neo con/lib both are adamant in finding enemies and imposing punishment.Finding splinters, ignoring beams. Changing regimes everywhere. Making the world safe for Democracy. Unless a man they don't like get elected
orwell , July 14, 2017 at 3:44 pmMax Boot parents are Russain Jews who seemingly instilled in him a rabid hatred for everything Russian. The same is with Aperovitch, the CrowdStrike fraudster. The first Soviet (Bolshevik) government was 85% Jewish. Considering what happened to Russia under Bolsheviks, it seems that Russians are supremely tolerant people.
Cal , July 14, 2017 at 8:03 pmAnna, Anti-Semitism will get you NOWHERE, and you should be ashamed of yourself for injecting such HATRED into the rational discussion here.
Kiza , July 15, 2017 at 1:02 amDear orwell
re Anna
Its not anti Semitic if its true .and its true he is a Russian Jew and its very obvious he hates Russia–as does the whole Jewish Zionist crowd in the US.
Taras77 , July 13, 2017 at 11:17 pmorwell, I wonder why the truth always turns out to be so anti-semitic!?
Zachary Smith , July 13, 2017 at 2:51 pmI hope you caught the preceding tucker interview with Ralph Peters, who says he is a retired us army LTC. He came off as completely deranged and hysterical. The two interviews back to back struck me as neo con desperation and panic. My respect for Tucker just went up for taking on these two wackos.
Dan Mason , July 13, 2017 at 6:42 pmThe fact that the film is being suppressed by everybody is significant to me. I don't know a thing about the "facts" of the Magnitsky case, and a quick look at the results of a Google search suggests this film isn't going to be available to me unless I shell out some unknown amount of money.
If the producers want the film to be seen, perhaps they ought to release it for download to any interested parties for a nominal sum. This will mean they won't make any profit, but on the other hand they will be able to spit in the eyes of the censors.
orwell , July 14, 2017 at 3:48 pmI went searching the net for access to this film and found that I was blocked at every turn. I did find a few links which all seemed to go to the same destination which claimed to provide access once I registered with their site. I decided to avoid that route. I don't really have that much interest in the Magnitsky affair, but I do wonder why we are being denied access to information. Who has this kind of influence, and why are they so fearful. I'm really afraid that we already live in a largely hidden Orwellian world. Now where did I put that tin foil hat?
Drew Hunkins , July 13, 2017 at 2:53 pmThe Orwellian World is NOT HIDDEN, it is clearly visible.
backwardsevolution , July 13, 2017 at 3:30 pmNekrasov, though he's a Putin critic, is a genuine hero in this instance. He ulitimately put his preconceptions aside and took the story where it truly led him. Nekrasov deserves boatloads of praise for his handling of Browder and his final documentary film product.
BannanaBoat , July 13, 2017 at 6:12 pmDrew – good comment. It's very hard to "turn", isn't it? I wonder if many people appreciate what it takes to do this. Easier to justify, turn a blind eye, but to actually stop, question, think, and then follow where the story leads you takes courage and strength.
backwardsevolution , July 14, 2017 at 1:49 amEspecially when your bucking an aggressive billionaire.
Zim , July 13, 2017 at 3:11 pmBannanaBoat – that too!
Virginia , July 13, 2017 at 6:13 pmThis is interesting:
"In December 2015, The Wall Street Journal reported that Hillary Clinton opposed the Magnitsky Act while serving as secretary of state. Her opposition coincided with Bill Clinton giving a speech in Moscow for Renaissance Capital, a Russian investment bank! for which he was paid $500,000.
"Mr. Clinton also received a substantial payout in 2010 from Renaissance Capital, a Russian investment bank whose executives were at risk of being hurt by possible U.S. sanctions tied to a complex and controversial case of alleged corruption in Russia.
Members of Congress wrote to Mrs. Clinton in 2010 seeking to deny visas to people who had been implicated by Russian accountant Sergei Magnitsky, who was jailed and died in prison after he uncovered evidence of a large tax-refund fraud. William Browder, a foreign investor in Russia who had hired Mr. Magnitsky, alleged that the accountant had turned up evidence that Renaissance officials, among others, participated in the fraud."
The State Department opposed the sanctions bill at the time, as did the Russian government. Russian Foreign Minister Sergei Lavrov pushed Hillary Clinton to oppose the legislation during a meeting in St. Petersburg in June 2012, citing that U.S.-Russia relations would suffer as a result."
More: http://observer.com/2017/07/natalia-veselnitskaya-hillary-clinton-magnitsky-act/
Bart in Virginia , July 13, 2017 at 3:15 pmVery interesting, Zim.
Cal , July 13, 2017 at 3:31 pm"[Veselnitskaya] traveled to Washington in the days after her Trump Tower meeting and attended a House Foreign Affairs Committee hearing, according to The Washington Post." The other day I saw photos of her sitting right behind Amb. McFaul in some past hearing. How did she get a seat on the front row?
Now I remember that Post editorial. I was one of only 20 commenters before they shut down comments. It was some heavy pearl clutching.
BobH , July 13, 2017 at 3:35 pmWOW..excellent reporting.
BobH , July 13, 2017 at 3:38 pmnice backgrounder for an ever evolving story censorship is censorship by any other name!
Kiza , July 15, 2017 at 1:11 amafterthought couldn't the film be shown on RT America?
Abe , July 13, 2017 at 3:41 pmWould that not enable Bowder's employees online to claim that this documentary is Russian state propaganda, which it obviously is not because it would have been made available for free everywhere already just like RT. I believe that Nekrasov does not like RT and RT probably still does not like Nekrasov. The point of RT has never been the truth then the alternative point of view, as they advertised: Audi alteram partem.
Joe Tedesky , July 13, 2017 at 4:13 pm"The approach taken by Brennan's task force in assessing Russia and its president seems eerily reminiscent of the analytical blinders that hampered the U.S. intelligence community when it came to assessing the objectives and intent of Saddam Hussein and his inner leadership regarding weapons of mass destruction. The Russia NIA notes, 'Many of the key judgments rely on a body of reporting from multiple sources that are consistent with our understanding of Russian behavior.' There is no better indication of a tendency toward 'group think' than that statement.
Moreover, when one reflects on the fact much of this 'body of reporting' was shoehorned after the fact into an analytical premise predicated on a single source of foreign-provided intelligence, that statement suddenly loses much of its impact.
"The acknowledged deficit on the part of the U.S. intelligence community of fact-driven insight into the specifics of Russian presidential decision-making, and the nature of Vladimir Putin as an individual in general, likewise seems problematic. The U.S. intelligence community was hard wired into pre-conceived notions about how and what Saddam Hussein would think and decide, and as such remained blind to the fact that he would order the totality of his weapons of mass destruction to be destroyed in the summer of 1991, or that he could be telling the truth when later declaring that Iraq was free of WMD.
'President Putin has repeatedly and vociferously denied any Russian meddling in the 2016 U.S. Presidential election. Those who cite the findings of the Russia NIA as indisputable proof to the contrary, however, dismiss this denial out of hand. And yet nowhere in the Russia NIA is there any evidence that those who prepared it conducted anything remotely resembling the kind of 'analysis of alternatives' mandated by the ODNI when it comes to analytic standards used to prepare intelligence community assessments and estimates. Nor is there any evidence that the CIA's vaunted 'Red Cell' was approached to provide counterintuitive assessments of premises such as 'What if President Putin is telling the truth?'
'Throughout its history, the NIC has dealt with sources of information that far exceeded any sensitivity that might attach to Brennan's foreign intelligence source. The NIC had two experts that it could have turned to oversee a project like the Russia NIA!the NIO for Cyber Issues, and the Mission Manager of the Russian and Eurasia Mission Center; logic dictates that both should have been called upon, given the subject matter overlap between cyber intrusion and Russian intent.
'The excuse that Brennan's source was simply too sensitive to be shared with these individuals, and the analysts assigned to them, is ludicrous!both the NIO for cyber issues and the CIA's mission manager for Russia and Eurasia are cleared to receive the most highly classified intelligence and, moreover, are specifically mandated to oversee projects such as an investigation into Russian meddling in the American electoral process.
'President Trump has come under repeated criticism for his perceived slighting of the U.S. intelligence community in repeatedly citing the Iraqi weapons of mass destruction intelligence failure when downplaying intelligence reports, including the Russia NIA, about Russian interference in the 2016 election. Adding insult to injury, the president's most recent comments were made on foreign soil (Poland), on the eve of his first meeting with President Putin, at the G-20 Conference in Hamburg, Germany, where the issue of Russian meddling was the first topic on the agenda.
"The politics of the wisdom of the timing and location of such observations aside, the specific content of the president's statements appear factually sound."
Throwing a Curveball at 'Intelligence Community Consensus' on Russia By Scott Ritter http://www.theamericanconservative.com/articles/did-17-intelligence-agencies-really-come-to-consensus-on-russia/
Virginia , July 13, 2017 at 6:16 pmThanks Abe once again, for providing us with news which will never be printed or aired in our MSM. Brennan may ignore the NIC, as Congress and the Executive Branch constantly avoid paying attention to the GAO. Why even have these agencies, if our leaders aren't going to listen them?
Skip Scott , July 14, 2017 at 9:08 amAbe, I'm always amazed at how much you know. Thank you for sharing. If you have your comments in article form or on a site where they can be shared, I'd really like to know about it. I've tried, but I garble the many points you make when trying to explain historical events you've told us about.
John V. Walsh , July 13, 2017 at 3:54 pmThanks Abe. You are a real asset to us here at CN.
Roger Annis , July 13, 2017 at 4:02 pmVery good article! The entire Magnitsky saga has become so convoluted and mired in controversy and propaganda that it is very hard to understand. I remember vaguely the controversy surrounding the showing of the film at the Newseum. it is especially impressive that Nekrasov changed his opinion as fcts unfolded.
I will now try to get the docudrama and watch it.
If anyone has suggestions on how to do this, please let me know via a response. here.
Thanks.John-Albert Eadie , July 13, 2017 at 5:01 pmA 'Magnitsky Act' in Canada was approved by the (appointed) Senate several months ago and is now undergoing fine tuning in the House of Commons prior to a third and final vote of approval. The proposed law has the unanimous support of the parties in Parliament.
A column in today's Globe and Mail daily by the newspaper's 'chief political writer' tiptoes around the Magnitsky story, never once daring to admit that a contrary narrative exists to that of Bill Browder.
backwardsevolution , July 13, 2017 at 5:56 pmMagnitsky Act in Canada has been based on made-up `facts` as Globe & Mail reporting proves. Not news, but deepens my concern about Canada following the Cold War without examination.
Britton , July 13, 2017 at 4:05 pmRoger Annis – just little lemmings following the leader. Disgusting. I hope you posted a comment at the Globe and Mail, Roger, with a link to this article.
Joe Average , July 13, 2017 at 5:06 pmBrowder is a Communist Jew, his father has a Communist past according to his background so I know I can't trust anything he says. Hes just one of many shady interests undermining Putin I've seen over the years. His book Red Notice is just as shady. Good reporting Consortium News. Fox News promotes Browder like crazy every chance they get especially Fox Business channel.
ToivoS , July 13, 2017 at 6:02 pm"Browder is a Communist " Hedge Fund managers are hardly Communist – that's an oxymoron.
Joe Average , July 13, 2017 at 6:34 pmBill Browder's grandfather was Earl Browder, leader of the CPUSA from the the late 30s to late 40s. His father was also a communist. Bill jr parlayed those connections with the Soviet apparatchiks to gain a foothold in looting Russia of its state assets during the 1990s. No he was not a communist but neither were the leaders of the Soviet Union at the time of its dissolution (in name yes, but in fact not).
backwardsevolution , July 13, 2017 at 6:21 pmToivoS,
thank you for this background information.
My main intention had been to straighten out the blurring of calling a hedge fund manager communist. Nowadays everything gets blurred by people misrepresenting political concepts. Either the people have been dumbed-down by misinformation or misrepresenting is done in order to keep neo-liberalism the dominant economical model. On many occasions I had read comments of people seemingly believing that Nationalsocialism had been some variant of socialism. Even the ideas of Bernie Sanders had been misrepresented as socialist instead of social democratic ones.
Dave P. , July 13, 2017 at 7:37 pmJoe Average – Dave P. mentioned Aleksandr Solzhenitsyn's book entitled "Two Hundred Years Together" the other day. I've been reading a long synopsis of this book. What Britton says appears to be quite true. I don't know about Browder, but from what I've read the Jews were instrumental in the communist party, in the deaths of so many Russians. It wasn't just the Jews, but they played a big part. It's no wonder Solzhenitsyn's book has been "lost in translation", at least into English, for so many years.
I've also heard that it was the Jewish commissars who, when the USSR fell apart, rushed off to grab everything they could (with the help of outside Jewish money) and became the Russian oligarchs we hear about today. This is probably what Britton is getting at: "His father has a communist past." You go from running the government to owning it. Anti-Putin because Putin put a stop to them.
Bruce Walker , July 13, 2017 at 9:29 pmbackwardsevolution: I worked with a Soviet emigre engineer – Jewish – on the same project in an Engineering design and construction company during early 1990's. He immigrated with his family around 1991. In Soviet Union, there being no private financial institutions or lawyers so to speak , many Jews went into science and engineering. A very interesting person, we were close work place friends. His elder brother had stayed behind back in Russia. His brother was in Moscow and involved in this plunder going on there. He used to tell me all these hair raising first hand stories about what was going on in Russia during that time. All the plunder flowed into the Western Countries.
In recent history, no country went through this kind of plunder on a scale Russia went through during ten or fifteen years starting in 1992. Russia was a very badly ravaged country when Putin took over. Means of production, finance, all came to halt, and society itself had completely broken down. It appears that the West has all the intentions to do it again.
backwardsevolution , July 14, 2017 at 12:38 amI have read all the comments up to yours you have told it like it was in Russia in those years. Browder was the king of the crooks looting Russia. Then he got to John McCain with all his lies and bullshit and was responsible for the sanctions on Russia. All the comments aboutBrowders grandfather andCommunist party are all true but hardly important. Except that it probably was how Browder was able to get his fingers on the pie in Russia. And he sure did get his fingers in the pie BIG TIME.
I am a Canadian and am aware of Maginsky Act in Canada. Our Minister Chrystal Freeland met with William Brawder in Davos a few months ago both of these two you could say are not fans of Putin, I certainly don't know what they spoke about but other than lies from Browder there is no reason she should have been talking with him. I have made comments on other forums regarding these two meeting. Read Browders book and hopefully see the documentary that this article is about. When I read his book I knew instantly that he was a crook a charloten and a liar. Just the kind of folk John McCain and a lot of other folks in US politics love. You all have a nice Peacefull day
backwardsevolution , July 14, 2017 at 12:58 amJoe Average – "I guess that this book puts blame for Communism entirely on the Jewish people and that this gave even further rise to antisemitism in the Germany of the 1930's."
No, it doesn't put the blame entirely on the Jews; it just spells out that they did play a large part. As one Jewish scholar said, Aleksandr Solzhenitsyn was too much of an academic, too intelligent to ever put the blame entirely on one group. But something like 40 – 60 million died – shot, taken out on boats with rocks around their necks and thrown overboard, starved, gassed in rail cars, poisoned, worked to death, froze, you name it. Every other human slaughter pales in comparison. Good old man, so civilized (sarc)!
But someone(s) has been instrumental in keeping this book from being translated into English (or so I've read many places online). Solzhenitsyn's "Gulag Archipelago" and his other books have been translated, but not this one. (Although I just found one site that has almost all of the chapters translated, but not all). Several people ordered the book off Amazon, only to find out that it was in the Russian language. LOL
Solzhenitsyn does say at one point in the book: "Communist rebellions in Germany post-WWI was a big reason for the revival of anti-Semitism (as there was no serious anti-Semitism in the imperial [Kaiser] Germany of 1870 – 1918)."
Lots of Jewish people made it into the upper levels of the Soviet government, academia, etc. (and lots of them were murdered too). I might skip reading these types of books until I get older. Too bleak. Hard enough reading about the day-to-day stuff here without going back in time for more fun!
I remember reading Naomi Klein's "Shock Doctrine," but I just could not get through the chapter on the USSR falling apart. I started reading it, but I didn't want to finish it (and I didn't) because it just made me angry. The West was too unfair! Russia was asking for help, but instead the West just looted. I'd say that Russia was very lucky to have someone like Putin clean it up.
Keep smiling, Joe.
Chucky LeRoi , July 14, 2017 at 9:56 amDave P. – I told you, you are a wealth of information, a walking encyclopedia. Interesting about your co-worker. Sounds like it was a free-for-all in Russia. Yes, I totally agree that Putin has done and is doing all he can to bring his country back up. Very difficult job he is doing, and I hope he is successful at keeping the West out as much as he can, at least until Russia is strong and sure enough to invite them in on their own terms.
Now go and tell your wife what I said about you being a "walking encyclopedia". She'll probably have a good laugh. (Not that you're not, but you know what she'll say: "Okay, smartie, now go and do the dishes.")
Joe Average , July 13, 2017 at 8:10 pmJust some small scale, local color kind of stuff, but living in the USA, west coast specifically, it was quite noticeable in the mid to late '90's how many Russians with money were suddenly appearing. No apparent skills or 'jobs', but seemingly able to pay for stuff. Expensive stuff.
A neighbor invited us to her 'place in the mountains', which turned out to be where a lumber company had almost terra-formed an area and was selling off the results. Her advice: When you go to the lake (i.e., the low area now gathering runoff, paddle boats rentals, concession stand) you will see a lot of men with huge stomachs and tiny Speedos. They will be very rude, pushy, confrontational. Ignore them, DO NOT comment on their rudeness or try to deal with their manners. They are Russians, and the amount of trouble it will stir up – and probable repercussions – are simply not worth it.
Back in town, the anecdotes start piling up quickly. I am talking crowbars through windows (for a perceived insult). A beating where the victim – who was probably trying something shady – was so pulped the emergency room staff couldn't tell if the implement used was a 2X4 or a baseball bat. When found he had with $3k in his pocket: robbery was not the motive. More traffic accidents involving guys with very nice cars and serious attitude problems. I could go on. More and more often somewhere in the relating of these incidents the phrase " this Russian guy " would come up. It was the increased use of this phrase that was so noticeable.
And now the disclaimer.
Before anybody goes off, I am not anti-Russian, Russo-phobic, what have you. I studied the Russian language in high school and college (admittedly decades ago). My tax guy is Russian. I love him. My day to day interactions have led me to this pop psychology observation: the extreme conditions that produced that people and culture produced extremes. When they are of the good, loving , caring, cultured, helpful sort, you could ask for no better friends. The generosity can be embarrassing. When they are of the materialistic, evil, self-centered don't f**k with me I am THE BADDEST ASS ON THE PLANET sort, the level of mania and self-importance is impossible to deal with, just get as far away as possible. It's worked for me.
backwardsevolution , July 14, 2017 at 12:50 ambackwardsevolution,
thanks for the info. I'll add the book to the list of books onto my to-read list. As far as I know a Kibbutz could be described as a Communist microcosm. The whole idea of Communism itself is based on Marx (a Jew by birth). A while ago I had started reading "Mein Kampf". I've got to finish the book, in order to see if my assumption is correct. I guess that this book puts blame for Communism entirely on the Jewish people and that this gave even further rise to antisemitism in the Germany of the 1930's.
The most known Russian Oligarchs that I've heard of are mainly of Jewish origin, but as far as I know they had been too young to be commissars at the time of the demise of the USSR. At least one aspect I've read of many times is that a lot of them built their fortunes with the help of quite shady business dealings.
With regard to President Putin I've read that he made a deal with the oligarchs: they should pay their taxes, keep/invest their money in Russia and keep out of politics. In return he wouldn't dig too deep into their past. Right at the moment everybody in the West is against President Putin, because he stopped the looting of his country and its citizens and that's something our Western oligarchs and financial institutions don't like.
On a side note: Several years ago I had started to read several volumes about German history. Back then I didn't notice an important aspect that should attract my attention a few years later when reading about the rise of John D. Rockefeller. Charlemagne (Charles the Great) took over power from the Merovingians. Prior to becoming King of the Franks he had been Hausmeier (Mayor of the Palace) for the Merovingians. Mayor of the Palace was the title of the manager of the household, which seems to be similar to a procurator and/or accountant (bookkeeper). The similarity of the beginnings of both careers struck me. John D. Rockefeller started as a bookkeeper. If you look at Bill Gates you'll realize that he was smart enough to buy an operating system for a few dollars, improved it and sold it to IBM on a large scale. The widely celebrated Steve Jobs was basically the marketing guy, whilst the real brain behind (the product) Apple had been Steve Wozniak.
Another side note: If we're going down the path of neo-liberalism it will lead us straight back to feudalism – at least if the economy doesn't blow up (PCR, Michael Hudson, Mike Whitney, Mike Maloney, Jim Rogers, Richard D. Wolff, and many more economists make excellent points that our present Western economy can't go on forever and is kept alive artificially).
Miranda Keefe , July 14, 2017 at 5:48 amJoe Average – somehow my reply to you ended up above your post. What? How did that happen? You can find it there. Thanks for the interesting info about John D. Rockefeller, Gates, Jobs and Wozniak. Some are good managers, others good at sales, while others are the creative inventors.
Yes, Joe, I totally agree that we are headed back to feudalism. I don't think we'll have much choice as the oil is running out. We'll probably be okay, but our children? I worry about them. They'll notice a big change in their lifetimes. The discovery and capture of oil pulled forward a large population. As we scale back, we could be in trouble, food-wise. Or at least it looks that way.
Thanks, Joe.
Anna , July 14, 2017 at 9:45 amCharlemagne did not take over from the Merovingians. The Mayor of the Palace was not an accountant.
During the 7th Century the Mayor of the Place more and more became the actual ruler of the Franks. The office had existed for over a century and was basically the "prime minister" to the king. By the time Pepin of Herstal, a scion of a powerful Frankish family, took the position in 680, the king was ceremonial leader doing ritual and the Mayor ruled- like the relationship of the Emperor and the Shogun in Japan. In 687 Pepin's Austrasia conquered Neustria and Burgundy and he added "Duke of the Franks" to his titles. The office became hereditary.
When Pepin died in 714 there was some unrest as nobles from various parts of the joint kingdoms attempted to get different ones of his heirs in the office until his son Charles Martel took the reins in 718. This is the famous Charles Martel who defeated the Moors at Tours in 732. But that was not his only accomplishment as he basically extended the Frankish kingdom to include Saxony. Charles not only ruled but when the king died he picked which possible heir would become king. Finally near the end of his reign he didn't even bother replacing the king and the throne was empty.
When Charles Martel died in 741 he followed Frankish custom and divided his kingdom among his sons. By 747 his younger son, Pepin the Short, had consolidated his rule and with the support of the Pope, deposed the last Merovingian King and became the first Carolingian King in 751- the dynasty taking its name from Charles Martel. Thus Pepin reunited the two aspects of the Frankish ruler, combining the rule of the Mayor with the ceremonial reign of the King into the new Kingship.
Pepin expanded the kingdom beyond the Frankish lands even more and his son, Charlemagne, continued that. Charlemagne was 8 when his father took the title of King. Charlemagne never was the Mayor of the Palace, but grew up as the prince. He became King of the Franks in 768 ruling with his brother, sole King in 781, and then started becoming King of other countries until he united it all in 800 as the restored Western Roman Emperor.
When he died in 814 the Empire was divided into three Kingdoms and they never reunited again. The western one evolved into France. The eastern one evolved in the Holy Roman Empire and eventually Germany. The middle one never solidified but became the Low Countries, Switzerland, and the Italian states.
Joe Average , July 14, 2017 at 11:32 pmThe Canadian Minister Chrysta Freeland met with William Brawder in Davos a few months ago " -- Birds of a feather flock together. Mrs. Chrystal Freeland has a very interesting background for which she is very proud of: her granddad was a Ukrainian Nazi collaborator denounced by Jewish investigators: https://consortiumnews.com/2017/02/27/a-nazi-skeleton-in-the-family-closet/
Since the inti-Russian tenor of the Canadian Minister Chrysta Freeland is in accord with the US ziocons anti-Russian policies (never mind all this fuss about WWII Jewish mass graves in Ukraine), "Chrysta" is totally approved by the US government.
Cal , July 13, 2017 at 10:13 pmI'll reply to myself in order to send a response to backwardsevolution and Miranda Keefe.
For a change I'll be so bold to ignore gentleman style and reply in the order of the posts – instead of Ladies first.
backwardsevolution,
in my first paragraph I failed to make a clear distinction. I started with the remark that I'm adding the book "Two Hundred Years Together" to my to-read list and then mentioned that I'm right now reading "Mein Kampf". All remarks after mentioning the latter book are directed at this one – and not the one of Solzhenitsyn.
Miranda Keefe,
I'm aware that accountant isn't an exact characterization of the concept of a Mayor of the Palace. As a precaution I had added the phrase "seems to be similar". You're correct with the statement that Charlemagne was descendant Karl Martel. At first I intended to write that Karolinger (Carolings) took over from Merowinger (Merovingians), because those details are irrelevant to the point that I wanted to make. It would've been an information overload. My main point was the power of accountants and related fields such as sales and marketing. Neither John D. Rockefeller, Bill Gates nor Steve Jobs actually created their products from scratch.
Many of those who are listed as billionaires haven't been creators / inventors themselves. Completely decoupled from actual production is banking. Warren Buffet is started as an investment salesman, later stock broker and investor. Oversimplified you could describe this activity as accounting or sales. It's the same with George Soros and Carl Icahn. Without proper supervision money managers (or accountants) had and still do screw those who had hired them. One of those victims is former billionaire heiress Madeleine Schickedanz ( https://en.wikipedia.org/wiki/Madeleine_Schickedanz ). Generalized you could also say that BlackRock is your money manager accountant. If you've got some investment (that dates back before 2008), which promises you a higher interest rate after a term of lets say 20 years, the company with which you have the contract with may have invested your money with BlackRock. The financial crisis of 2008 has shown that finance (accountants / money managers) are taking over. Aren't investment bankers the ones who get paid large bonuses in case of success and don't face hardly any consequences in case of failure? Well, whatever turn future might take, one thing is for sure: whenever SHTF even the most colorful printed pieces of paper will not taste very well.
backwardsevolution , July 14, 2017 at 1:54 amHistory's Greatest Heist: The Looting of Russia by the Bolsheviks on
http://www.jstor.org/stable/j.ctt1nppst
History's Greatest Heist: The Looting of Russia by the Bolsheviks . EVER SINCE THE Emperor Constantine established the legal position of the church in the
Many Bolsheviks fled to Germany , taking with them some loot that enabled them to get established in Germany. Lots of invaluable art work also.
Cal , July 14, 2017 at 2:22 pmCal – read about "History's Greatest Heist" on Amazon. Sounds interesting. Was one of the main reasons for the Czar's overthrow to steal and then flee? It's got to have been on some minds. A lot of people got killed, and they would have had wedding rings, gold, etc. That doesn't even include the wealth that could be stolen from the Czar. Was the theft just one of those things that happened through opportunism, or was it one of the main reasons for the overthrow in the first place, get some dough and run with it?
backwardsevolution , July 14, 2017 at 4:09 pm@ backwards
" Was the theft just one of those things that happened through opportunism, or was it one of the main reasons for the overthrow"'
imo some of both. I am sure when they were selling off Russian valuables to finance their revolution a lot of them set aside some loot for themselves.
Brad Owen , July 14, 2017 at 11:45 amCal – thank you. Good books like this get us closer and closer to the truth. Thank goodness for these people.
Brad Owen , July 14, 2017 at 12:13 pmAn autocratic oligarch would probably be a better description. He probably believes like other Synarchist financiers that they should rightfully rule the World, and see democratic processes as heresy against "The Natural Order for human society", or some such belief.
mike k , July 13, 2017 at 4:11 pmLooking up "A short definition of Synarchism (a Post-Napoleonic social phenomenon) by Lyndon LaRouche" would give much insight into what's going on. People from the intelligence community made sure a copy of a 1940 army intelligence dossier labelled something like "Synarchism:NAZI/Communist" got into Lyndon's hands. It speaks of the the Synarchist method of attacking a targeted society from both extreme (Right-Left) ends of the political spectrum. I guess this is dialectics? I suppose the existence of the one extreme legitimizes the harsh, anti-democratic/anti-human measures taken to exterminate it by the other extreme, actually destroying the targeted society in the process. America, USSR, and (Sun Yat Sen's old Republic of) China were the targeted societies in the pre-WWII/WWII yearsfor their "sins" of championing We The People against Oligarchy. FDR knew the Synarchist threat and sided with Russia and China against Germany and Japan. He knew that, after dealing with the battlefield NAZIs, the "Boardroom" NAZIs would have to be dealt with Post-War. That all changed with his death.The Synarchists are still at it today, hence all the rabid Russo-phobia, the Pacific Pivot, and the drive towards war. This is all being foiled with Trump's friendly, cooperative approach towards Russia and China.
Joe Tedesky , July 13, 2017 at 4:21 pmBig Brother at work – always protecting us from upsetting information. How nice of him to insure our comfort. No need for us to bother with all of this confusing stuff, he can do all that for us. The mainstream media will tell us all we need to know .. (Virginia – please notice my use of irony.)
Joe Average , July 13, 2017 at 5:09 pmDo you remember mike K when porn was censored, and there were two sides to every issue as compromise was always on the table? Now porn is accessible on cable TV, and there is only one side to every issue, and that's I'm right about everything and your not, what compromise with you?
Don't get me wrong, I don't really care how we deal with porn, but I am very concerned to why censorship is showing up whereas we can't see certain things, for certain reasons we know nothing about. Also, I find it unnerving that we as a society continue to stay so undivided. Sure, we can't all see the same things the same way, but maybe it's me, and I'm getting older by the minute, but where is our cooperation to at least try and work with each other?
Always like reading your comments mike K Joe
Joe Tedesky , July 13, 2017 at 5:27 pmJoe,
when it comes to the choice of watching porn and bodies torn apart (real war pictures), I prefer the first one, although we in the West should be confronted with the horrible pictures of what we're assisting/doing.
mike k , July 13, 2017 at 6:07 pmThis is where the Two Joe's are alike.
Cal , July 13, 2017 at 10:15 pmI do remember those days Joe. I am 86 now, so a lot has changed since 1931. With the 'greed is good' philosophy in vogue now, those who seek compromise are seen as suckers for the more single minded to take advantage of. Respect for rules of decency is just about gone, especially at the top of the wealth pyramid.
BannanaBoat , July 13, 2017 at 6:36 pmYep
ranney , July 13, 2017 at 4:37 pmDistraction from critical thinking, excellent observation ( please forget the NeoCon Demos they are responsible for half of the nightmare USA society has become.
John , July 13, 2017 at 4:40 pmWow Robert, what a fascinating article! And how complicated things become "when first we practice to deceive".
Abe thank you for the link to Ritter's article; that's a really good one too!Abe , July 13, 2017 at 7:01 pmIf we get into a shooting war with Russia and the human race somehow survives it Robert Parry' s name will one day appear in the history books as the person who most thoroughly documented the events leading up to that war. He will be considered to be a top historian as well as a top journalist.
Abe , July 13, 2017 at 7:16 pm"Browder, who abjured his American citizenship in 1998 to become a British subject, reveals more about his own selective advocacy of democratic principles than about the film itself. He might recall that in his former homeland freedom of the press remains a cherished value."
A Response to William Browder
By Rachel Bauman
http://nationalinterest.org/feature/response-william-browder-16654Abe , July 13, 2017 at 7:19 pmWilliam Browder is a "shareholder activist" the way Mikhail Khodorkovsky is a "human rights activist".
Both loudly bleat the "story" of their heroic "fight for justice" for billionaire Jewish oligarchs: themselves.
backwardsevolution , July 14, 2017 at 2:50 am"never driven by the money"
https://www.thejc.com/culture/books/be-careful-of-putin-he-is-a-true-enemy-of-jews-1.61745Kiza , July 15, 2017 at 1:56 amAbe – "never driven by the money". No, he would never be that type of guy (sarc)!
"It's hard to know what Browder will do next. He rules out any government ambitions, instead saying he can achieve more by lobbying it.
This summer, he says he met "big Hollywood players" in a bid to turn his book into a major film.
"The most important next step in the campaign is to adapt the book into a Hollywood feature film," he says. "I have been approached by many film-makers and spent part of the summer in LA meeting with screenwriters, producers and directors to figure out what the best constellation of players will be on this.
"There are a lot of people looking at it. It's still difficult to say who we will end up choosing. There are many interesting options, but I'm not going to name any names."
What the ..? I can see it now, George Clooney in the lead role, Mr. White Helmets himself, with his twins in tow.
Abe , July 13, 2017 at 7:39 pmIs it not impressive how money buys out reality in the modern world? This is why one can safely assume that whatever is told in the MSM is completely opposite to the truth. Would MSM have to push it if it were the truth? You may call this Kiza's Law if you like (modestly): " The truth is always opposite to what MSM say! " The 0.1% of situations where this is not the case is the margin of error.
backwardsevolution , July 14, 2017 at 3:15 am"no figure in this saga has a more tangled family relationship with the Kremlin than the London-based hedge fund manager Bill Browder [ ]
"there's a reticence in his Jewish narrative. One of his first jobs in London is with the investment operation of the publishing billionaire Robert Maxwell. As it happens, Maxwell was originally a Czech Jewish Holocaust survivor who fled and became a decorated British soldier, then helped in 1948 to set up the secret arms supply line to newly independent Israel from communist Czechoslovakia. He was also rumored to be a longtime Mossad agent. But you learn none of that from Browder's memoir.
"The silence is particularly striking because when Browder launches his own fund, he hires a former Israeli Mossad agent, Ariel, to set up his security operation, manned mainly by Israelis. Over time, Browder and Ariel become close. How did that connection come about? Was it through Maxwell? Wherever it started, the origin would add to the story. Why not tell it?
"When Browder sets up his own fund, Hermitage Capital Management -- named for the famed czarist-era St. Petersburg art museum, though that's not explained either -- his first investor is Beny Steinmetz, the Israeli diamond billionaire. Browder tells how Steinmetz introduced him to the Lebanese-Brazilian Jewish banking billionaire Edmond Safra, who invests and becomes not just a partner but also a mentor and friend.
"Safra is also internationally renowned as the dean of Sephardi Jewish philanthropy; the main backer of Israel's Shas party, the Sephardi Torah Guardians, and of New York's Holocaust memorial museum, and a megadonor to Yeshiva University, Hebrew University, the Weizmann Institute and much more. Browder must have known all that. Considering the closeness of the two, it's surprising that none of it gets mentioned.
"It's possible that Browder's reticence about his Jewish connections is simply another instance of the inarticulateness that seizes so many American Jews when they try to address their Jewishness."
http://forward.com/news/376788/the-secret-jewish-history-of-donald-trump-jrs-russia-scandal/
Abe , July 14, 2017 at 11:37 pmAbe – what a web. Money makes money, doesn't it? It's often what club you belong to and who you know. I remember a millionaire in my area long ago who went bankrupt. The wealthy simply chipped in, gave him some start-up money, and he was off to the races again. Simple as that. And I would think that the Jews are an even tighter group who invest with each other, are privy to inside information, get laws changed in favor of each other, pay people off when one gets in trouble. Browder seems a shifty sort. As the article says, he leaves a lot out.
Kiza , July 15, 2017 at 2:26 amIn 1988, Stanton Wheeler (Yale University – Law School), David L. Weisburd (Hebrew University of Jerusalem; George Mason University – The Department of Criminology, Law & Society; Hebrew University of Jerusalem – Faculty of Law). Elin Waring (Yale University – Law School), and Nancy Bode (Government of the State of Minnesota) published a major study on white collar crime in America.
Part of a larger program of research on white-collar crime supported by a grant from the United States Department of Justice's National Institute of Justice, the study included "the more special forms associated with the abuse of political power [ ] or abuse of financial power". The study was also published as a Hebrew University of Jerusalem Legal Research Paper
The research team noted that Jews were over-represented relative to their share of the U.S. population:
"With respect to religion, there is one clear finding. Although many in both white collar and common crime categories do not claim a particular religious faith [ ] It would be a fair summary of our. data to say that, demographically speaking, white collar offenders are predominantly middle-aged white males with an over-representation of Jews."
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2632989
In 1991, David L. Weisburd published his study of Crimes of the Middle Classes: White-Collar Offenders in the Federal Courts, Weisburd found that although Jews comprised only around 2% of the United States population, they contributed at least 9% of lower category white-collar crimes (bank embezzlement, tax fraud and bank fraud), at least 15% of moderate category white-collar crimes (mail fraud, false claims, and bribery), and at least 33% of high category white-collar crimes (antitrust and securities fraud). Weisburg showed greater frequency of Jewish offenders at the top of the hierarchy of white collar crime. In Weisbug's sample of financial crime in America, Jews were responsible for 23.9%.
Cal , July 16, 2017 at 5:41 amWhat I find most interesting is how Putin handles the Jews.
It is obvious that he is the one who saved the country of Russia from the looting of the 90s by the Russian-American Jewish mafia. This is the most direct explanation for his demonisation in the West, his feat will never be forgiven, not even in history books (a demon forever). Even to this day, for example in Syria, Putin's main confrontation is not against US then against the Zionist Jews, whose principal tool is US. Yet, there is not a single anti-Semitic sentence that Putin ever uttered. Also, Putin let the Jewish oligarchs who plundered Russia keep their money if they accepted the authority of the Russian state, kept employing Russians and paying Russian taxes. But he openly confronted those who refused (Berezovsky, Khodorovsky etc). Furthermore, Putin lets Israel bomb Syria under his protection to abandon. Finally, Putin is known in Russia as a great supporter of Jews and Israel, almost a good friend of Nutty Yahoo.
Therefore, it appears to me that the Putin's principal strategy is to appeal to the honest Jewish majority to restrain the criminal Jewish minority (including the criminally insane), to divide them instead of confronting them all as a group, which is what the anti-Semitic Europeans have traditionally been doing. His judo-technique is in using Jewish power to restrain the Jews. I still do not know if his strategy will succeed in the long run, but it certainly is an interesting new approach (unless I do not know history enough) to an ancient problem. It is almost funny how so many US people think that the problem with the nefarious Jewish money power started with US, if they are even aware of it.
Abe , July 15, 2017 at 5:11 pm" His judo-technique is in using Jewish power to restrain the Jews. "
The Jews have no power without their uber Jew money men, most of whom are ardent Zionist.
And because they get some benefits from the lobbying heft of the Zionist control of congress they arent going to go against them.HIDE BEHIND , July 13, 2017 at 7:43 pmBill Browder with American-Israeli interviewer Natasha Mozgovaya, TV host for Voice of America.
https://www.youtube.com/watch?v=YbgNeQ_xINMIn this 2015 tirade, Browder declared "Someone has to punch Putin in the nose" and urged "supplying arms to the Ukrainians and putting troops, NATO troops, in all of the surrounding countries".
The choice of Mozgovaya as interviewer was significant to promote Browder with the Russian Jewish community abroad.
Born in the Soviet Union in 1979, Mozgovaya immigrated to Israel with her family in 1990. She became a correspondent for the Israeli newspaper Yediot Ahronoth in 2000. Although working most of the time in Hebrew, her reports in Russian appeared in various publications in Russia.
Mozgovaya covered the Orange Revolution in Ukraine, including interviews with President Victor Yushenko and his partner-rival Yulia Timoshenko, as well as the Russian Mafia and Russian oligarchs. During the presidency of Vladimir Putin, Mozgovaya gave one of the last interviews with the Russian journalist Anna Politkovskaya. She interviewed Garry Kasparov, Edward Limonov, Boris Berezovsky, Chechen exiles such as Ahmed Zakaev, and the widow of ex-KGB agent Alexander Litvinenko.
In 2008, Mozgovaya left Yedioth Ahronoth to become the Washington Bureau Chief for Haaretz newspaper in Washington, D.C.. She was a frequent lecturer on Israel and Middle Eastern affairs at U.S. think-tanks. In 2013, Mozgovaya started working at the Voice of America.
backwardsevolution , July 14, 2017 at 2:07 amGramps was decended from an old Irish New England Yankee lineage and in my youth he always dragged me along when the town meetings were held, so my ideas of American DEmocracy stem from that background, one of open participation.
The local newspapers had more social chit chat than political news of international or for that mstter State or Federal shenanigansbut everu member in that far flung settled communit read them from front to back; ss a child I got to read the funny and sports pages until Gramps got finidhed reading the "News Section, always the news first yhen the lesser BS when time allowed,this habit instilled in me the sence of
priority.
Aftrr I had read his dection of paper he would talk with me,even being a yonker, in a serious but opinionated manner, of the Editorial section which had local commentary letterd to the editor as large as somtimes too pages.
I wonder today at which section of papersf at all, is read by american public, and at how manyadults discuss importsn news worthy tppics with their children.
At advent of TV we still had trustworthy journalist to finally be seen after years of but reading their columns or listening on radios,almost tottaly all males but men of honesty and character, and worthy of trust.
They wrre a part of all social stratas, had lived real lives and yes most eere well educated but not the elitist thinking jrrks who are no more than parrots repeating whatevrr a teleprompter or bias of their employers say to write.
Wrll back to Gramps and hid home spun wisdom: He alwsys ,and shoeed by example at those old and somrtimes boistrous town Halls, that first you askef a question, thought about the answer, and then questioned the answer.
This made the one being question responsible for the words he spoke.
So those who have doubts by a presumed independent journalist, damn right they should question his motives, which in reality begin to answer our unspoken questions we can no longer ask those boobs for bombs and political sychophants and their paymasters of popular media outlets.
As one who likes effeciency in prodution one monitors data to spot trends and sny aberations bring questions so yes I note this journalist deviation from the norms as well.
I can only question the why, by looking at data from surrounding trends in order to later be able to question his answers.Joe Tedesky , July 13, 2017 at 10:53 pmHide Behind – sounds like you had a smart grandpa, and someone who cared enough about you to talk things over with you (even though he was opinionated). I try to talk things over with my kids, sometimes too much. They're known on occasion to say, "Okay, enough. We're full." I wait a few days, and then fill them up some more! Ha.
F. G. Sanford , July 14, 2017 at 12:42 amHere's a thought; will letting go of Trump Jr's infraction cancel out a guilty verdict of Hillary Clinton's transgressions?
I keep hearing Hillary references while people defend Donald Trump Jr over his meeting with Russian Natalia Veselnitskaya. My thinking started over how I keep hearing pundits speak to Trump Jr's 'intent'. Didn't Comey find Hillary impossible to prosecute due to her lack of 'intent'? Actually I always thought that to be prosecuted under espionage charges, the law didn't need to prove intent, but then again we are talking about Hillary here.
The more I keep hearing Trump defenders make mention of Hillary's deliberate mistakes, and the more I keep hearing Democrates point to Donald Jr's opportunistic failures, the more similarity I see between the two rivals, and the more I see an agreed upon truce ending up in a tie. Remember we live in a one party system with two wings.
Am I going down the wrong road here, or could forgiving Trump Jr allow Hillary to get a free get out of jail card?
Joe Tedesky , July 14, 2017 at 1:29 amI've been saying all along, our government is just a big can of worms, and neither side can expose the other without opening it. But insiders on both sides are flashing their can openers like it's a game of chicken. My guess is, everybody is gonna get a free pass. I read somewhere that Preet Bharara had the goods on a whole bunch of bankers, but he sat on it clear up to the election. Then, he got fired. So much for draining the swamp. If they prosecute Hillary, it looks like a grudge match. If they prosecute Junior, it looks like revenge. If they prosecute Lynch, it looks like racism. When you deal with a government this corrupt, everybody looks innocent by comparison. I'm still betting nobody goes to jail, as long as the "deep state" thinks they have Trump under control.
Lisa , July 14, 2017 at 4:22 amIt's like we are sitting on the top of a hill looking down at a bunch of little armies attacking each other, or something.
I'm really screwy, I have contemplated to if Petraues dropped a dime on himself for having a extra martial affair, just to get out of the Benghazi mess. Just thought I'd tell you that for full disclosure.
When it comes to Hillary, does anyone remember how in the beginning of her email investigation she pointed to Colin Powell setting precedent to use a private computer? That little snitch Hillary is always the one when caught to start pointing the finger .she would never have lasted in the Mafia, but she's smart enough to know what works best in Washington DC.
I'm just starting to see the magic; get the goods on Trump Jr then make a deal with the new FBI director.
Okay go ahead and laugh, but before you do pass the popcorn, and let's see how this all plays out.
Believe half of what you hear, and nothing of what you see.
Joe
Joe Tedesky , July 14, 2017 at 10:59 am"Believe half of what you hear, and nothing of what you see."
Joe, where does this quote originate? Or is it a paraphrase?
I once had an American lecturer (political science) at the university, and he stressed the idea that we should not believe anything we read or hear and only half of what we see. This was l-o-o-ng ago, in the 60's.Gregory Herr , July 14, 2017 at 9:12 pmThe first time I ever heard that line, 'believe nothing of what you see', was a friend of mine said it after we watched Roberto Clemente throw a third base runner out going towards home plate, as Robert threw the ball without a bounce to the catcher who was standing up, from the deep right field corner of the field .oh those were the days.
Joe Tedesky , July 14, 2017 at 9:56 pmJT,
Clemente had an unbelievable arm! The consummate baseball player I have family in western PA, an uncle your age in fact who remembers Clemente well. Roberto also happened to be a great human being.Gregory Herr , July 14, 2017 at 10:12 pmI got loss at Forbes Field. I was seven years old, it was 1957. I got separated from my older cousin, we got in for 50 cents to sit in the left field bleachers. Like I said I loss my older cousin so I walked, and walked, and just about the time I wanted my mum the most I saw daylight. I followed the daylight out of the big garage door, and I was standing within a foot of this long white foul line. All of a sudden this Black guy started yelling at me in somekind of broken English to, 'get off the field, get out of here'. Then I felt a field ushers hand grab my shoulder, and as I turned I saw my cousin standing on the fan side of the right field side of the field. The usher picked me up and threw me over to my cousin, with a warning for him to keep his eye on me. That Black baseball player was a young rookie who was recently just drafted from the then Brooklyn Dodgers .#21 Roberto Clemente.
Zachary Smith , July 15, 2017 at 9:00 pmYou were a charmed boy and now you are a charmed man. Great story life is a Field of Dreams sometimes.
backwardsevolution , July 14, 2017 at 2:01 amBelieve half of what you hear, and nothing of what you see.
My introduction to this had the wording the other way around:
"Don't believe anything you hear and only half of what you see."
This was because the workplace was saturated with rumors, and unfortunately there was a practice of management and union representatives "play-acting" for their audience. So what you "saw" was as likely as not a little theatrical production with no real meaning whatever. The two fellows shouting at each other might well be laughing about it over a cup of coffee an hour later.
Gregory Herr , July 14, 2017 at 10:20 pmSanford – "But insiders on both sides are flashing their can openers " That's funny writing.
Kiza , July 15, 2017 at 2:41 amyessir, love it
Kiza , July 15, 2017 at 6:19 pmAbsolutely, one of the best political metaphors ever (unfortunately works in English language only).
Abe , July 14, 2017 at 2:13 amBTW, they are flashing at each other not only can openers then also jail cells and grassy knolls these days. But the can openers would still be most scary.
backwardsevolution , July 14, 2017 at 3:00 amIsraeli banks have helped launder money for Russian oligarchs, while large-scale fraudulent industries, like binary options, have been allowed to flourish here.
A May 2009 diplomatic cable by the US ambassador to Israel warned that "many Russian oligarchs of Jewish origin and Jewish members of organized crime groups have received Israeli citizenship, or at least maintain residences in the country."
The United States estimated at the time that Russian crime groups had "laundered as much as $10 billion through Israeli holdings."
In 2009, then Manhattan U.S. Attorney Preet Bharara charged 17 managers and employees of the Conference on Jewish Material Claims for defrauding Germany 42.5 million dollars by creating thousands of false benefit applications for people who had not suffered in the Holocaust.
The scam operated by creating phony applications with false birth dates and invented histories of persecution to process compensation claims. In some cases the recipients were born after World War II and at least one person was not even Jewish.
Among those charged was Semyon Domnitser, a former director of the conference. Many of the applicants were recruited from Brooklyn's Russian community. All those charged hail from Brooklyn.
When a phony applicant got a check, the scammers were given a cut, Bharara said. The fraud which has been going on for 16 years was related to the 400 million dollars which Germany pays out each year to Holocaust survivors.
Later, in November 2015, Bharara's office charged three Israeli men in a 23-count indictment that alleged that they ran a extensive computer hacking and fraud scheme that targeted JPMorgan Chase, The Wall Street Journal, and ten other companies.
According to prosecutors, the Israeli's operation generated "hundreds of millions of dollars of illegal profit" and exposed the personal information of more than 100 million people.
Despite his service as a useful idiot propagating the Magnitsky Myth, Bharara discovered that for Russian Jewish oligarchs, criminals and scam artists, the motto is "Nikogda ne zabyt'!" Perhaps more recognizable by the German phrase: "Niemals vergessen!"
Cal , July 14, 2017 at 2:14 pmAbe – wow, what a story. I guess it's lucrative to "never forget"! Bandits.
backwardsevolution , July 14, 2017 at 4:21 pmhttps://www.ncjrs.gov/App/publications/Abstract.aspx?id=6180
National Criminal Justice Reference Service (NCJRS)
NCJRS Abstract
The document referenced below is part of the NCJRS Library collection. To conduct further searches of the collection, visit the NCJRS Abstracts Database. See the Obtain Documents page for direction on how to access resources online, via mail, through interlibrary loans, or in a local library.NCJ Number: NCJ 006180
Title: CRIMINALITY AMONG JEWS – AN OVERVIEWUnited States of America
Journal: ISSUES IN CRIMINOLOGY Volume:6 Issue:2 Dated:(SUMMER 1971) Pages:1-39
Date Published: 1971
Page Count: 15
.
Abstract: THE CONCLUSION OF MOST STUDIES IS THAT JEWS HAVE A LOW CRIME RATE. IT IS LOWER THAN THAT OF NON-JEWS TAKEN AS A WHOLE, LOWER THAN THAT OF OTHER RELIGIOUS GROUPS,HOWEVER, THE JEWISH CRIME RATE TENDS TO BE HIGHER THAN THAT OF NONJEWS AND OTHER RELIGIOUS GROUPS FOR WHITE-COLLAR OFFENSES,
THAT IS, COMMERCIAL OR COMMERCIALLY RELATED CRIMES, SUCH AS FRAUD, FRAUDULENT BANKRUPTCY, AND EMBEZZLEMENT.
Index Term(s): Behavioral and Social Sciences ; Adult offenders ; Minorities ; Behavioral science research ; Offender classification
Country: United States of America
Language: EnglishSkip Scott , July 15, 2017 at 1:57 pmCal – that does not surprise me at all. Of course they would be where the money is, and once you have money, you get nothing but the best defense. "I've got time and money on my side. Go ahead and take me to court. I'll string this thing along and it'll cost you a fortune. So let's deal. I'm good with a fine."
A rap on the knuckles, a fine, and no court case, no discovery of the truth that the people can see. Of course they'd be there. That IS the only place to be if you want to be a true criminal.
BannanaBoat , July 14, 2017 at 10:45 amThanks again Abe, you are a wealth of information. I think you have to allow for anyone to make a mistake, and Bharara has done a lot of good.
Cal , July 13, 2017 at 11:39 pmUSA justice for Oilygarchs; Ignore capital crimes and mass destruction ; concentrate on entertaining shenanigans.
BannanaBoat , July 14, 2017 at 10:52 amIf Trump wants to survive he better let go of his son-in-law, Jared Kushner.
Lets start here:
Trump's personal attorneys are reportedly fed up with Jared Kushner
http://www.businessinsider.com/jared-kushner-trump-lawyers-donald-jr-emails-2017-7Longtime Trump attorney Marc Kasowitz and his team have directed their grievance at Jared Kushner, Trump's son-in-law and senior White House adviser.
Citing a person familiar with Trump's legal team, The Times said Kasowitz has bristled at Kushner's "whispering in the president's ear" about stories on the Russia investigation without telling Kasowitz and his team.
The Times' source said the attorneys, who were hired as private counsel to Trump in light of the Russia investigation, view Kushner "as an obstacle and a freelancer" motivated to protect himself over over Trump. The lawyers reportedly told colleagues the work environment among Trump's inner circle was untenable, The Times said, suggesting Kasowitz could resignSecond
Who thinks Jared works for Trump? I don't.
Jared works for his father Charles Kushner, the former jail bird who hired prostitutes to blackmail his brother in law into not testifying against him. Jared spent every weekend his father was in prison visiting him.,,they are inseparable.Third
So what is Jared doing in his WH position to help his father and his failing RE empire?Trying to get loans from China, Russia, Qatar,Qatar
And why Is Robert Mueller Probing Jared Kushner's Finances?
Because of this no doubt:..seeking a loan for the Kushners from a Russian bank.
https://www.theguardian.com/world/2017/jun/03/sergei-gorkov-russian-banker-jared-kushner
The White House and the bank have offered differing accounts of the Kushner-Gorkov sit-down. While the White House said Kushner met Gorkov and other foreign representatives as a transition official to "help advance the president's foreign policy goals." Vnesheconombank, also known as VEB, said it was part of talks with business leaders about the bank's development strategy.
It said Kushner was representing Kushner companies, his family real estate empire.Jared Kushner 'tried and failed to get a $500m loan from Qatar before
http://www.independent.co.uk › News › World › Americas › US politics
2 days ago –
Jared Kushner tried and failed to secure a $500m loan from one of Qatar's richest businessmen, before pushing his father-in-law to toe a hard line with the country, it has been alleged. This intersection between Mr Kushner's real estate dealings and his father-in-law'sThe Kushners are about to lose their shirts..unless one of those foreign country's banks gives them the money.
At Kushners' Flagship Building, Mounting Debt and a Foundered Deal
https://www.nytimes.com/2017/04/03/nyregion/kushner-companies-666-fifth-avenue.html
The Fifth Avenue skyscraper was supposed to be the Kushner Companies' flagship in the heart of Manhattan -- a record-setting $1.8 billion souvenir proclaiming that the New Jersey developers Charles Kushner and his son Jared were playing in the big leagues.
And while it has been a visible symbol of their status, it has also it has also been a financial headache almost from the start. On Wednesday, the Kushners announced that talks had broken off with a Chinese financial conglomerate for a deal worth billions to redevelop the 41-story tower, at 666 Fifth Avenue, into a flashy 80-story ultraluxury skyscraper comprising a chic retail mall, a hotel and high-priced condominiums"Get these cockroaches out of the WH please.,,,Jared and his sister are running around the world trying to get money in exchange for giving them something from the Trump WH.
Cal , July 14, 2017 at 2:16 pmThe NYC skyline displays 666 in really really really HUGE !!!! numbers. Perhaps the USA government as Cheney announced has gone to the very very very DARK side.
Chris Kinder , July 14, 2017 at 12:15 amYea 666 probably isn't a coincidence .lol
backwardsevolution , July 14, 2017 at 1:58 amWhat I think most comments overlook here is the following: the US is the primary imperialist aggressor in the world today, and Russia, though it is an imperialist competitor, is much weaker and is generally losing ground. Early on, the US promised that NATO would not be extended into Eastern Europe, but now look at what's happened: not only does the US have NATO allies and and missiles in Eastern Europe, but it also engineered a coup against a pro-Russian regime in Ukraine, and is now trying to drive Russia out of Eastern Ukraine, as in Crimea and the Donbass and other areas of Eastern Ukraine, which are basically Russian going back more than a century. Putin is pretty mild compered to the US' aggressive stance. That's number one.
Number two is that the current anti-Russian hysteria in the US is all about maintaining the same war-mongering stance against Russia that existed in the cold war, and also about washing clean the Democratic Party leadership's crimes in the last election. Did the Russians hack the election? Maybe they tried, but the point is that what was exposed–the emails etc–were true information! They show that the DNC worked to deprive Bernie Sanders of the nomination, and hide crimes of the Clintons'! These exposures, not any Russian connection to the exposures, are what really lost Hillary the election.
So, what is going on here? The Democrats are trying to hide their many transgressions behind an anti-Russian scare, why? Because it is working, and because it fits in with US imperialist anti-Russian aims which span the entire post-war period, and continue today. And because it might help get Trump impeached. I would not mind that result one bit, but the Democrats are no alternative: that has been shown to be true over and over again.
This is all part of the US attempt to be the dominant imperialist power in the world–something which it has pursued since the end of the last world war, and something which both Democrats and Republicans–ie, the US ruling class behind them–are committed to. Revolutionaries say: the main enemy is at home, and that is what I say now. That is no endorsement of Russian imperialism, but a rejection of all imperialism and the capitalist exploitative system that gives rise to it.
Thanks for your attention -- Chris Kinder
mike k , July 14, 2017 at 11:35 amChris – good post. Thanks.
Paranam Kid , July 14, 2017 at 6:40 amChris, I think most commenters here are aware of everything you summarized above, but we just don't put all that in each individual post.
HIDE BEHIND , July 14, 2017 at 10:02 amIt is ironic that Browder on his website describes himself as running a battle against corporate corruption in Russia, and there is a quote by Walter Isaacson: "Bill Browder is an amazing moral crusader". http://www.billbrowder.com/bio
backwardsevolution , July 14, 2017 at 1:55 pmOne cannot talk of Russian monry laundering in US without exposing the Jewish Israeli and many AIPAC connections.
I studied not so much the Jewish Orthodoxy but mainly the evolution of noth their outlook upon G.. but also how those who do not believe in a G.. and still keep their cultural cohesiveness
The largest money laundering group in US is
both Jewish and Israeli, and while helping those of their cultural similarities, their ecpertise goes. Very deep in Eastern U.S. politics and especially strong in all commercial real estate, funding, setting up bribes to permitting officials,contractors and owners of construvtion firms.
Financials some quite large are within this Jew/Israel connections, as all they who offshore need those proper connections to do so. take bribes need the funding cleaned and
flow out through very large tax free Jewish Charity Orgd, the largest ones are those of Orthodox.
GOV Christie years ago headed the largest sting operation to try and uproot what at that time he believed was just statewide tax fraud and laundering operations, many odd cash flows into political party hacks running for evrry gov position electefd or appointed.
Catchng a member of one of the most influential Orthofox familys mrmbers, that member rolled on many many indivifuals of his own culture.
It was only when Vhristies investigative team began turning up far larger cases of laundering and political donations thst msinly centered in NY Stste and City, fid he then find out howuch power this grouping had.
Soon darn near every AIPAC aided elected politico from city state and rspecially Congress was warning him to end investigation.
Which he did.
His reward was for his fat ass to be funded for a run towards US Presidency, without any visibly open opposition by that cultural grouping.
No it is not odd for Jewery to charge goyim usury or to aid in political schemes that advance their groups aims.
One thing to remenber by the Bible thumpers who delay any talks of Israel ; Christian Zionist, is that to be of their culture one does not have to believe in G.
There are a few excellent books written about early days Jewish immigrant Pre Irish andblre Sicilian mafias.
The Jewish one remainst to this day but are as well orgNized as the untold history of what is known as "The Southern mafia.Deborah Andrew , July 14, 2017 at 10:03 amHide Behind – fascinating! I guess if we ever knew half of what goes on behind the scenes, we'd be shocked. We only ever know things like this exist when people like you enlighten us, or when there's a blockbuster movie about it. Thanks.
BannanaBoat , July 14, 2017 at 11:00 amWith great respect and appreciation for your writing about the current unsubstantiated conversations/writing about 'Russia-gate' I would ask if 'the other side of a story' is really what we want or, is it that we want all the facts. Analysis and opinions, that include the facts, may differ. However, it is the readers who will evaluate the varied analysis and opinions when they include all the facts known. I raise this question, as it seems to me that we have a binary approach to our thinking and decision making. Something is either good or bad, this or that. Sides are taken. Labels are added (such as conservative and progressive). Would we not be wiser and would our decision making not be wiser if it were based on a set of principles? My own preference: the precautionary principle and the principle of do no harm. I am suggesting that we abandon the phrase and notion of the 'other side of the story' and replace it with: based on the facts now known, or, based on all the facts revealed to date or, until more facts are revealed it appears
Zachary Smith , July 14, 2017 at 11:04 amHEAR -- HEAR -- Excellent --
Kiza , July 15, 2017 at 2:52 amI would ask if 'the other side of a story' is really what we want or, is it that we want all the facts.
Replying to a question with another question isn't really good form, but given my knowledge level of this case I can see no alternative.
How do you propose to determine the "facts" when virtually none of the characters involved in the affair appear trustworthy? Also, there is a lot of evidence (displayed by Mr. Parry) that another set of "characters" we call the Mainstream Media are extremely biased and one-sided with their coverage of the story.
Again – Where am I going to find those "facts" you speak of?
backwardsevolution , July 14, 2017 at 2:02 pmSpot on.
Cal , July 14, 2017 at 8:52 pmDeborah Andrew – good comment, but the problem is that we never seem to get "the other side of the story" from the MSM. You are right in pointing out that "the other side of the story" probably isn't ALL there is (as nothing is completely black and white), but at least it's something. The only way we can ever get to the truth is to put the facts together and question them, but how are you going to do that when the facts are kept away from us?
It can be very frustrating, can't it, Deborah? Cheers.
Michael Kenny , July 14, 2017 at 11:22 amNice comment.
None of us can know the exact truth of anything we ourselves haven't seen or been involved in. The best we can do is try to find trusted sources, be objective, analytical and compare different stories and known the backgrounds and possible agendas of the people involved in a issue or story.
We can use some clues to help us cull thru what we hear and read.
Twenty-Five Rules of Disinformation
Note: The first rule and last five (or six, depending on situation) rules are generally not directly within the ability of the traditional disinfo artist to apply. These rules are generally used more directly by those at the leadership, key players, or planning level of the criminal conspiracy or conspiracy to cover up.
1. Hear no evil, see no evil, speak no evil. Regardless of what you know, don't discuss it -- especially if you are a public figure, news anchor, etc. If it's not reported, it didn't happen, and you never have to deal with the issues.
2. Become incredulous and indignant. Avoid discussing key issues and instead focus on side issues which can be used show the topic as being critical of some otherwise sacrosanct group or theme. This is also known as the 'How dare you!' gambit.
3. Create rumor mongers. Avoid discussing issues by describing all charges, regardless of venue or evidence, as mere rumors and wild accusations. Other derogatory terms mutually exclusive of truth may work as well. This method which works especially well with a silent press, because the only way the public can learn of the facts are through such 'arguable rumors'. If you can associate the material with the Internet, use this fact to certify it a 'wild rumor' from a 'bunch of kids on the Internet' which can have no basis in fact.
4. Use a straw man. Find or create a seeming element of your opponent's argument which you can easily knock down to make yourself look good and the opponent to look bad. Either make up an issue you may safely imply exists based on your interpretation of the opponent/opponent arguments/situation, or select the weakest aspect of the weakest charges. Amplify their significance and destroy them in a way which appears to debunk all the charges, real and fabricated alike, while actually avoiding discussion of the real issues.
5. Sidetrack opponents with name calling and ridicule. This is also known as the primary 'attack the messenger' ploy, though other methods qualify as variants of that approach. Associate opponents with unpopular titles such as 'kooks', 'right-wing', 'liberal', 'left-wing', 'terrorists', 'conspiracy buffs', 'radicals', 'militia', 'racists', 'religious fanatics', 'sexual deviates', and so forth. This makes others shrink from support out of fear of gaining the same label, and you avoid dealing with issues.
6. Hit and Run. In any public forum, make a brief attack of your opponent or the opponent position and then scamper off before an answer can be fielded, or simply ignore any answer. This works extremely well in Internet and letters-to-the-editor environments where a steady stream of new identities can be called upon without having to explain criticism, reasoning -- simply make an accusation or other attack, never discussing issues, and never answering any subsequent response, for that would dignify the opponent's viewpoint.
7. Question motives. Twist or amplify any fact which could be taken to imply that the opponent operates out of a hidden personal agenda or other bias. This avoids discussing issues and forces the accuser on the defensive.
8. Invoke authority. Claim for yourself or associate yourself with authority and present your argument with enough 'jargon' and 'minutia' to illustrate you are 'one who knows', and simply say it isn't so without discussing issues or demonstrating concretely why or citing sources.
9. Play Dumb. No matter what evidence or logical argument is offered, avoid discussing issues except with denials they have any credibility, make any sense, provide any proof, contain or make a point, have logic, or support a conclusion. Mix well for maximum effect.
10. Associate opponent charges with old news. A derivative of the straw man -- usually, in any large-scale matter of high visibility, someone will make charges early on which can be or were already easily dealt with – a kind of investment for the future should the matter not be so easily contained.) Where it can be foreseen, have your own side raise a straw man issue and have it dealt with early on as part of the initial contingency plans. Subsequent charges, regardless of validity or new ground uncovered, can usually then be associated with the original charge and dismissed as simply being a rehash without need to address current issues -- so much the better where the opponent is or was involved with the original source.
11. Establish and rely upon fall-back positions. Using a minor matter or element of the facts, take the 'high road' and 'confess' with candor that some innocent mistake, in hindsight, was made -- but that opponents have seized on the opportunity to blow it all out of proportion and imply greater criminalities which, 'just isn't so.' Others can reinforce this on your behalf, later, and even publicly 'call for an end to the nonsense' because you have already 'done the right thing.' Done properly, this can garner sympathy and respect for 'coming clean' and 'owning up' to your mistakes without addressing more serious issues.
12. Enigmas have no solution. Drawing upon the overall umbrella of events surrounding the crime and the multitude of players and events, paint the entire affair as too complex to solve. This causes those otherwise following the matter to begin to lose interest more quickly without having to address the actual issues.
13. Alice in Wonderland Logic. Avoid discussion of the issues by reasoning backwards or with an apparent deductive logic which forbears any actual material fact.
14. Demand complete solutions. Avoid the issues by requiring opponents to solve the crime at hand completely, a ploy which works best with issues qualifying for rule 10.
15. Fit the facts to alternate conclusions. This requires creative thinking unless the crime was planned with contingency conclusions in place.
16. Vanish evidence and witnesses. If it does not exist, it is not fact, and you won't have to address the issue.
17. Change the subject. Usually in connection with one of the other ploys listed here, find a way to side-track the discussion with abrasive or controversial comments in hopes of turning attention to a new, more manageable topic. This works especially well with companions who can 'argue' with you over the new topic and polarize the discussion arena in order to avoid discussing more key issues.
18. Emotionalize, Antagonize, and Goad Opponents. If you can't do anything else, chide and taunt your opponents and draw them into emotional responses which will tend to make them look foolish and overly motivated, and generally render their material somewhat less coherent. Not only will you avoid discussing the issues in the first instance, but even if their emotional response addresses the issue, you can further avoid the issues by then focusing on how 'sensitive they are to criticism.'
19. Ignore proof presented, demand impossible proofs. This is perhaps a variant of the 'play dumb' rule. Regardless of what material may be presented by an opponent in public forums, claim the material irrelevant and demand proof that is impossible for the opponent to come by (it may exist, but not be at his disposal, or it may be something which is known to be safely destroyed or withheld, such as a murder weapon.) In order to completely avoid discussing issues, it may be required that you to categorically deny and be critical of media or books as valid sources, deny that witnesses are acceptable, or even deny that statements made by government or other authorities have any meaning or relevance.
20. False evidence. Whenever possible, introduce new facts or clues designed and manufactured to conflict with opponent presentations -- as useful tools to neutralize sensitive issues or impede resolution. This works best when the crime was designed with contingencies for the purpose, and the facts cannot be easily separated from the fabrications.
21. Call a Grand Jury, Special Prosecutor, or other empowered investigative body. Subvert the (process) to your benefit and effectively neutralize all sensitive issues without open discussion. Once convened, the evidence and testimony are required to be secret when properly handled. For instance, if you own the prosecuting attorney, it can insure a Grand Jury hears no useful evidence and that the evidence is sealed and unavailable to subsequent investigators. Once a favorable verdict is achieved, the matter can be considered officially closed. Usually, this technique is applied to find the guilty innocent, but it can also be used to obtain charges when seeking to frame a victim.
22. Manufacture a new truth. Create your own expert(s), group(s), author(s), leader(s) or influence existing ones willing to forge new ground via scientific, investigative, or social research or testimony which concludes favorably. In this way, if you must actually address issues, you can do so authoritatively.
23. Create bigger distractions. If the above does not seem to be working to distract from sensitive issues, or to prevent unwanted media coverage of unstoppable events such as trials, create bigger news stories (or treat them as such) to distract the multitudes.
24. Silence critics. If the above methods do not prevail, consider removing opponents from circulation by some definitive solution so that the need to address issues is removed entirely. This can be by their death, arrest and detention, blackmail or destruction of theircharacter by release of blackmail information, or merely by destroying them financially, emotionally, or severely damaging their health.
25. Vanish. If you are a key holder of secrets or otherwise overly illuminated and you think the heat is getting too hot, to avoid the issues, vacate the kitchen. .
Note: There are other ways to attack truth, but these listed are the most common, and others are likely derivatives of these. In the end, you can usually spot the professional disinfo players by one or more of seven (now 8) distinct traits:
Eight Traits of the Disinformationalist
by H. Michael Sweeney
copyright (c) 1997, 2000 All rights reserved(Revised April 2000 – formerly SEVEN Traits)
1) Avoidance. They never actually discuss issues head-on or provide constructive input, generally avoiding citation of references or credentials. Rather, they merely imply this, that, and the other. Virtually everything about their presentation implies their authority and expert knowledge in the matter without any further justification for credibility.
2) Selectivity. They tend to pick and choose opponents carefully, either applying the hit-and-run approach against mere commentators supportive of opponents, or focusing heavier attacks on key opponents who are known to directly address issues. .
3) Coincidental. They tend to surface suddenly and somewhat coincidentally with a new controversial topic with no clear prior record of participation in general discussions in the particular public arena involved. They likewise tend to vanish once the topic is no longer of general concern. They were likely directed or elected to be there for a reason, and vanish with the reason.
4) Teamwork. They tend to operate in self-congratulatory and complementary packs or teams. Of course, this can happen naturally in any public forum, but there will likely be an ongoing pattern of frequent exchanges of this sort where professionals are involved. Sometimes one of the players will infiltrate the opponent camp to become a source for straw man or other tactics designed to dilute opponent presentation strength.
5) Anti-conspiratorial. They almost always have disdain for 'conspiracy theorists' and, usually, for those who in any way believe JFK was not killed by LHO. Ask yourself why, if they hold such disdain for conspiracy theorists, do they focus on defending a single topic discussed in a NG focusing on conspiracies? One might think they would either be trying to make fools of everyone on every topic, or simply ignore the group they hold in such disdain.Or, one might more rightly conclude they have an ulterior motive for their actions in going out of their way to focus as they do.
6) Artificial Emotions. An odd kind of 'artificial' emotionalism and an unusually thick skin -- an ability to persevere and persist even in the face of overwhelming criticism and unacceptance. You might have outright rage and indignation one moment, ho-hum the next, and more anger later -- an emotional yo-yo. With respect to being thick-skinned, no amount of criticism will deter them from doing their job, and they will generally continue their old disinfo patterns without any adjustments to criticisms of how obvious it is that they play that game -- where a more rational individual who truly cares what others think might seek to improve their communications style, substance, and so forth, or simply give up.
7) Inconsistent. There is also a tendency to make mistakes which betray their true self/motives. This may stem from not really knowing their topic, or it may be somewhat 'freudian', so to speak, in that perhaps they really root for the side of truth deep within.
8) BONUS TRAIT: Time Constant. Wth respect to News Groups, is the response time factor. There are three ways this can be seen to work, especially when the government or other empowered player is involved in a cover up operation:
1) ANY NG posting by a targeted proponent for truth can result in an IMMEDIATE response. The government and other empowered players can afford to pay people to sit there and watch for an opportunity to do some damage. SINCE DISINFO IN A NG ONLY WORKS IF THE READER SEES IT – FAST RESPONSE IS CALLED FOR, or the visitor may be swayed towards truth.
2) When dealing in more direct ways with a disinformationalist, such as email, DELAY IS CALLED FOR – there will usually be a minimum of a 48-72 hour delay. This allows a sit-down team discussion on response strategy for best effect, and even enough time to 'get permission' or instruction from a formal chain of command.
3) In the NG example 1) above, it will often ALSO be seen that bigger guns are drawn and fired after the same 48-72 hours delay – the team approach in play. This is especially true when the targeted truth seeker or their comments are considered more important with respect to potential to reveal truth. Thus, a serious truth sayer will be attacked twice for the same sin.Skip Scott , July 14, 2017 at 1:40 pmI don't really see Mr Parry's point. The banning of Nekrasov's film isn't proof of the accuracy of its contents and even less does it prove that anything that runs counter to Nekrasov's argument is false. Nor does proving that a mainstream meida story is false prove that an internet story saying the opposite is true. "A calls B a liar. B proves that A is a liar. That proves that B is truthful." Not very logical! What seems to be established is that the lawyer in question represents a Russian-owned company, a money-laundering prosecution against which was settled last May on the basis of what the company called a "surprise" offer from prosecutors that was "too good to refuse". This "Russian government attorney" (dixit Goldstone) had information concerning illegal campaign contributions to the Democratic National Committee. Trump Jr jumped at it and it makes no difference whether he was tricked or even whether he actually got anything, his intent was clear. In addition DNC "dirt" did indeed appear on the internet via Wikileaks, just as "dirt" appeared in the French election. MacronLeaks proves Russiagate and "Juniorgate" confirms MacronLeaks. The question now is did Trump, as president, intervene to bring about this "too good to refuse" offer? That question cannot just be written off with the "no evidence" argument.
Abe , July 14, 2017 at 9:27 pmGod, you are persistent if nothing else. Keep repeating the same lie until it is taken as true, just like the MSM. You say that Russia-gate, Macron leaks, etc can't be written off with the "no evidence" argument (how is that logical?), and then you trash a film you haven't even seen because it doesn't fit your narrative. Maybe some evidence is provided in the film, did you consider that possibility? That fact that Nekrasov started out to make a pro Broder film, and then switched sides, leads me to believe he found some disturbing evidence. And if you look into Nekrasov you will find that he is no fan of Putin, so one has to wonder what his motive is if he is lying.
I am wondering if you ever look back at previous posts, because you never reply to a rebuttal. If you did, you would see that you are almost universally seen by the commenters here as a troll. If you are being paid, I suppose it might not matter much to you. However, your employer should look for someone with more intelligent arguments. He is wasting his money on you.
Kiza , July 15, 2017 at 3:04 amPropaganda trolls attempt to trash the information space by dismissing, distracting, diverting, denying, deceiving and distorting the facts.
The trolls aim at confusing rather than convincing the audience.
The tag team troll performance of "Michael Kenny" and "David" is accompanied by loud declarations that they have "logic" on their side and "evidence" somewhere. Then they shriek that they're being "censored".
Propaganda trolls target the comments section of independent investigative journalism sites like Consortium News, typically showing up when articles discuss the West's "regime change" wars and deception operations.
Pro-Israel Hasbara propaganda trolls also strive to discredit websites, articles, and videos critical of Israel and Zionism. Hasbara smear tactics have intensified due to increasing Israeli threats of military aggression, Israeli collusion with the United States in "regime change" projects from the Middle East to Eastern Europe, and Israeli links to international organized crime and terrorism in Syria.
Abe , July 15, 2017 at 4:15 pmGee Abe, you are a magician (and I thought that you only quote excellent articles). Short and sharp.
exiled off mainstreet , July 14, 2017 at 1:54 pmWhen they have a hard time selling that they're being "censored" (after more than a dozen comments), trolls complain that they're being "dismissed" and "invalidated" by "hostile voices".
mike k , July 14, 2017 at 2:01 pmAaron Kesel, in Activistpost documents the links between Veselnitskaya and Fusion GPS, the company engaged by the Clintons to prepare the defamatory Christopher Steele Dossier against Trump later used by Comey to help gin up the Russian influence conspiracy theory. In the article, it is true the GPS connection may have involved her lobbying efforts to overturn the Magnitsky law, not the dossier, but it is also interesting that she is on record as anti-Trump and having associations with Clinton democrats. Though it may have been part of the beginnings of a conspiracy, the conspiracy may have developed later and the meeting became something they related back to to bolster this fraudulent dangerous initiative.
Skip Scott , July 14, 2017 at 5:51 pmI think as you say Skip that most on this blog have seen through Michael Kenny's stuff. Nobody's buying it. He's harmless. If he's here on his own dime, if we don't feed him, he will get bored and go away. If he's being payed, he may persist, but so what. Sometimes I check the MSM just to see what the propaganda line is. Kenny is like that; his shallow arguments tell me what we must counter to wake people up.
Kiza , July 15, 2017 at 3:14 amYeah mike k, I know you're right. I don't know why I let the guy get under my skin. Perhaps it's because he never responds to a rebuttal.
Philippe Lemoine , July 14, 2017 at 3:41 pmThen you would have to waste more time rebutting the (equally empty) rebuttal.
The second thing is that many trolls suffer from DID, that is the Dissociative Identity Disorder, aka sock puppetry. There is a bit of similarity in argument between David and Michael and HAWKINS, only one of them rebuts quite often.
Joe Tedesky , July 14, 2017 at 4:43 pmAnother excellent article! I wrote a very detailed blog post in which I methodically take apart the latest "revelation" about Donald Trump Jr.'s emails. I talk a lot about the Magnitsky Act, which is very relevant to this whole story.
Philippe Lemoine , July 14, 2017 at 5:14 pmI always like reading your articles Philippe, you have a real talent. Maybe read what I wrote above, but I'm sensing this Trump Jr affair will help Hillary more than anything, to give her a reprieve from any further FBI investigations. I mean somehow, I'm sure by Hillary's standards and desires, that this whole crazy investigation thing has to end. So, would it not seem reasonable to believe that by allowing Donald Jr to be taken off the hook, that Hillary likewise will enjoy the taste of forgiveness?
Tell me if you think this Donald Trump Jr scandal could lead to this Joe
PS if so this could be a good next article to write there I go telling the band what to play, but seriously if this Russian conclusion episode goes on much longer, could you not see a grand bargain and a deal being made?
Abe , July 14, 2017 at 6:48 pmThanks for the compliment, I'm glad you like the blog. I wasn't under the impression that Clinton was under any particular danger from the Justice Department, but even if she was, she doesn't have the power to stop this Trump/Russia collusion nonsense because it's pushed by a lot of people that have nothing to do with her except for the fact that they would have preferred her to win.
Philippe Lemoine , July 14, 2017 at 10:27 pmExcellent summary and analysis, Philippe. Key observation:
"as even the New York Times admits, there is no evidence that Natalia Veselnitskaya, the lawyer who met Donald Trump Jr., Jared Kushner and Paul Manafort for 20-30 minutes on 9 June 2016, provided any such information during that meeting. Donald Trump Jr. said that, although he asked her about it, she didn't give them anything on Clinton, but talked to him about the Magnitsky Act and Russia's decision to block adoption by American couples in retaliation. Of course, if we just had his word, we'd have no particularly good reason to believe him. But the fact remains that no documents of the sort described in Goldstone's ridiculous email ever surfaced during the campaign, which makes what he is saying about how the meeting went down pretty convincing, at least on this specific point. It should be noted that Donald Trump Jr. has offered to testify under oath about anything related to this meeting. Moreover, he also said during the interview he gave to Sean Hannity that there was no follow-up to this meeting, which is unlikely to be a lie since he must know that, given the hysteria about this meeting, it would come out. He may not be the brightest guy in the world, but surely he or at least the people who advised him before that interview are not that stupid."
exiled off mainstreet , July 16, 2017 at 1:31 pmThanks!
Mike , July 14, 2017 at 9:36 pmYour own necpluribus article was one of the best I've seen summarising the whole controversy, and your exhaustive responses to the pro-deep state critics was edifying. I am now convinced that your view of Veselnitskaya's role in the affair and the nature her connections to the dossier drafting company GPS being based on their unrelated work on the magnitsky law is accurate.
Big Tim , July 15, 2017 at 12:31 amPretty interesting:
Rake , July 15, 2017 at 9:13 am"Bill Browder, born into a notable Jewish family in Chicago, is the grandson of Earl Browder, the former leader of the Communist Party USA,[2] and the son of Eva (Tislowitz) and Felix Browder, a mathematician. He grew up in Chicago, Illinois, and attended the University of Chicago where he studied economics. He received an MBA from Stanford Business School[3] in 1989 where his classmates included Gary Kremen and Rich Kelley. In 1998, Browder gave up his US citizenship and became a British citizen.[4] Prior to setting up Hermitage, Browder worked in the Eastern European practice of the Boston Consulting Group[5] in London and managed the Russian proprietary investments desk at Salomon Brothers.[6]"
Anna , July 15, 2017 at 10:25 amSuccessfully keeping a salient argument from being heard is scary, given the social media and alternative media players who are all ripe to uncover a bombshell. Sy Hersh needs to convince Nekrasov to get his documentary to WkiLeaks.
P. Clark , July 15, 2017 at 12:01 pm"Sy Hersh needs to convince Nekrasov to get his documentary to WkiLeaks."
Agree.Cal , July 15, 2017 at 8:10 pmWhen Trump suggested that a Mexican-American judge might be biased because of this ethnicity the media said this was racist. Yet these same outlets like the New York Times are now routinely questioning Russian-American loyalty because of their ethnicity. As usual a ridiculous double standard. Basically the assumption is all Russians are bad. We didn't even have this during the cold war.
MichaelAngeloRaphaelo , July 15, 2017 at 12:17 pmYes indeed P. Clark .that kind or hypocrisy makes my head explode!
Roy G Biv , July 15, 2017 at 12:50 pmEnough's Enough
STOP DNC/DEMs
#CryBabyFakeNewsBSSupport Duly ELECTED
@POTUS @realDonaldTrump
#BoycottFakeNewsSponsors
#DrainTheSwamp
#MAGAFinnish wonderer , July 15, 2017 at 1:19 pmCN article on 911 truthers:
Mark Dankof , July 15, 2017 at 3:21 pmWow, I just learned via this article that in US Nekrasov is labeled as "pro-Kremlin" by WaPo. That's just too funny. He's in a relationship with a Finnish MEP Heidi Hautala, who is very well known for her anti-Russia mentality. Nekrasov is defenetly anti-Kremlin if something. He was supposed to make an anti-Kremlin documentary, but the facts turned out to be different than he thought, but still finished his documentary.
Roy G Biv , July 15, 2017 at 4:38 pmThe lengths to which the Neo Conservative War Cabal will go to destroy freedom of speech and access to alternative news sources underscores that the United States is becoming an Orwellian agitation-propaganda police state equally dedicated to igniting World War III for Netanyahu, the Central Banks, our Wahhabic Petrodollar Partners, and a pipeline consortium or two. The Old American Republic is dead.
Abe , July 15, 2017 at 5:41 pmInteresting to note that each and everyone of David's comments were bleached from this page. Looks like he was right about the censorship. Sad.
David , July 16, 2017 at 3:51 pmNote "allegations that are unsupported by facts".
https://consortiumnews.com/2016/01/19/a-reminder-about-comment-rules-2/
Kiza , July 15, 2017 at 6:06 pmDuly noted Abe. But you should adhere to the first part of the statement that you somehow forgot to include:
From Editor Robert Parry: At Consortiumnews, we welcome substantive comments about our articles, but comments should avoid abusive language toward other commenters or our writers, racial or religious slurs (including anti-Semitism and Islamophobia), and allegations that are unsupported by facts.
Roy G Biv , July 16, 2017 at 5:44 amMy favorite was David's claim that he contributed to this zine whilst it was publishing articles not to his liking (/sarc). I kindly reminded him that people pay much more money to have publishing the way they like it – for example how much Bezos paid for Washington Post, or Omidyar to establish The Intercept.
Except for such funny component, David's comments were totally substance free and useless. Nothing lost with bleaching.
Abe , July 16, 2017 at 1:53 pmYou're practicing disinformation. He actually said he contributed early on and had problems with the recent course of the CN trajectory. Censorship is cowardly.
David , July 16, 2017 at 3:57 pmConsortium News welcomes substantive comments.
"David" was presenting allegations unsupported by facts and disrupting on-topic discussion.
Violations of CN comment policy are taken down by the moderator. Period. It has nothing to do with "censorship".
Stop practicing disinformation and spin, "Roy G Biv".
Abe , July 16, 2017 at 5:02 pmI stopped contributing after the unintellectual dismissal of scientific 911 truthers. And it's easy for you to paint over my comments as they have been scrubbed. There was plenty of useful substance, it just ran against the tide. Sorry you didn't appreciate it the contrary viewpoint or have the curiosity to read the backstory.
dub , July 15, 2017 at 9:44 pmThe cowardly claim of "censorship".
The typical troll whine is that their "contrary viewpoint" was "dismissed" merely because it "ran against the tide".
No. Your allegations were unsupported by facts. They still are.
Martyrdom is just another troll tactic.
Roy G Biv , July 16, 2017 at 5:56 amtorrent for the film?
Abe , July 16, 2017 at 1:16 pmHere is the pdf of the legal brief about the Magnitsky film submitted by Senator Grassly to Homeland Security Chief. Interesting read and casts doubt on the claims made in the film, refutes several claims actually. Skip past Chuck Grassly's first two page intro to get to the meat of it. If you are serious about a debate on the merits of the case, this is essential reading.
David , July 16, 2017 at 1:50 pmYes, very interesting read. By all means, examine the brief.
But forget the spin from "Roy G Biv" because the brief actually refutes nothing about Andrei Nekrasov's film.
It simply notes that the Russian government was understandably concerned about "unscrupulous swindler" and "sleazy crook" William Browder.
After your finished reading the brief, try to remember any time when Congress dared to examine a lobbying campaign undertaken on behalf of Israeli (which is to say, predominantly Russian Jewish) interests, the circumstances surrounding a pro-Israel lobbying effort and the potential FARA violations involved. or the background of a Jewish "Russian immigrant".
Note on page 3 of the cover letter the CC to The Honorable Dianne Feinstein, Ranking Member of the Senate Committee on the Judiciary. Feinstein was born Dianne Emiel Goldman in San Francisco, to Betty (née Rosenburg), a former model, and Leon Goldman, a surgeon. Feinstein's paternal grandparents were Jewish immigrants from Poland. Her maternal grandparents, the Rosenburg family, were from Saint Petersburg, Russia. While they were of German-Jewish ancestry, they practiced the Russian Orthodox faith as was required for Jews residing in Saint Petersburg.
In 1980, Feinstein married Richard C. Blum, an investment banker. In 2003, Feinstein was ranked the fifth-wealthiest senator, with an estimated net worth of US$26 million. By 2005 her net worth had increased to between US$43 million and US$99 million.
Like the rest of Congress, Feinstein knows the "right way" to vote.
Abe , July 16, 2017 at 2:11 pmSo you're saying because a Jew Senator was CC'd it invalidates the information? Read the first page again. The Chairman of the Senate Judiciary Committee is obligated to CC these submissions to the ranking member of the Committee, Jew heritage or not. Misinformation and disinformation from you Abe, or generously, maybe lazy reading. The italicized unscrupulous swindler and sleazy crook comments were quoting the Russian Foreign Minister Sergei Lavrov after the Washington screening of Nekrasov's film and demonstrating Russia's intentions to discredit Browder. You are practiced at the art of deception. Hopefully readers will simply look for themselves.
David , July 16, 2017 at 2:55 pmAh, comrade "David". We see you're back muttering about "disinformation" using your "own name".
My statements about Senator Feinstein are entirely supported by facts. You really should look into that.
Also, please note that quotation marks are not italics.
And please note that the Russian Foreign Minister is legally authorized to present the view of the Russian government.
Browder is pretty effective at discrediting himself. He simply has to open his mouth.
I encourage readers to look for themselves, and not simply take the word of one Browder's sockpuppets.
David , July 16, 2017 at 2:59 pmIt won't last papushka. Every post and pended moderated post was scrubbed yesterday, to the cheers of you and your mean spirited friends. But truth is truth and should be defended. So to the point, I reread the Judiciary Committee linked document, and the items you specified are in italics, because the report is quoting Lavrov's comments to a Moscow news paper and "another paper" as evidence of Russia's efforts to undermine the credibility and standing of Browder. This is hardly obscure. It's plain as day if you just read it.
Abe , July 16, 2017 at 4:01 pmAlso Abe, before I get deleted again, I don't question any of you geneological description of Feinstein. I merely pointed out that she is the ranking Democrat on the House Judiciary Committee, and it is normal for the Chairman of the Committee (Republican) to CC the ranking member. Unless of course it is Devin Nunes, then fairness and tradition goes out the window.
David , July 16, 2017 at 5:07 pmIt's plain as day, "David" or whatever other name you're trolling under, that you're here to loudly "defend" the "credibility" and "standing" of William Browder.
Sorry, but you're going to have to "defend" Browder with something other than your usual innuendo, blather about 9-11, and slurs against RP.
Otherwise it will be recognized for what it is, repeated violation of CN comment policy, and taken down by the moderator again.
Good luck to any troll who wants to "defend" Browder's record.
But you're gonna have to earn your pay with something other than your signature unsupported allegations, 9-11 diversions, and the "non-Jewish Russian haters gonna hate" propaganda shtick.
Anonymous , July 16, 2017 at 10:26 amI wish you would stop with the name calling. I am not a troll. I have been trying to make simple rational points. You respond by calling me names and wholly ignoring and/or misrepresenting and obfuscating easily verifiable facts. I suspect you are the moderator of this page, and if so am surprised by your consistent negative references to Jews. I'm not Jewish but you're really over the top. Of course you have many friends here so you get little push back, but I really hope you are not Bob or Sam.
MillyBloom54 , July 16, 2017 at 12:31 pmWe can see that it was what can be considered to be a Complex situation, where it was said that someone had Dirt on Hillary Clinton, but there was No collusion and there was No attempted collusion, but there was Patriotism and Concern for Others during a Perplexing situation.
This is because of what is Known as Arkancide, and which is associated with some People who say they have Dirt on the Clintons.
The Obvious and Humane thing to do was to arrange to meet the Russian Lawyer, who it was Alleged to have Dirt on Hillary Clinton, regardless of any possible Alleged Electoral advantage against Hillary Clinton, and until further information, there may have been some National Security Concerns, because it was Known that Hillary Clinton committed Espionage with Top Secret Information on her Unauthorized, Clandestine, Secret Email Server, and the Obvious cover up by the Department of Justice and the FBI, and so it was with this background that this Complex situation had to be dealt with.
This is because there is Greater Protection for a Person who has Dirt or Alleged Dirt on the Clintons, if that Information is share with other People.
This is because it is a Complete Waste of time to go to the Authorities, because they will Not do anything against Clinton Crimes, and a former Haitian Government Official was found dead only days before he was to give Testimony regarding the Clinton Foundation.
We saw this with Seth Rich, where the Police Videos has been withheld, and we have seen the Obstruction in investigating that Crime.
The message to Leakers is that Seth Rich was taken to hospital and Treated and was on his way to Fully Recovering, but he died in hospital, and those who were thinking of Leaking Understood the message from that.
There was Also concern for Rob Goldstone, who Alleged that the Russian Lawyer had Dirt on the Clintons.
We Know that is is said Goldstone that he did Not want to hear what was said at the meeting.
This is because Goldstone wanted associates of Candidate Donald Trump to Know that he did Not know what was said at that meeting.
We now Know that the meeting was a set up to Improperly obtain a FISA Warrant, which was Requested in June of 2016, and that is same the month and the year as the meeting that the Russian Lawyer attended.
There was what was an Unusual granting of a Special Visa so that the Russian Lawyer could attend that set up, which was Improperly Used to Request a FISA Warrant in order to Improperly Spy on an Opposition Political Candidate in order to Improperly gain an Electoral advantage in an Undemocratic manner, because if anything wrong was intended by Associates of Candidate Donald Trump, then there were enough People in that meeting who were the Equivalent of Establishment Democrats and Establishment Republicans, because we Know that after that meeting, that the husband of the former Florida chair of the Trump campaign obtained a front row seat to a June 2016 House Foreign Affairs Committee hearing for the Russian Lawyer.
There are Americans who consider that the 2 Major Political Party Tyranny has Betrayed the Constitution and the Principles of Democracy, because they oppose President Donald Trump's Election Integrity Commission, because they think that the Establishment Republicans and the Establishment Democrats are the Bribed and Corrupted Puppets of the Shadow Regime.
We Know from Senator Sanders, that if Americans want a Political Revolution, then they will need their own Political Party.
There are Americans who think that a Group of Democratic Party Voters and Republican Party Voters who have No association with the Democratic Party or the Republican Party, and that they may be named The Guardians of American Democracy.
These Guardians of American Democracy would be a numerous Group of People, and they would ask Republican Voters to Vote for the Democratic Party Representative instead of the Republican who is in Congress and who is seeking Reelection, in exchange for Democratic Party Voters to Vote for the Republican Party Candidate instead of the Democrat who is in Congress and who is seeking Reelection, and the same can be done for the Senate, because the American People have to Decide if it is they the Shadow Regime, or if it is We the People, and the Establishment Republicans and the Establishment Democrats are the Bribed and Corrupt Puppets of the Shadow Regime, and there would be equal numbers of Republicans and Democrats replaced in this manner, and so it will Not affect their numbers in the Congress or the Senate.
There could be People who think that Debbie Wasserman Schultz was Unacceptability Biased and Unacceptability Corrupt during the Democratic Party Primaries, and that if she wants a Democratic Party Candidate to be Elected in her Congressional District, then she Should announce that she will Not be contesting the next Election, and there could be People who think that Speaker Paul Ryan was Unacceptability Disloyal by insufficiently endorse the Republican Presidential nominee, and with other matters, and that if he wants a Republican Party Candidate to be Elected in his Congressional District, then he Should announce that he will Not be contesting the next Election, and then the Guardians of American Democracy can look at other Dinos and Rinos, including those in the Senate, because the Constitution says the words: We the People.
There are Many Americans who have Noticed that Criminal Elites escape Justice, and Corruption is the norm in American Politics.
There are those who Supported Senator Sanders who Realize that Senator Sanders would have been Impeached had he become President, and they Know that they Need President Donald Trump to prepare the Political Landscape so that someone like Senator Sanders could be President, without a Coup attempt that is being attempted on President Donald Trump, and while these People may not Vote for the Republicans, they can Refuse to Vote for the Democratic Party, until the conditions are there for a Constitutional Republic and a Constitutional Democracy, and they want the Illegal Mueller Team to recuse themselves from this pile of Vile and Putrid McCarthyist Lies Invented by their Shadow Regime Puppet Masters,
There are Many Americans who want Voter Identification and Paper Ballots for Elections, and they have seen how several States are Opposed to President Donald Trump's Commission on Election Integrity, because they want to Rig their Elections, and this is Why there are Many Americans who want America to be a Constitutional Republic and a Constitutional Democracy.
Abe , July 16, 2017 at 1:32 pmI just read this article in the Washington Monthly, and wish to read informed comments about this issue. There are suggestions that organized crime from Russian was heavily involved. This is a complicated mess of money, greed, etc.
http://washingtonmonthly.com/2017/07/10/trumps-inner-circle-met-with-no-ordinary-russian-lawyer/
David , July 16, 2017 at 3:22 pmYes, very interesting read. By all means, examine the article, which concludes:
"So, let's please stay focused on why this matters.
"And why was Preet Bharara fired again?"
Israeli banks have helped launder money for Russian oligarchs, while large-scale fraudulent industries have been allowed to flourish in Israel.
A May 2009 diplomatic cable by the US ambassador to Israel warned that "many Russian oligarchs of Jewish origin and Jewish members of organized crime groups have received Israeli citizenship, or at least maintain residences in the country."
The United States estimated at the time that Russian crime groups had "laundered as much as $10 billion through Israeli holdings."
In 2009, then Manhattan U.S. Attorney Preet Bharara charged 17 managers and employees of the Conference on Jewish Material Claims for defrauding Germany 42.5 million dollars by creating thousands of false benefit applications for people who had not suffered in the Holocaust.
The scam operated by creating phony applications with false birth dates and invented histories of persecution to process compensation claims. In some cases the recipients were born after World War II and at least one person was not even Jewish.
Among those charged was Semyon Domnitser, a former director of the conference. Many of the applicants were recruited from Brooklyn's Russian community. All those charged hail from Brooklyn.
When a phony applicant got a check, the scammers were given a cut, Bharara said. The fraud which has been going on for 16 years was related to the 400 million dollars which Germany pays out each year to Holocaust survivors.
Later, in November 2015, Bharara's office charged three Israeli men in a 23-count indictment that alleged that they ran a extensive computer hacking and fraud scheme that targeted JPMorgan Chase, The Wall Street Journal, and ten other companies.
According to prosecutors, the Israeli's operation generated "hundreds of millions of dollars of illegal profit" and exposed the personal information of more than 100 million people.
Why was Bharara fired?
Any real investigation of Russia-Gate will draw international attention towards Russian Jewish corruption in the FIRE (Finance, Insurance, and Real Estate) sectors, and lead back to Israel.
Ain't gonna happen.
David , July 16, 2017 at 3:33 pmRemember Milly that essentially one of the first things Trump did when he came into office was fire Preet, and just days before the long awaited trial. Then, Jeff Sessions settled the case for 6 million without any testimony on a 230 million dollar case, days after. Spectacular and brazen, and structured to hide the identities of which properties were bought by which investors. Hmmmm.
Abe , July 16, 2017 at 4:37 pmBy the way Milly, great summary article you have linked and one that everyone who is championing the Nekrasov film should read.
The "great" article was not written by a journalist. It's an opinion piece written by Martin Longman, a blogger and Democratic Party political consultant.
From 2012 to 2013, Longman worked for Democracy for America (DFA) a political action committee, headquartered in South Burlington, Vermont, founded by former Democratic National Committee Chairman Howard Dean.
Since March 2014, political animal Longman has managed the The Washington Monthly website and online magazine.
Although it claims to be "an independent voice", the Washington Monthly is funded by the Ford Foundation, JP Morgan Chase Foundation, and well-heeled corporate entities http://washingtonmonthly.com/about/
Longman's credentials as a "progressive" alarmist are well established. Since 2005, he has been the publisher of Booman Tribune. Longman admits that BooMan is related to the 'bogey man' (aka, bogy man, boogeyman), an evil imaginary character who harms children.
Vladimir Putin is the latest bogey man of the Democratic Party and its equally pro-Israel "opposition".
Neither party wants the conversation to involve Jewish Russian organized crime, because that leads to Israel and the pro-Israel AIPAC lobby that funds both the Republican and Democratic parties.
Very interesting.
|
|
|
Dec 07, 2017 | www.unz.com
edNels , December 7, 2017 at 3:45 am GMT
@ChuckOrloskiI read her books,
To others: Even FB may gain some historical wisdom by reading Amy K.'s description of the Chicago School of Economics and how Milton Friedman's economic "Shock Doctrine" was brought to S. America, Russia, Iraq, and other awe struck nations vulnerable to the greedy Vampire Squid's insatiable appetite for money and unchallenged world power.
you must mean Naomi Klein, who wrote "Shock Doctrine". She's great and looks good too. Recently some British black woman interviewed her and she was nicely poised and patient with the Dodo. Milton Friedman, whata guy, is he any relative of Thomas (alla'akbar ) Friedmin? (whata other f'n guy too.
I think Vampire Squid was a phrase that Taibbi started about Wall St. But haven't seen much of him lately.
|
|
|
Apr 05, 2015 | Bloomberg View
Whenever buyers and sellers get together, opportunities to fleece the other guy arise. The history of markets is, in part, the history of lying, cheating and stealing -- and of the effort down the years to fight commercial crime.
In fact, the evolution of the modern economy owes more than you might think to these outlaws. That's the theme of "Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance" by Ian Klaus. It's a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism.
And what a cast of characters. Thomas Cochrane is my own favorite. (This is partly because he was the model for Jack Aubrey in Patrick O'Brian's "Master and Commander" novels, which I've been reading and rereading for decades. Presumably Klaus isn't a fan: He doesn't note the connection.)
Cochrane was an aristocrat and naval hero. At the height of his fame in 1814 he was put on trial for fraud. An associate had spread false rumors of Napoleon's death, driving up the price of British government debt, and allowing Cochrane to avoid heavy losses on his investments. Cochrane complained (with good reason, in fact) that the trial was rigged, but he was found guilty and sent to prison.
The story is fascinating in its own right, and the book points to its larger meaning. Cochrane, in a way, was convicted of conduct unbecoming a man of his position. Playing the markets, let alone cheating, was something a man of his status wasn't supposed to do. Trust resided in social standing.
As the turbulent century went on, capitalism moved its frontier outward in every sense: It found new opportunities overseas; financial innovation accelerated; and buyers and sellers were ever more likely to be strangers, operating at a distance through intermediaries. These new kinds of transaction required new ways of securing trust. Social status diminished as a guarantee of good faith. In its place came, first, reputation (based on an established record of honest dealing) then verification (based on public and private records that vouched for the parties' honesty).
Successive scams and scandals pushed this evolution of trust along. Gregor MacGregor and the mythical South American colony of Poyais ("the quintessential fraud of Britain's first modern investment bubble," Klaus calls it); Beaumont Smith and an exchequer bill forging operation of remarkable scope and duration; Walter Watts, insurance clerk, theatrical entrepreneur and fraudster; Harry Marks, journalist, newspaper proprietor and puffer of worthless stocks. On and on, these notorious figures altered the way the public thought about commercial trust, and spurred the changes that enabled the public to keep on trusting nonetheless.
The stories are absorbing and the larger theme is important: "Forging Capitalism" is a fine book and I recommend it. But I have a couple of criticisms. The project presumably began as an academic dissertation, and especially at the start, before Klaus starts telling the stories, the academic gravity is crushing.
Trust, to be simple with our definition, is an expectation of behavior built upon norms and cultural habits. It is often dependent upon a shared set of ethics or values. It is also a process orchestrated through communities and institutions. In this sense, it is a cultural event and thus a historical phenomenon.
No doubt, but after a first paragraph like that you aren't expecting a page-turner. Trust me, it gets better. When he applies himself, Klaus can write. Describing the messenger who brought the false news of Napoleon's death, he says:
Removed from the dark of the street, the man could be seen by the light of two candles. He looked, a witness would later testify, "like a stranger of some importance." A German sealskin cap, festooned with gold fringes, covered his head. A gray coat covered his red uniform, upon which hung a star Neighbors and residents of the inn stirred and peered in as the visitor penned a note.
Tell me more.
My other objection is to the book's repeated suggestion that Adam Smith and other classical proponents of market economics naively underestimated the human propensity to deceive and over-credited the market's ability to promote good behavior. Klaus doesn't examine their claims at length or directly, but often says things such as:
The sociability in which Adam Smith had placed his hopes for harnessing self-interest was not a sufficient safeguard in the sometimes criminal capitalism of the ruthless free market.
Of course it wasn't. Smith didn't believe that the market's civilizing tendencies, together with humans' instinct for cooperation, were a sufficient safeguard against fraud or breach of contract or other commercial wrongs. He was nothing if not realistic about human nature. And by the way, many of the subtle adaptations to the shifting risk of fraud that Klaus describes were private undertakings, not government measures. Far from being surprised by them, Smith would have expected their development.
Nonetheless, Klaus is right: Give the markets' ubiquitous and ingenious criminals their due. They helped build modern capitalism, and they aren't going away. Just ask Bernie Madoff.
To contact the author on this story: Clive Crook at [email protected]
|
|
|
Nov 30, 2017 | www.unz.com
Anon , Disclaimer November 29, 2017 at 3:02 am GMT
The people who worked in int'l finance in the 90s (representing countries to the WB and IMF) knew about the criminal callousness of these institutions when pushing 'austerity' or 'reform' policies. Local elites sometimes were complacent and profited (those privatizations! those newly opened markets!), sometimes resisted, but the US and the multilateral system –financial or otherwise– are ruthless and very hard to resist.anon , Disclaimer November 29, 2017 at 4:51 am GMTMany countries suffered, not because they were Russian or Brazilian or Mexican, but because the opportunity for gain was there.
There's some common ground between the reds and whites in that the reds tapped into nationalist sentiments, hence the wars of national liberation around the world being supported by the communists: Korea, Vietnam, insurgencies in Latin America, Africa, etc. The script has flipped with the western countries now being the 'godless' ones who are trying to destroy religion, the family and traditional ways of life. The 1% were horrified that there was an ideology out there that advocated taking their loot away so they used all their resources in combatting it, even being willing to take the world to the brink of nuclear Armageddon in doing so. They'd take the world down with them rather than lose their positions of power and money. Now that the ideology is no longer there it's just back to the business of robbing everyone weaker than them. All the hysteria about Putin is simply that he's built up the Russian state to where they can resist and that he's not a fellow slaveholder like them.peterAUS , November 29, 2017 at 6:57 am GMTThe intervention in Syria has unhinged parts of the west where they thought they could rob and kill anywhere they pleased but now have been successfully resisted. Political systems come and go but the people have endured for the past thousand years, something the fat cats of the west are trying to destroy to enlarge their slave plantation.
@anonCyrano , November 29, 2017 at 8:25 am GMThe's not a fellow slaveholder like them .
Quick Google:
Inequality in Russia" With the richest 10% owning 87% of all the country's wealth, Russia is rated the most unequal of the world's major economies. ."
" Russia has greater economic disparity than any other major global power. In 2016, Credit Suisse's Global Wealth Report found that the wealthiest 10% of people in Russia controlled 89% of the country's wealth ..
"The World Wealth and Inequality project's latest white-paper, co-authored by Thomas "Capital in the 21st Century" Piketty, painstaking pieces together fragmentary data-sources to build up a detailed picture of wealth inequality in Russia in the pre-revolutionary period; during phases of the Soviet era; on the eve of the collapse of the USSR; and ever since.
The headline findings: official Russian estimates drastically understate national inequality; Russia is as unequal as the USA or even moreso; Russian inequality is more intense than the inequality in other post-Soviet states and in post-Deng China.
This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day. We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.
From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016 [Filip Novokmet, Thomas Piketty, Gabriel Zucman/World Wealth and Income Database]"
Etc
@anonKiza , November 29, 2017 at 12:30 pm GMTPeople used to stage revolutions in order to bring communism to their countries. Plenty of examples for that: Russia, China, Cuba and many others. Of course, those people were deluded, right? Who would want to bring a system that preaches economic equality? It must be someone who is out of their mind. Has there ever been a capitalist revolution where someone took up arms trying to bring capitalism to their country? Must be because it's such a humane and desirable system. Also, a lot of people think that Islam is a backward religion. Really? Then how come it tolerates socialism (communism), better than Christianity ever did? Libya, Iraq, Syria, Afghanistan they were all socialist at some point. That's why the greatest democracy set their sights on them to destroy them. Because, you see, by their calculations, no matter how extremist and backward the Islam gets, it's still more progressive than socialism or communism. Helluva math there. The game has always been about preserving capitalism, and not the most benign version either. Which is too bad, because capitalism has been known to tolerate dictatorship, fascism, Nazism, slavery – pretty much the ugliest forms of government the sick human mind can come up with, but it can't tolerate little bit of socialism. Because you see, socialism is worse than any of those lovely political systems. Democracy (capitalism) is too pure for that, such a fragile and delicate thing that it is.
I am surprised Sweden hasn't been bombed yet, for their flirting with socialism, but the way the things are going over there, they don't have to be bombed. They did themselves in by following someone's stupid ideas about multiculturalism – which of course is also a form of socialism – racial one, instead the real deal – the economic socialism that the greatest democracy of them all is so afraid of.
When the Serbians in different parts of Yugoslavia started being attacked by the West, I was constantly pointing out that in recent times, since WW1, an attack on Serbia has been a kind of introduction to an attack on Russia. In other words, I had no doubt that Russia was next.yeah , November 29, 2017 at 3:31 pm GMTBut, there is one huge difference between Serbia and Russia. Whilst the Serbians killed very few of those Western Zionist military mercenaries who were killing Serbians directly or using their Croat, Muslim and Albanian proxies, if attacked the Russian military could kill hundreds of thousands of the Western mercenaries. This is why whilst the war on Serbia was real and bloody only on Serbians and the Bosnian Muslim proxies, the war on Russia would be totally disastrous for the Anglozionist Empire. This is the only reason a shooting war on Russia has not started already.
For my money, Saker emphasises the supposed friendliness of the Western people towards Russia too much. It is not the Western people who want to attack Russia then the Western Anglozionist elite, but the Western people really do not care, as long as it is not the blood of their progeny and their own money paying for bringing Russia to heel.
And if Russia is destroyed, just like Ukraine, then there could be some lucrative jobs when the Western Zio-elite starts dismembering the Russian corpse. And well paying jobs are in great demand in the bankrupt West. The unwritten contract that the Western people have with their Anglozionist elite says: find a way to destroy Russia without a global nuclear war, cheaply, without serious dying on our side and throw us a few bones and we will gladly hybernate our moral conscience.
@QuartermasterAvery , November 29, 2017 at 3:59 pm GMTWell, what evidence have you for asserting that Putin is a thug? You saw through the media's false reporting earlier as you admit, so how come you again swallow the load of marbles that they dish out?
And while Putin may or may not be feared by "near abroad" he certainly is feared by those who seek total dominance of the planet. The thing is, he is not an easy pushover and that is what is behind the thug claims. Many thinking people admire his intellect, statesmanship, and skill in dealing with major problems of our times. The media also hates him because he shows up the western leaders for the clowns that they are.
A principled US Government would have dealt very differently with Russia and Putin. There is no inherent conflict of interest with Russia once global dominance is discarded as the main policy objective.
@Quartermasterdisturbed_robot , November 29, 2017 at 4:20 pm GMT{The only people that fear Putin is the near abroad, .}
Sure, if you say so, Bub.
Texas* is, of course, 'near aboard' .[Russia has begun testing of its new intercontinental ballistic missile (ICBM), the RS-28 Sarmat. Sarmat can carry a payload of up to ten tons of nukes. The missile system is set to enter service in 2018.
The RS-28 Sarmat is the first entirely new Russian ICBM in decades. The heavyweight missile weighs 100 tons and can boost 10 tons. Russia claims the Sarmat can lift 10 heavyweight warheads, or 16 lighter ones, and Russian state media has described it as being able to wipe out an area the size of Texas or France.]_______________________
*
[Russia's New ICBM Could "Wipe Out Texas"]http://www.popularmechanics.com/military/weapons/a23547/russias-new-icbm-could-wipe-out-texas/
@WorkingClassAnonymous , Disclaimer November 29, 2017 at 4:52 pm GMTWow, this is the most refreshing and clear minded comment I've seen here in a while. Nice job WorkingClass, you've managed to keep your mind clear and not buy into the BS. You've given me some hope Thank you.
@peterAUSL.K , November 29, 2017 at 6:35 pm GMTInequality in Russia
The supposed leaders of the West are busy trying to replace or at the very least water down their own populations with a totally different set of people from far away. Obviously these supposedly democratic leaders loathe what are supposed to be their own people but rather see all those below them as just so many replaceable units of labor, the mark of a "slaveholder". Putin has helped his people immensely. Life expectancies had plummeted into the 50′s and that's now been improved greatly as well as living standards. He's popular because he's done much for the people he identifies with, unlike Western leaders who hold their noses when anywhere near the citizenry. If the Russians like him then they must not be as worried about some issues as critics outside the country appear to be.
Very interesting interview with Professor McCoy:WorkingClass , November 29, 2017 at 7:03 pm GMTOn Contact: Decline of the American empire with Alfred McCoy
@disturbed_robotAedib , November 29, 2017 at 7:08 pm GMTThanks for the kind words.
@James N. Kennettgwynedd1 , November 29, 2017 at 7:22 pm GMTIt is hard to find people in the West who "hate the Russian people themselves"; but in place of hatred there is definitely fear – fear of Russia's military strength.
Disagree. The enormous propagandistic effort to demonize Russia in the West, not only reveals fear. It also reveals hate, at least on most of the elites. Most people are indifferent toward Russia but elites definitively have fear to the bear. You can test some people by simply naming "Russia" and you will see on their eyes a quite irrationala mix of hate and fear. I think this is result of an Orwellian propaganda effort aimed at injecting fear to "Eurasia".
This fear is exaggerated by the US military-industrial complex for its own purposes;
Agreed.
@WorkingClassgwynedd1 , November 29, 2017 at 7:30 pm GMTGiven any two races or culture , what they are and what I think of them hardly matters. However pitted against each other it will cultivate and create good conditions for the scum of both of them and embroil the rest in the conflict. It is an against of chaos for a hostile order.
@QuartermasterCyrano , November 29, 2017 at 7:41 pm GMT"Why should the west try to destroy Russia? They're doing a great job of it all by themselves"
How many times have you visited Russia?
@Philip OwenAB_Anonymous , November 29, 2017 at 8:12 pm GMTRight. Those were capitalist revolutions. You are bang on. Capitalism is one of the most tolerant systems of all kinds of extremism, as I already mentioned. Capitalism has been known to tolerate monarchy, fascism, Nazism, various forms of dictatorships, slavery, pretty much everything. But they draw the line at tolerating socialism, like it's the worst extremism they have ever tolerated. My point is, capitalism is pretty robust system, it's not some delicate beauty that will fall apart if it comes in touch with socialism. Democracy is only a window dressing, it has never been about democracy, it has always been about capitalism.
There's nothing easier nowadays than becoming a Kremlin (or any other kind of) Troll. Just start talking about things as they are and you're half way through. Keep talking that way a bit longer, and you'll forever become another precious source of income for the army of no-talent crooks with unlimited rights and zero oversee from those for whom they officially work. These guys are simply used to build their entire careers and financial well-beings by adjusting reality to their needs. They've been doing it for decades. Why not, as long as the true bosses are happy ? Why not, when the MSM will make population to swallow anything, no matter how idiotic and illogical it is ?
|
|
|
Nov 30, 2017 | www.unz.com
Anon , Disclaimer November 29, 2017 at 3:02 am GMT
The people who worked in int'l finance in the 90s (representing countries to the WB and IMF) knew about the criminal callousness of these institutions when pushing 'austerity' or 'reform' policies. Local elites sometimes were complacent and profited (those privatizations! those newly opened markets!), sometimes resisted, but the US and the multilateral system –financial or otherwise– are ruthless and very hard to resist.anon , Disclaimer November 29, 2017 at 4:51 am GMTMany countries suffered, not because they were Russian or Brazilian or Mexican, but because the opportunity for gain was there.
There's some common ground between the reds and whites in that the reds tapped into nationalist sentiments, hence the wars of national liberation around the world being supported by the communists: Korea, Vietnam, insurgencies in Latin America, Africa, etc. The script has flipped with the western countries now being the 'godless' ones who are trying to destroy religion, the family and traditional ways of life. The 1% were horrified that there was an ideology out there that advocated taking their loot away so they used all their resources in combatting it, even being willing to take the world to the brink of nuclear Armageddon in doing so. They'd take the world down with them rather than lose their positions of power and money. Now that the ideology is no longer there it's just back to the business of robbing everyone weaker than them. All the hysteria about Putin is simply that he's built up the Russian state to where they can resist and that he's not a fellow slaveholder like them.peterAUS , November 29, 2017 at 6:57 am GMTThe intervention in Syria has unhinged parts of the west where they thought they could rob and kill anywhere they pleased but now have been successfully resisted. Political systems come and go but the people have endured for the past thousand years, something the fat cats of the west are trying to destroy to enlarge their slave plantation.
@anonCyrano , November 29, 2017 at 8:25 am GMThe's not a fellow slaveholder like them .
Quick Google:
Inequality in Russia" With the richest 10% owning 87% of all the country's wealth, Russia is rated the most unequal of the world's major economies. ."
" Russia has greater economic disparity than any other major global power. In 2016, Credit Suisse's Global Wealth Report found that the wealthiest 10% of people in Russia controlled 89% of the country's wealth ..
"The World Wealth and Inequality project's latest white-paper, co-authored by Thomas "Capital in the 21st Century" Piketty, painstaking pieces together fragmentary data-sources to build up a detailed picture of wealth inequality in Russia in the pre-revolutionary period; during phases of the Soviet era; on the eve of the collapse of the USSR; and ever since.
The headline findings: official Russian estimates drastically understate national inequality; Russia is as unequal as the USA or even moreso; Russian inequality is more intense than the inequality in other post-Soviet states and in post-Deng China.
This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day. We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.
From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016 [Filip Novokmet, Thomas Piketty, Gabriel Zucman/World Wealth and Income Database]"
Etc
@anonKiza , November 29, 2017 at 12:30 pm GMTPeople used to stage revolutions in order to bring communism to their countries. Plenty of examples for that: Russia, China, Cuba and many others. Of course, those people were deluded, right? Who would want to bring a system that preaches economic equality? It must be someone who is out of their mind. Has there ever been a capitalist revolution where someone took up arms trying to bring capitalism to their country? Must be because it's such a humane and desirable system. Also, a lot of people think that Islam is a backward religion. Really? Then how come it tolerates socialism (communism), better than Christianity ever did? Libya, Iraq, Syria, Afghanistan they were all socialist at some point. That's why the greatest democracy set their sights on them to destroy them. Because, you see, by their calculations, no matter how extremist and backward the Islam gets, it's still more progressive than socialism or communism. Helluva math there. The game has always been about preserving capitalism, and not the most benign version either. Which is too bad, because capitalism has been known to tolerate dictatorship, fascism, Nazism, slavery – pretty much the ugliest forms of government the sick human mind can come up with, but it can't tolerate little bit of socialism. Because you see, socialism is worse than any of those lovely political systems. Democracy (capitalism) is too pure for that, such a fragile and delicate thing that it is.
I am surprised Sweden hasn't been bombed yet, for their flirting with socialism, but the way the things are going over there, they don't have to be bombed. They did themselves in by following someone's stupid ideas about multiculturalism – which of course is also a form of socialism – racial one, instead the real deal – the economic socialism that the greatest democracy of them all is so afraid of.
When the Serbians in different parts of Yugoslavia started being attacked by the West, I was constantly pointing out that in recent times, since WW1, an attack on Serbia has been a kind of introduction to an attack on Russia. In other words, I had no doubt that Russia was next.yeah , November 29, 2017 at 3:31 pm GMTBut, there is one huge difference between Serbia and Russia. Whilst the Serbians killed very few of those Western Zionist military mercenaries who were killing Serbians directly or using their Croat, Muslim and Albanian proxies, if attacked the Russian military could kill hundreds of thousands of the Western mercenaries. This is why whilst the war on Serbia was real and bloody only on Serbians and the Bosnian Muslim proxies, the war on Russia would be totally disastrous for the Anglozionist Empire. This is the only reason a shooting war on Russia has not started already.
For my money, Saker emphasises the supposed friendliness of the Western people towards Russia too much. It is not the Western people who want to attack Russia then the Western Anglozionist elite, but the Western people really do not care, as long as it is not the blood of their progeny and their own money paying for bringing Russia to heel.
And if Russia is destroyed, just like Ukraine, then there could be some lucrative jobs when the Western Zio-elite starts dismembering the Russian corpse. And well paying jobs are in great demand in the bankrupt West. The unwritten contract that the Western people have with their Anglozionist elite says: find a way to destroy Russia without a global nuclear war, cheaply, without serious dying on our side and throw us a few bones and we will gladly hybernate our moral conscience.
@QuartermasterAvery , November 29, 2017 at 3:59 pm GMTWell, what evidence have you for asserting that Putin is a thug? You saw through the media's false reporting earlier as you admit, so how come you again swallow the load of marbles that they dish out?
And while Putin may or may not be feared by "near abroad" he certainly is feared by those who seek total dominance of the planet. The thing is, he is not an easy pushover and that is what is behind the thug claims. Many thinking people admire his intellect, statesmanship, and skill in dealing with major problems of our times. The media also hates him because he shows up the western leaders for the clowns that they are.
A principled US Government would have dealt very differently with Russia and Putin. There is no inherent conflict of interest with Russia once global dominance is discarded as the main policy objective.
@Quartermasterdisturbed_robot , November 29, 2017 at 4:20 pm GMT{The only people that fear Putin is the near abroad, .}
Sure, if you say so, Bub.
Texas* is, of course, 'near aboard' .[Russia has begun testing of its new intercontinental ballistic missile (ICBM), the RS-28 Sarmat. Sarmat can carry a payload of up to ten tons of nukes. The missile system is set to enter service in 2018.
The RS-28 Sarmat is the first entirely new Russian ICBM in decades. The heavyweight missile weighs 100 tons and can boost 10 tons. Russia claims the Sarmat can lift 10 heavyweight warheads, or 16 lighter ones, and Russian state media has described it as being able to wipe out an area the size of Texas or France.]_______________________
*
[Russia's New ICBM Could "Wipe Out Texas"]http://www.popularmechanics.com/military/weapons/a23547/russias-new-icbm-could-wipe-out-texas/
@WorkingClassAnonymous , Disclaimer November 29, 2017 at 4:52 pm GMTWow, this is the most refreshing and clear minded comment I've seen here in a while. Nice job WorkingClass, you've managed to keep your mind clear and not buy into the BS. You've given me some hope Thank you.
@peterAUSL.K , November 29, 2017 at 6:35 pm GMTInequality in Russia
The supposed leaders of the West are busy trying to replace or at the very least water down their own populations with a totally different set of people from far away. Obviously these supposedly democratic leaders loathe what are supposed to be their own people but rather see all those below them as just so many replaceable units of labor, the mark of a "slaveholder". Putin has helped his people immensely. Life expectancies had plummeted into the 50′s and that's now been improved greatly as well as living standards. He's popular because he's done much for the people he identifies with, unlike Western leaders who hold their noses when anywhere near the citizenry. If the Russians like him then they must not be as worried about some issues as critics outside the country appear to be.
Very interesting interview with Professor McCoy:WorkingClass , November 29, 2017 at 7:03 pm GMTOn Contact: Decline of the American empire with Alfred McCoy
@disturbed_robotAedib , November 29, 2017 at 7:08 pm GMTThanks for the kind words.
@James N. Kennettgwynedd1 , November 29, 2017 at 7:22 pm GMTIt is hard to find people in the West who "hate the Russian people themselves"; but in place of hatred there is definitely fear – fear of Russia's military strength.
Disagree. The enormous propagandistic effort to demonize Russia in the West, not only reveals fear. It also reveals hate, at least on most of the elites. Most people are indifferent toward Russia but elites definitively have fear to the bear. You can test some people by simply naming "Russia" and you will see on their eyes a quite irrationala mix of hate and fear. I think this is result of an Orwellian propaganda effort aimed at injecting fear to "Eurasia".
This fear is exaggerated by the US military-industrial complex for its own purposes;
Agreed.
@WorkingClassgwynedd1 , November 29, 2017 at 7:30 pm GMTGiven any two races or culture , what they are and what I think of them hardly matters. However pitted against each other it will cultivate and create good conditions for the scum of both of them and embroil the rest in the conflict. It is an against of chaos for a hostile order.
@QuartermasterCyrano , November 29, 2017 at 7:41 pm GMT"Why should the west try to destroy Russia? They're doing a great job of it all by themselves"
How many times have you visited Russia?
@Philip OwenAB_Anonymous , November 29, 2017 at 8:12 pm GMTRight. Those were capitalist revolutions. You are bang on. Capitalism is one of the most tolerant systems of all kinds of extremism, as I already mentioned. Capitalism has been known to tolerate monarchy, fascism, Nazism, various forms of dictatorships, slavery, pretty much everything. But they draw the line at tolerating socialism, like it's the worst extremism they have ever tolerated. My point is, capitalism is pretty robust system, it's not some delicate beauty that will fall apart if it comes in touch with socialism. Democracy is only a window dressing, it has never been about democracy, it has always been about capitalism.
There's nothing easier nowadays than becoming a Kremlin (or any other kind of) Troll. Just start talking about things as they are and you're half way through. Keep talking that way a bit longer, and you'll forever become another precious source of income for the army of no-talent crooks with unlimited rights and zero oversee from those for whom they officially work. These guys are simply used to build their entire careers and financial well-beings by adjusting reality to their needs. They've been doing it for decades. Why not, as long as the true bosses are happy ? Why not, when the MSM will make population to swallow anything, no matter how idiotic and illogical it is ?
|
|
|
Nov 29, 2017 | www.unz.com
The Soviet authorities had long listed me, and my entire family, as dangerous anti-Soviet activists and I, therefore, could not travel to Russia until the fall of Communism in 1991 when I immediately caught the first available flight and got to Moscow while the barricades built against the GKChP coup were still standing. Truly, by this fateful month of August 1991, I was a perfect anti-Soviet activist and an anti-Communist hardliner. I even took a photo of myself standing next to the collapsed statue of Felix Derzhinsky (the founder of the ChK – the first Soviet Secret police) with my boot pressed on his iron throat. That day I felt that my victory was total. It was also short-lived.
Instead of bringing the long-suffering Russian people freedom, peace, and prosperity, the end of Communism in Russia only brought chaos, poverty, violence, and abject exploitation by the worst class of scum the defunct Soviet system had produced. I was horrified. Unlike so many other anti-Soviet activists who were also Russophobes, I never conflated my people and the regime which oppressed them. So, while I rejoiced at the end of one horror, I was also appalled to see that another one had taken its place. Even worse, it was undeniable that the West played an active role in every and all forms of anti-Russian activities, from the total protection of Russian mobsters, on to the support of the Wahabi insurgents in Chechnya, and ending with the financing of a propaganda machine which tried to turn the Russian people into mindless consumers to the presence of western "advisors" (yeah, right!) in all the key ministries. The oligarchs were plundering Russia and causing immeasurable suffering, and the entire West, the so-called "free world" not only did nothing to help but helped all the enemies of Russia with every resource it had. Soon the NATO forces attacked Serbia, a historical ally of Russia, in total violation of the most sacred principles of international law. East Germany was not only reunified but instantly incorporated into West Germany and NATO pushed as far East as possible. I could not pretend that all this could be explained by some fear of the Soviet military or by a reaction to the Communist theory of world revolution. In truth, it became clear to me that the western elites did not hate the Soviet system or ideology, but that they hated Russian people themselves and the culture and civilization which they had created.
By the time the war against the Serbian nation in Croatia, Bosnia and Kosovo broke out, I was in a unique situation: all day long I could read classified UNPROFOR and military reports about what was taking place in that region and, after work, I could read the counter-factual anti-Serbian propaganda the western corporate Ziomedia was spewing out every day. I was horrified to see that literally everything the media was saying was a total lie. Then came the false flags, first in Sarajevo, but later also in Kosovo. My illusions about "Free World" and the "West" were crumbling. Fast.
Fate brought me to Russia in 1993 when I saw the carnage of meted out by the "democratic" Eltsin regime against thousands of Russians in Moscow (many more than what the official press reported). I also saw the Red Flags and Stalin portraits around the parliament building. My disgust by then was total. And when the Eltsin regime decided to bring Dudaev's Chechnia to heel triggering yet another needless bloodbath, that disgust turned into despair. Then came the stolen elections of 1996 and the murder of General Lebed. At that point, I remember thinking "Russia is dead."
So, when the entourage of Eltsin suddenly appointed an unknown nobody to acting President of Russia, I was rather dubious, to put it mildly. The new guy was not a drunk or an arrogant oligarch, but he looked rather unimpressive. He was also ex-KGB which was interesting: on one hand, the KGB had been my lifelong enemy but on the other hand, I knew that the part of the KGB which dealt with foreign intelligence was staffed by the brightest of the brightest and that they had nothing to do with political repression, Gulags and all the rest of the ugly stuff another Directorate of the KGB (the 5th) was tasked with (that department had been abolished in 1989). Putin came from the First Main Directorate of the KGB, the "PGU KGB." Still, my sympathies were more with the (far less political) military intelligence service (GRU) than the very political PGU which, I was quite sure by then, had a thick dossier on my family and me.
Then, two crucial things happened in parallel: both the "Free world" and Putin showed their true faces: the "Free world" as an AngloZionist Empire hell-bent on aggression and oppression, and Vladimir Putin as a real patriot of Russia. In fact, Putin slowly began looking like a hero to me: very gradually, in small incremental steps first, Putin began to turn Russia around, especially in two crucial matters: he was trying to "re-sovereignize" the country (making it truly sovereign and independent again), and he dared the unthinkable: he openly told the Empire that it was not only wrong, it was illegitimate (just read the transcript of Putin's amazing 2007 "Munich Speech").
Putin inspired me to make a dramatic choice: will I stick to my lifelong prejudices or will I let reality prove my lifelong prejudices wrong. The first option was far more comfortable to me, and all my friends would approve. The second one was far trickier, and it would cost me the friendship of many people. But what was the better option for Russia? Could it be that it was the right thing for a "White Russian" to join forces with the ex-KGB officer?
SteveLancs , November 28, 2017 at 5:44 am GMT
NoseytheDuke , November 28, 2017 at 1:07 pm GMTThe transcript for the 2007 speech is here in English, plus questions and answers
https://en.wikisource.org/wiki/Speech_and_the_Following_Discussion_at_the_Munich
@SteveLancsThanks for that Steve, I had intended to search for it but got sidetracked by visits to the vet. What strikes me whenever I read a transcript of Putin's speeches is the precision of his language, it's really impressive. It really isn't fair to compare that to the loose waffle of GWB or the Trumpster but even WJC or BHO who were considered to be commendable orators just lack the fine edge and the gravitas of Putin.
|
|
|
Oct 30, 2017 | marknesop.wordpress.com
saskydisc , October 27, 2017 at 7:21 pm
I am reading Alex Krainer's book on Bill Browder. After introducing himself, he summarized Browser's Red Alert, then spends several chapters giving the context of the 1990s US/IMF rape of Russia via Yeltsin. One thing that he mentions of which I was not aware, is that the IMF forced Russia to allow other former Soviet countries to use, and issue , Rubles, thereby delaying the introduction of national currencies by a year, and giving the other former Soviet countries a motivation to issue huge quantities of currency, and thereby driving hyperinflation. He portrays Jeffrey Sachs as possibly a geopolitical useful idiot of the US and IMF.rkka , October 28, 2017 at 1:08 pmThe IMF refused to give loans to actually assist the transition, but they had no problem giving Yeltsin a 6.7 billion dollar loan for the Chechen war. Banks were given loans "to support the ruble," which were promptly used to bet against same.
At times, the conduct of the Harvard connected personnel in Russia became so blatantly criminal that the FBI investigated and prosecuted. Harvard defended the guilty parties, and even paid a 31 million dollar US fine to settle the matter, and kept the guilty party as faculty.
By the way, Jeff Sachs has come to the conclusion that he was used in exactly that way, that the USG never intended to actually assist Russia's transition, but to make the process as prolonged and destructive as possible.saskydisc , October 28, 2017 at 4:23 pmAnd then there was the US support to Yeltsin's reelection campaign in '96. In January Yeltsin was polling with a 5% approval rating. 55% of Russians thought he should resign rather than seek reelection, mostly because his policies had them dying off by almost a million a year. Funny that. He and the 'Family' seriously considered cancelling the election and ruling by decree.
Instead, they decided to steal it, with the assistance of Western governments & the IMF. In March, President Clinton prevailed on the IMF to release about $10b to the Russian government, which used the funds to support Yeltsin's reelection. Years of wage arrears for government workers were suddenly cleared, as if by magic! Zyuganov was buried under a tsunami of stories that he intended to bring back War Communism and the Purges from both State and Oligarch-owned media, while getting no coverage of his actual positions from same. Zyuganov adhered to the legal limits on campaign spending, while Yeltsin exceeded them by a couple of orders of magnitude, with no consequence. And to top it all off, there was flagrant use of 'administrative resource' and outright voter fraud. Mr. Michael Meadowcroft, the leader of the OSCE election monitoring team, told The Exile of the heavy pressure he got from Western governments to minimize his reporting of how the Yeltsin reelection team was abusing Russian political processes in every possible way to ensure his reelection and the continuation of the policies that had Russians dying off by almost a million a year.
And so in '96 Western media celebrated the 54% majority vote for the guy with the 5% approval rating as 'A Triumph of Democracy!'
In 2012 they called it 'Massive Fraud!' when the guy with the 66% approval rating got 63% of the vote.
The only possible conclusion from this is that Western government care nothing for what Russians think, or how, or even whether, they live, only that the Russian government submit.
Their big problem for Western governments is that Russian voters now understand this, which puts them beyond the influence of the Anglosphere Foreign Policy Elite & Punditocracy.
This drives the AFPE&P up the wall, for they are obsessed with having 'Leverage' and 'Influence' and cannot stand having none.
And so they bleat about a miniscule Facebook ad buy.
The desperation is in full display. One interesting thing that I notice is that the apolitical people are not aware, and even forget the propaganda shortly after being subjected to it. While this has the downside of making them uninterested in the facts, it does make them indifferent to the propaganda as well. Should they be dragooned into fighting, they will fight to survive, rather than to conquer.saskydisc , October 28, 2017 at 4:40 pmAs such, the powers that still are, are out of options. Winning a battle such as a colour revolution is more expensive to their aims in the long run than not initiating one, yet they need to steal other countries' wealth to roll over their expense accounts. I need to work up my cynicism and invest in popcorn.
Another nice little detail that Krainer includes is the sending of large sums of mint US banknotes to Russian banks involved in money laundering for gangs. This was done by a bank owned by Browser's "angel" investor, Edmond Safra, and he lists how the regulators went out of their way to avoid their legal responsibilities in that matter. He also spends some time on Browder's confession that his (Browder's) pretensions of being in opposition to Soros outfit Renaissance Capital was a ruse, as Browder admits to having conducted much business with same.marknesop , October 29, 2017 at 12:48 pmHe also spends some pages looking at Browder's tax evasion through transfer pricing (selling cheaply abroad, to a tax haven) using avionics outfit AVISMA.
Finally, some humour: when Browder got served his summons, he started complaining that he left the US due to prosecution of his family. Under examination, it turns out that his immediate family included professors at prestigious US universities, long after McCarthy, but long before he opted for UK citizenship.
Yes, I did a piece on that long ago , probably before your time here. It included some very useful links, some of which probably still work – perhaps the most eye-popping being Robert Friedman's "The Money Plane", from New York Magazine . Check it out; I think you'll find it enlightening.saskydisc , October 29, 2017 at 2:32 pmI did not know that Renaissance Capital was connected to Soros, though; that's news to me, and I guess you can always learn something.
Will check it out. Krainer does cite one of your pieces, in a different matter.saskydisc , October 29, 2017 at 2:44 pmYou go into more detail, e.g. that the purpose of the shell companies was to take ownership of and manipulate Gazprom et alia. You also have more detail on Safra -- Krainer did not mention his death, and I don't recall him mentioning Mr North.marknesop , October 29, 2017 at 9:06 amAnd there is considerable anecdotal confirmation – which I realize is not evidence – that Zyuganov actually won the election, but was so stupefied and frightened at the prospect of leading such a restive country that he allowed the election to be stolen from him without opposing it. If true, he has never spoken of it himself to my knowledge. But others have.Pro-Freedom , October 29, 2017 at 9:08 amFor that matter, there likely wouldn't not have been a Putin presidency.kirill , October 29, 2017 at 10:30 amZyuganov was 5th column comprador who made sure the Communist Party did not evolve and thereby ensuring its long term oblivion.Matt , October 29, 2017 at 10:45 amPer Dugin, that technically qualifies him as a 6th columnist:http://katehon.com/1318-sixth-column.html
This structure sure is stable, kek.
|
|
|
Oct 20, 2017 | www.counterpunch.org
Socialism a century ago seemed to be the wave of the future. There were various schools of socialism, but the common ideal was to guarantee support for basic needs, and for state ownership to free society from landlords, predatory banking and monopolies. In the West these hopes are now much further away than they seemed in 1917. Land and natural resources, basic infrastructure monopolies, health care and pensions have been increasingly privatized and financialized.Instead of Germany and other advanced industrial nations leading the way as expected, Russia's October 1917 Revolution made the greatest leap. But the failures of Stalinism became an argument against Marxism – guilt-by-association with Soviet bureaucracy. European parties calling themselves socialist or "labour" since the 1980s have supported neoliberal policies that are the opposite of socialist policy. Russia itself has chosen neoliberalism.
Few socialist parties or theorists have dealt with the rise of the Finance, Insurance and Real Estate (FIRE) sector that now accounts for most increase in wealth. Instead of evolving into socialism, Western capitalism is being overcome by predatory finance and rent extraction imposing debt deflation and austerity on industry as well as on labor.
Failure of Western economies to recover from the 2008 crisis is leading to a revival of Marxist advocacy. The alternative to socialist reform is stagnation and a relapse into neofeudal financial and monopoly privileges.
Socialism flowered in the 19 th century as a program to reform capitalism by raising labor's status and living standards, with a widening range of public services and subsidies to make economies more efficient. Reformers hoped to promote this evolution by extending voting rights to the working population at large.
Ricardo's discussion of land rent led early industrial capitalists to oppose Europe's hereditary landlord class. But despite democratic political reform, the world has un-taxed land rent and is still grappling with the problem of how to keep housing affordable instead of siphoning off rent to a landlord class – more recently transmuted into mortgage interest paid to banks by owners who pledge the rental value for loans. Most bank lending today is for real estate mortgages. The effect is to bid up land prices toward the point where the entire rental value is paid as interest. This threatens to be a problem for socialist China as well as for capitalist economies.
Landlords, banks and the cost of living
The classical economists sought to make their nations more competitive by keeping down the price of labor so as to undersell competitors. The main cost of living was food; today it is housing. Housing and food prices are determined not by the material costs of production, but by land rent – the rising market price for land.
In the era of the French Physiocrats, Adam Smith, David Ricardo and John Stuart Mill, this land rent accrued to Europe's hereditary landlord class. Today, the land's rent is paid mainly to bankers – because families need credit to buy a home. Or, if they rent, their landlords use the property rent to pay interest to the banks.
The land issue was central to Russia's October Revolution, as it was for European politics. But the discussion of land rent and taxation has lost much of the clarity (and passion) that guided the 19 th century when it dominated classical political economy, liberal reform, and indeed most early socialist politics.
In 1909/10 Britain experienced a constitutional crisis when the democratically elected House of Commons passed a land tax, only to be overridden by the House of Lords, governed by the old aristocracy. The ensuing political crisis was settled by a rule that the Lords never again could overrule a revenue bill passed by the House of Commons. But that was Britain's last real opportunity to tax away the economic rents of landlords and natural resource owners. The liberal drive to tax the land faltered, and never again would gain serious chance of passage.
The democratization of home ownership during the 20 th century led middle-class voters to oppose property taxes – including taxes on commercial sites and natural resources. Tax policy in general has become pro- rentier and anti-labor – the regressive opposite of 19 th -century liberalism as developed by "Ricardian socialists" such as John Stuart Mill and Henry George. Today's economic individualism has lost the early class consciousness that sought to tax economic rent and socialize banking.
The United States enacted an income tax in 1913, falling mainly on rentier income, not on the working population. Capital gains (the main source of rising wealth today) were taxed at the same rate as other income. But the vested interests campaigned to reverse this spirit, slashing capital gains taxes and making tax policy much more regressive. The result is that today, most wealth is not gained by capital investment for profits. Instead, asset-price gains have been financed by a debt-leveraged inflation of real estate, stock and bond prices.
Many middle-class families owe most of their net worth to rising prices for their homes. But by far the lion's share of the real estate and stock market gains have accrued to just One Percent of the population. And while bank credit has enabled buyers to bid up housing prices, the price has been to siphon off more and more of labor's income to pay mortgage loans or rents. As a result, finance today is what is has been throughout history: the main force polarizing economies between debtors and creditors.
Global oil and mining companies created flags of convenience to make themselves tax-exempt, by pretending to make all their production and distribution profits in tax-free trans-shipping havens such as Liberia and Panama (which use U.S. dollars instead of being real countries with their own currency and tax systems).
The fact that absentee-owned real estate and natural resource extraction are practically free of income taxation shows that democratic political reform has not been a sufficient guarantee of socialist success. Tax rules and public regulation have been captured by the rentiers , dashing the hopes of 19 th -century classical reformers that progressive tax policy would produce the same effect as direct public ownership of the means of production, while leaving "the market" as an individualistic alternative to government regulation or planning.
In practice, planning and resource allocation has passed to the banking and financial sector. Many observers hoped that this would evolve into state planning, or at least work in conjunction with it as in Germany. But liberal "Ricardian socialist" failed, as did German-style "state socialism" publicly financing transportation and other basic infrastructure, pensions and similar "external" costs of living and doing business that industrial employers otherwise would have to bear. Attempts at "half-way" socialism via tax and regulatory policy against monopolies and banking have faltered repeatedly. As long as major economic or political choke points are left in private hands, they will serve s springboards to subvert real reform policies. That is why Marxist policy went beyond these would-be socialist reforms.
To Marx, the historical task of capitalism was to prepare the way for socializing the means of production by clearing away feudalism's legacy: a hereditary landlord class, predatory banking, and the monopolies that financial interests had pried away from governments. The path of least resistance was to start by socializing land and basic infrastructure. This drive to free society from economic overhead in the form of hereditary privilege and unearned income by the "idle rich" was a step toward socialist management, by minimizing rentier costs (" faux frais of production").
Proto-socialist reform in the leading industrial nations
Marx was by no means alone in expecting a widening range of economic activity to be shifted away from the market to the public sector. State socialism (basically, state-sponsored capitalism) subsidized pensions and public health, education and other basic needs so as to save industrial enterprise from having to bear these charges.
In the United States, Simon Patten – the first economics professor at the new Wharton business school at the University of Pennsylvania – defined public infrastructure as a "fourth factor of production" alongside labor, capital and land. The aim of public investment was not to make a profit, but to lower the cost of living and doing business so as to minimize industry's wage and infrastructure bill. Public health, pensions, roads and other transportation, education, research and development were subsidized or provided freely. [1]
The most advanced industrial economies seemed to be evolving toward some kind of socialism. Marx shared a Progressive Era optimism that expected industrial capitalism to evolve in the most logical way, by freeing economies from the landlordship and predatory banking inherited from Europe's feudal era. That was above all the classical reform program of Adam Smith, John Stuart Mill and the intellectual mainstream.
But the aftermath of World War I saw the vested interests mount a Counter-Enlightenment. Banking throughout the Western world find its major market in real estate mortgage lending, natural resource extraction and monopolies – the Anglo-American model, not that of German industrial banking that had seemed to be capitalism's financial future in the late 19 th century.
Since 1980 the Western nations have reversed early optimistic hopes to reform market economies. Instead of the classical dream of taxing away the land rent that had supported Europe's hereditary landed aristocracies, commercial real estate has been made virtually exempt from income taxation. Absentee owners avoid tax by a combination of tax-deductibility for interest payments (as if it is a necessary business expense) and fictitious over-depreciation tax credits that pretend that buildings and properties are losing value even when market prices for their land are soaring.
These tax breaks have made real estate the largest bank customers. The effect has been to financialize property rents into interest payments. Likewise in the industrial sphere, regulatory capture by lobbyists for the major monopolies has disabled public attempts to keep prices in line with the cost of production and prevent fraud by breaking up or regulating monopolies. These too have become major bank clients.
The beginning and end of Russian socialism
Most Marxists expected socialism to emerge first in Germany as the most advanced capitalist economy. After its October 1917 Revolution, Russia seemed to jump ahead, the first nation to free itself from rent and interest charges inherited from feudalism. By taking land, industry and finance into state control, Soviet Russia's October Revolution created an economy without private landlords and bankers. Russian urban planning did not take account of the natural rent-of-location, nor did it charge for the use of money created by the state bank. The state bank created money and credit, so there was no need to rely on a wealthy financial class. And as property owner, the state did not seek to charge land rent or monopoly rent.
By freeing society from the post-feudal rentier class of landlords, bankers and predatory finance, the Soviet regime was much more than a bourgeois revolution. The Revolution's early leaders sought to free wage labor from exploitation by taking industry into the public domain. State companies provided labor with free lunches, education, sports and leisure activity, and modest housing.
Agricultural land tenure was a problem. Given its centralized marketing role, the state could have reallocated land to build up a rural peasantry and helped it invest in modernization. The state could have manipulated crop prices to siphon off agricultural gains, much like Cargill does in the United States. Instead, Stalin's collectivization program waged a war against the kulaks. This political shock led to famine. It was a steep price to pay for avoiding rent was paid to a landlord class or peasantry.
Marx had said nothing about the military dimension of the transition from progressive industrial capitalism to socialism. But Russia's Revolution – like that of China three decades later – showed that the attempt to create a socialist economy had a military dimension that absorbed the lion's share of the economic surplus. Military aggression by a half dozen leading capitalist nations seeking to overthrow the Bolshevik government obliged Russia to adopt War Communism. For over half a century the Soviet Union devoted most of capital to military investment, not provide sufficient housing or consumer goods for its population beyond spreading literacy, education and public health.
Despite this military overhead, the fact that the Soviet Union was free of a rentier class of financiers and absentee landlords should have made the Soviet Union the world's most competitive low-cost economy in theory. In 1945 the United States certainly feared the efficiency of socialist planning. Its diplomats opposed Soviet membership on the ground that state enterprise and pricing would enable such economies to undersell capitalist countries. [2] So socialist countries were kept out of the IMF, World Bank and the planned World Trade Organization, explicitly on the ground that they were free of land rent, natural resource rent, monopoly rent and financial charges.
Capitalist economies are now privatizing and financializing their basic needs and infrastructure. Every activity is being forced into "the market," at prices that need to cover not only the technological costs of production but also interest, ancillary financial fees and pension set-asides. The cost of living and doing business is further privatized as financial interests pry roads, health care, water, communications and other public utilities away from the public sector, while driving housing and commercial real estate deeply into debt.
The Cold War has shown that capitalist countries plan to continue fighting socialist economies, forcing them to militarize in self-defense. The resulting oppressive military overhead is then blamed on socialist bureaucracy and inefficiency.
The collapse of Russian Stalinism
Russia's Revolution ended after 74 years, leaving the Soviet Union so dispirited that it ended in collapse. The contrast between the low living standards of Russian consumers and what seemed to be Western success became increasingly pronounced. In contrast to China's housing construction policy, the Soviet regime insisted that families double up. Clothing and other consumer goods had only drab designs, needlessly suppressing variety. To cap matters, public opposition to Russia's military personnel losses in Afghanistan caused popular resentment.
When the Soviet Union dissolved itself in 1991, its leaders took neoliberal advice from its major adversary, the United States, in hope that this would set it on a capitalist road to prosperity. But turning its economies into viable industrial powers was the last thing U.S. advisors wanted to teach Russia. [3] Their aim was to turn it and its former satellites into raw-materials colonies of Wall Street, the City of London and Frankfurt – victims of capitalism, not rival producers.
Russia has gone to the furthest anti-socialist extreme by adopting a flat tax that fails to distinguish wages and profits of labor and capital from unearned rental income. By also having to pay a value-added tax (VAT) on consumer goods (with no tax on trading in financial assets), labor is taxed much higher than the wealthy.
Most Western "wealth creation" is achieved by debt-leveraged price increases for real estate, stocks and bonds, and by privatizing the public domain. The latter process has gained momentum since the early 1980s in Margaret Thatcher's Britain and Ronald Reagan's America, followed by Third World countries acting under World Bank tutelage. The pretense is that privatization will maximize technological efficiency and prosperity for the economy as a whole.
Following this advice, Russian leaders agreed that the major sources of economic rent – natural resource wealth, real estate and state companies – should be transferred to private owners (often to themselves and associated insiders). The "magic of the marketplace" was supposed to lead the new owners to make the economy more efficient as a byproduct of making money in the quickest way possible.
Each Russian worker got a "voucher" worth about $25. Most were sold off simply to obtain money to buy food and other needs as many companies stopped paying wages. Russia had wiped out domestic savings with hyperinflation after 1991.
It should not be surprising that banks became the economy's main control centers, as in the West's bubble economies. Instead of the promised prosperity, a new class of billionaires was endowed, headed by the notorious Seven Bankers who appropriated the formerly state-owned oil and gas, nickel and platinum, electricity and aluminum production, as well as real estate, electric utilities and other public enterprises. It was the largest giveaway in modern history. The Soviet nomenklatura became the new lords in outright seizure that Marx would have characterized as "primitive accumulation."
The American advisors knew the obvious: Russian savings had been wiped out by the polst-1991 hyperinflation, so the new owners could only cash out by selling shares to Western buyers. The kleptocrats cashed out as expected, by dumping their shares to foreign investors so quickly at such giveaway prices that Russia's stock market became the world's top performer for Western investors in 1994-96.
The Russian oligarchs kept most of their sales proceeds abroad in British and other banks, beyond the reach of Russian authorities to recapture. Much was spent on London real estate, sports teams and luxury estates in the world's flight-capital havens. Almost none was invested in Russian industry. Wage arrears often mounted up half a year behind. Living standards shrank, along with the population as birth rates plunged throughout the former Soviet economies. Skilled labor emigrated.
The basic neoliberal idea of prosperity is financial gain based on turning rent extraction into a flow of interest payments by buyers-on-credit. This policy favors financial engineering over industrial investment, reversing the Progressive Era's industrial capitalism that Marx anticipated would be a transition stage leading to socialism. Russia adopted the West's anti-socialist rollback toward neofeudalism.
Russian officials failed to understand the State Theory of money that is the basis of Modern Monetary Theory: States can create their own money, giving it value by accepting it in payment of taxes. The Soviet government financed its economy for seventy years without any need to back the ruble with foreign exchange. But Russia's central bank was persuaded that "sound money" required it to back its domestic ruble currency with U.S. Treasury bonds in order to prevent inflation. Russian leaders did not realize that dollars or other foreign currencies were only needed to finance balance-of-payments deficits, not domestic spending except as this money was spent on imports.
Russia joined the dollar standard. Buying Treasury bonds meant lending to the U.S. Government. The central bank bought U.S. Treasury securities to back its domestic currency. These purchases helped finance Cold War escalation in countries around Russia. Russia paid 100% annual interest in the mid-1990s, creating a bonanza for U.S. investors. On balance, this neoliberal policy lay Russia's economy open to looting by financial institutions seeking natural resource rent, land rent and monopoly rent for themselves. Instead of targeting such rents, Russia imposed taxes mainly on labor via a regressive flat tax – too right wing to be adopted even in the United States!
When the Soviet Union dissolved itself, its officials showed no apprehension of how quickly their economies would be de-industrialized as a result of accepting U.S. advice to privatize state enterprises, natural resources and basic infrastructure. Whatever knowledge of Marx's analysis of capitalism had existed (perhaps in Nicolai Bukharin's time) was long gone. It is as if no Russian official had read Volumes II and III of Marx's Capital (or Theories of Surplus Value ) where he reviewed the laws of economic rent and interest-bearing debt.
The inability of Russia, the Baltics and other post-Soviet countries to understand the FIRE sector and its financial dynamics provides an object lesson for other countries as to what to avoid. Reversing the principles of Russia's October 1917 Revolution, the post-Soviet kleptocracy was akin to the feudal epoch's "primitive accumulation" of the land and commons. They adopted the neoliberal business plan: to establish monopolies, first and most easily by privatizing the public infrastructure that had been built up, extracting economic rents and them paying out the resulting as interest and dividends.
This Western financial advice became a textbook example of how not to organize an economy. [4] Having rejoined the global economy free of debt in 1991, Russia's population, companies and government quickly ran up debts as a result of its man-made disaster. Families could have been given their homes freely, just as corporate managers were given their entire companies virtually for free. But Russian managers were as anti-labor as they were greedy to grab their own assets from the public domain. Soaring housing prices quickly plagued Russian's economy with one of the world's highest-priced living and business costs. That prevented any thought of industrial competitiveness with the United States or Europe. What passed for Soviet Marxism lacked an understanding of how economic rents and the ensuing high labor costs affected international prices, or how debt service and capital flight affected the currency's exchange rate.
Adversaries of socialism pronounced Marxist theory dead, as if the Soviet dissolution meant the end of Marxism. But today, less than three decades later, the leading Western economies are themselves succumbing to an overgrowth of debt and shrinking prosperity. Russia failed to recognize that just as its own economy was expiring, so was the West's. Industrial capitalism is succumbing to a predatory finance capitalism that is leaving Western economies debt-ridden. [5] The underlying causes were clear already a century ago: unchecked financial rentiers , absentee ownership and monopolies.
The post-Soviet collapse in the 1990s was not a failure of Marxism, but of the anti-socialist ideology that is plunging Western economies under domination by the Finance, Insurance and Real Estate (FIRE) sector's symbiosis of the three forms of rent extraction: land and natural resource rent, monopoly rent, and interest (financial rent). This is precisely the fate from which 19 th -century socialism, Marxism and even state capitalism sought to save the industrial economies.
A silver lining to the Soviet "final" stage has been to free Marxist analysis from Russian Marxology. Its focus of Soviet Marxology was not an analysis of how the capitalist nations were becoming financialized neo- rentier economies, but was mainly propagandistic, ossifying into a stereotyped identity politics appealing to labor and oppressed minorities. Today's revival of Marxist scholarship has begun to show how the U.S.-centered global economy is entering a period of chronic austerity, debt deflation, and polarization between creditors and debtors.
Financialization and privatization are submerging capitalism in debt deflation
By 1991, when the Soviet Union's leaders decided to take the "Western" path, the Western economies themselves were reaching a terminus. Appearances were saved by a wave of unproductive credit and debt creation to sustain the bubble economy that finally crashed in 2008.
The pitfalls of this financial dynamic were not apparent in the early years after World War II, largely because economies emerged with their private sectors free of debt. The ensuing boom endowed the middle class in the United States and other countries, but was debt financed, first for home ownership and commercial real estate, then by consumer credit to purchase of automobiles and appliances, and finally by credit-card debt just to meet living expenses.
The same debt overgrowth occurred in the industrial sector, where bank and bondholder credit since the 1980s has been increasingly for corporate takeovers and raiding, stock buybacks and even to pay dividends. Industry has become a vehicle for financial engineering to increase stock prices and strip assets, not to increase the means of production. The result is that capitalism has fallen prey to resurgent rentier interests instead of liberating economies from absentee landlords, predatory banking and monopolies. Banks and bondholders have found their most lucrative market not in the manufacturing sector but in real estate and natural resource extraction.
These vested interests have translated their takings into the political power to shed taxes and dismantle regulations on wealth. The resulting political Counter-Reformation has inverted the idea of "free market" to mean an economy free for rent extractors, not free from landlords, monopolists and financial exploitation as Adam Smith, John Stuart Mill and other classical economists had envisioned. The word "reform" as used by today's neoliberal media means undoing Progressive Era reforms, dismantling public regulation and government power – except for control by finance and its allied vested interests.
All this is the opposite of socialism, which has now sunk to its nadir through the Western World. The past four decades have seen most of the European and North American parties calling themselves "socialist" make an about-face to follow Tony Blair's New Labour, the French socialists-in-name and the Clinton's New Democrats. They support privatization, financialization and a shift away from progressive taxation to a value-added tax (VAT) falling on consumers, not on finance or real estate.
China's socialist diplomacy in today's hostile world
Now that Western finance capitalism is stagnating, it is fighting even harder to prevent the post-2008 crisis from leading to socialist reforms that would re-socialize infrastructure that has been privatized and put a public banking system in place. Depicting the contrast between socialist and finance-capitalist economies as a clash of civilizations, U.S.-centered "Western" diplomacy is using military and political subversion to prevent a transition from capitalism into socialism.
China is the leading example of socialist success in a mixed economy. Unlike the Soviet Union, it has not proselytized its economic system or sought to promote revolution abroad to emulate its economic doctrine. Just the opposite: To avert attack, China has given foreign investors a stake in its economic growth. The aim has been to mobilize U.S. and other foreign interests as allies, willing customers for China's exports, and suppliers of modern production facilities in China.
This is the opposite of the antagonism that confronted Russia. The risk is that it involves financial investment. But China has protected its autonomy by requiring majority Chinese ownership in most sectors. The main danger is domestic, in the form of financial dynamics and private rent extraction. The great economic choice facing China today concerns the degree to which land and natural resources should be taxed.
The state owns the land, but does fully tax its rising valuation or rent-of-location that has made many families rich. Letting the resulting real-estate and financialized wealth dominate its economic growth poses two dangers: First, it increases the price that new buyers must pay for their home. Second, rising housing prices force these families to borrow – at interest. This turns the rental value of land – value created by society and public infrastructure investment – into a flow of interest to the banks. They end up receiving more over time than the sellers, while increasing the cost of living and doing business. That is a fate which a socialist economy must avoid at all costs.
At issue is how China can best manage credit and natural resource rent in a way that best meets the needs of its population. Now that China has built up a prosperous industry and real estate, its main challenge is to avoid the financial dynamics that are subjecting the West to debt deflation and burying Western economies. To avoid these dynamics, China must curtail the proliferation of unproductive debt created merely to transfer property on credit, inflating asset prices in the process.
Socialism is incompatible with a rentier class of landlords, natural resource owners and monopolists – the preferred clients of banks hoping to turn economic rent into interest charges. As a vehicle to allocate resources "the market" reflects the status quo of property ownership and credit-creation privileges at any given moment of time, without consideration for what is fair and efficient or predatory. Vested interests claim that such a market is an immutable force of nature, whose course cannot be altered by government "interference." This rhetoric of political passivity aims to deter politicians and voters from regulating economies, leaving the wealthy free to extract as much economic rent and interest as markets can bear by privatizing real estate, natural resources, banking and other monopolies.
Such rent seeking is antithetical to socialism's aim to take these assets into the public domain. That is why the financial sector, oil and mineral extractors and monopolists fight so passionately to dismantle state regulatory power and public banking. That is the diplomacy of finance capital, aiming to consolidate American hegemony over a unipolar world. It backs this strategy with a neoliberal academic curriculum that depicts predatory financial and rentier gains as if they add to national income, not simply transfer it into the hands of the rentier classes. This misleading picture of economic reality poses a danger for China sending its students to study economics at American and European universities.
The century that has elapsed since Russia's October 1917 Revolution has produced a substantial Marxist literature describing how finance capitalism has overpowered industrial capitalism. Its dynamics occupied Marx in Volumes II and III of Capital (and also his Theories of Surplus Value ). Like most observers of his era, Marx expected capitalism to make a substantial step toward socialism by overcoming the dynamics of parasitic capital, above all the tendency for debt to keep on expanding at compound interest until it produces a financial crash.
The only way to control banks and their allied rentier sectors is outright socialization. The past century has shown that if society does not control the banks and financial sector, they will control society. Their strategy is to block government money creation so that economies will be forced to rely on banks and bondholders. Regulatory authority to limit such financial aggression and the monopoly pricing and rent extraction it supports has been crippled in the West by "regulatory capture" by the rentier oligarchy.
Attempts to tax away rental income (the liberal alternative to taking real estate and natural resources directly into the public domain) is prone to lobbying for loopholes and evasion, most notoriously via offshore banking centers in tax-avoidance enclaves and the "flags of convenience" sponsored by the global oil and mining companies. This leaves the only way to save society from the financial power to convert rent into interest to be a policy of nationalizing natural resources, fully taxing land rent (where land and minerals are not taken directly into the public domain), and de-privatizing infrastructure and other key sectors.
Conclusion
Markets have not recovered for the products of American industry and labor since 2008. Industrial capitalism has been sacrificed to a form of finance capitalism that is looking more pre-capitalist (or simply oligarchic and neofeudal) with each passing year. The resulting polarization forces every economy – including China – to choose between saving its bankers and other creditors or freeing debtors and lowering the economy's cost structure. Will the government enforce bank and bondholder claims, or will it give priority to the economy and its people? That is an eternal political question spanning pre-capitalist, capitalist and post-capitalist economies.
Marx described the mathematics of compound interest expanding to absorb the entire economy as age-old, long predating industrial capitalism. He characterized the ancient mode of production as dominated by slavery and usury, and medieval banking as predatory. These financial dynamics exist in socialist economies just as they did in medieval and ancient economies. The way in which governments manage the dynamics of credit and debt thus are the dominant force in every era, and should receive the most pressing attention today as China shapes its socialist future.
Notes.
[1] I give the details in "Simon Patten on Public Infrastructure and Economic Rent Capture," American Journal of Economics and Sociology 70 (October 2011):873-903.
[2] My book Super-Imperialism (1972; new ed. 2002) reviews this discussion during 1944-46.
[3] I discuss the IMF and World Bank plan to wipe out Russian savings with hyperinflation and make manufacturing investment uneconomic in "How Neoliberal Tax and Financial Policy Impoverishes Russia – Needlessly," Mir Peremen (The World of Transformations), 2012 (3):49-64 (in Russian). МИР ПЕРЕМЕН 3/2012 (ISSN 2073-3038) Mir peremen М. ХАДСОН, Неолиберальная налоговая и финансовая политика приводит к обнищанию России, 49-64.
[4] I give details in "How Neoliberals Bankrupted 'New Europe': Latvia in the Global Credit Crisis," (with Jeffrey Sommers), in Martijn Konings, ed., The Great Credit Crash (Verso: London and New York, 2010), pp. 244-63, and "Stockholm Syndrome in the Baltics: Latvia's neoliberal war against labor and industry," in Jeffrey Sommers and Charles Woolfson , eds., The Contradictions of Austerity: The Socio-Economic Costs of the Neoliberal Baltic Model (Routledge 2014), pp. 44-63.
[5] For more analysis see Dirk Bezemer and Michael Hudson, " Finance is Not the Economy: Reviving the Conceptual Distinction ," Journal of Economic Issues , 50 (2016: #3), pp. 745-768.
|
|
|
Jul 21, 2017 | www.nakedcapitalism.com
hemeantwell , July 21, 2017 at 10:58 am
Outis Philalithopoulos Post author , July 21, 2017 at 1:06 pmWhile I respect the author for raising this topic, he seems to fall into "assessment of the Soviet Experiment" mode in a careless way. I realize I tend to repetition about this, but it is terribly misleading -- perhaps "disorienting" would be a better term -- to discuss theses questions without any reference to the tremendous impact external pressures -- call it "intersystemic conflict," "international conflict," whatever -- had on the course of the Soviet Union's development. While it could be argued that capitalist economies also faced external pressures, that would miss the question of how such pressures impact on a society in the process of formation . We're talking about questions of constrained path dependence of a fundamental order that the experimentalist mode of thinking misses. Etc, etc.
Then, as far as the "collapse of the Soviet Union" goes, there's no mention about the choice by significant sections of the Soviet elite to engage in looting instead of developing a transitional program that would protect viable sections of the Soviet economy under market socialism.
What from the standpoint of the Times editorial board looks like a necessary start-over was in fact a sloppily-carried decision, or merely an unintended outcome, of a section of the elite seizing an opportunity to enrich themselves.
While it is essential to try to determine the viability of alternative economic systems in comparison what we've got now, doing so without taking into account the tremendously destructive opposition a transition would face is, in a way, to blithely continue on in a "Soviet Experiment" mentality.
It's obvious that people can enjoyably engage in cooperative behavior, but if they can do so under a barrage is another matter. The one thing that we can be certain of is that if capitalist elites aren't thoroughly demoralized they will do whatever they can to 'prove' TINA.
likbez , July 21, 2017 at 11:16 pmI was a little confused by this comment. I'm not opposed to looking at the impact of external pressures, but I am opposed to treating them as monocausal.
Your preferred pattern of historical explanation shifts during the course of your comment. When discussing the USSR in the process of formation, you concentrate on bringing out external pressures and therefore considering the choices of the leadership as highly constrained. When discussing the collapse of the Soviet Union, you instead stress the choices of the leadership elite to "seize an opportunity to enrich themselves."
I'm not even sure why you would assume that your thesis about the elite choosing to engage in looting is opposed to anything that I'm saying.
I agree with you on is that it is possible to think both about what a self-sustaining better society might look like, and also the extent to which it's hard to get there within the constraints of current power structures. They are not the same question, and I think both are worth pondering.
Oregoncharles , July 22, 2017 at 12:57 amhemeantwell,
Very good points:
"Then, as far as the "collapse of the Soviet Union" goes, there's no mention about the choice by significant sections of the Soviet elite to engage in looting instead of developing a transitional program that would protect viable sections of the Soviet economy under market socialism.
What from the standpoint of the Times editorial board looks like a necessary start-over was in fact a sloppily-carried decision, or merely an unintended outcome, of a section of the elite seizing an opportunity to enrich themselves. "
West had spent several billion dollars in cash to bribe significant portions of the Soviet elite (Soros, via his foundation, was especially active). And large part of the elite war already poisoned by neoliberalism and wanted to become rich. So while pre-conditions for the collapse of the USSR were internal (communist ideology was actually discredited in early 70th; economic stagnation started around the same time, Communist Party leadership completely degraded and became a joke in 80th ), external pressures and subversive activity played the role of catalyst that made the process irreversible.
The fact that neoliberalism was rising at the time means that this was the worst possible time for the USSR to implement drastic economic reforms and sure mediocre politicians like Gorbachev quickly lost control of the process. With some important help of the West.
The subsequent economic rape of Russia was incredibly brutal and most probably well coordinated by the famous three letter agencies: CIA (via USAID and "Harvard mafia") ) and MI6 and their German and French counterparts. See
- http://thebirdman.org/Index/Others/Others-Doc-Economics&Finance/+Doc-Economics&Finance-GovernmentInfluence&Meddling/BankstersInRussiaAndGlobalEconomy.htm
- http://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtml
- https://paullikoudis.wordpress.com/2011/03/24/the-plunder-of-russia-in-the-1990s/
Brain drain, especially to the USA and Israel was simply incredible. Which, while good for professionals leaving (although tales of Russian Ph.D swiping malls are not uncommon, especially in Israel ) , who can earn much better money abroad, is actually another form of neocolonialism for the countries affected:
- http://researchanalytics.thomsonreuters.com/m/pdfs/grr-russia-jan10.pdf
- http://www.dailymail.co.uk/news/article-2858108/Great-Russian-Brain-Drain-Spike-professionals-leaving-country-President-Putin-started-term-office-Crimea-annexed.html
- http://www.nbcnews.com/news/world/russias-geriatric-space-program-creaking-n413607
Moneta , July 22, 2017 at 8:14 amIt was a tragically missed opportunity to try genuine socialism. Instead of essentially selling the state enterprises to the Mafia, they could have been GIVEN, probably broken up, to the workers in them. It would have been instant worker-owned, market regulated – what? We don't have a familiar name for it, but it might be what Marx meant by "socialism."
Ironically, the Bolsheviks first set up such co-operatives, called soviets, but soon seized them in favor of state ownership. End of the socialist experiment. It's quite possible they were far more Russian than Marxist.
MikeC , July 22, 2017 at 9:51 amThe US economy hit a wall in the 70s. Instead of readjusting internally, it used its reserve currency and global exploitation to gain an extra few decades of consumerism. If exploitation is acceptable, then we could say that capitalism wins. However, capitalism will work until there is nothing left to exploit.
In the meantime, the USSR was set up in a way where it could not follow
IMO, left leaning theoretical communism would have trouble surviving when in competition with a system based on short-termism such as capitalism. This competition against short-termism would force the communist country to turn into a form of fascism just to stop the opportunists which happen to have the skills from defecting.
Anon , July 22, 2017 at 7:39 pmWhile in the Peace Corps serving in Africa (after 2010), I had a former military doctor (originally from Moldavia) who I'd see due to ongoing health issues. He served in Angola as a doctor during the civil wars and had pictures of the people he helped who were injured in the war. He was hands down the most competent doctor I saw who was employed by the PC. This was by a wide margin of competence too. I had not illusions about the Peace Corps and it purpose (to put the kind face on US empire?). We'd talk quite a bit, and he was still bitter about the collapse of the Soviet Union, and Gorbachev who he blamed for its demise, due to the lower standards of living and hardships now faced by many in the Eastern bloc and in Russia itself. In all honesty, though I identify with the far Left, this was new to me since I never realized that anyone would long for those days since all I ever heard about as a youth (due to propaganda of course) was about long bread lines and the gray world of the lives of those in the Soviet Union. Kukezel's comments above, and other information I have gained over the time had somewhat expanded my ideas and understanding regarding the system, as have my growing understanding of just how unjust our system in the US is becoming more unjust year after year.
I am not knowledgeable enough, possibly not smart enough, to understand the finer points of the discussion here concerning Marx, but I do think it possible for we as a species to create better systems to organize our world other than one predicated on the profit motive. Besides being unsustainable in a world of finite resources and the possibility that we humans will destroy the possibility to exist, we need to creatively try new forms of organization. The problem with the concentration of power of present day capitalism is that it seems so adaptable to new ways to effectively change. I know some Marx but am limited, but he was very impressed with capitalism's way to adapt to preserve itself.
Unfortunately, at times I become too cynical about the ability of the human species intellect and abitlity to go beyond short-term solutions. We just may not be able to get past our limitations as a creature. In short, I just don't know if we are smart enough to do what is best for survival. Like my Peace Corps doctor, I too sometimes wax nostalgic for a past that will never return, back to the sixties when it seemed the distribution of wealth was more egalitarian, unions brought about some economic justice, and the concentration of power and wealth was not so dramatic as it is today. I just never know if I was too blind, or deluded, at the time to see that maybe those weren't actually better times in that the system itself was built upon the same exploitation has existed in all of US history. So all this good discussion at times brings me back to the question–is our historical evolution not far enough along a continuum for us to change before it is too late? That's a bummer of a thought, I know, but the present political manifestations keep blunting any optimism I still possess.
I too sometimes wax nostalgic for a past that will never return, back to the sixties when it seemed the distribution of wealth was more egalitarian, unions brought about some economic justice, and the concentration of power and wealth was not so dramatic as it is today.
That was "white priveledge" back then. It's passing is what led to Trump and the epidemic of homelessness.
|
|
|
Jul 22, 2017 | www.nakedcapitalism.com
John , July 22, 2017 at 4:47 am
I would rather live in Cuba than in Haiti, and the country's economic performance is all the more impressive considering the economic warfare wrought upon it by the US.
48% of Russians regret the breakup of the Soviet Union, and the second largest political party in Russia after Putin's is the Communist Party (article from The Nation circa 2012). And this isn't a political party claiming to bring about a new socialist society but rather one that promises to bring back the communism of the Brezhnev era.
Russia was a backwards country at the beginning of World War I and saw its industry annihilated by the war. The peace treaty ceded its industrial heartlands, and then it was ripped apart by the civil war of the 1920's. But this didn't compare to World War II, which wiped out an entire generation of Russians.
Yet within 12 years of the war's end, they were the first to put an object into space, and four years later they were the first to put a human into orbit. They Americans, who had been unscathed by the war, were blessed with nearly unlimited natural resources and had the most powerful economy and military in in history, saw their attempt blow up on the launchpad.
At this time in America, people actually thought socialism might win out. The Soviets certainly thought so. In the first two decades after World War II, their economy was probably the fastest growing in history. They were so confident that their system was superior that they assumed they could beat the American capitalists in every way, including providing the general populace with consumer goods. This promise, made during the "Kitchen Debates" and throughout the 60's and 70's, when the government officially embraced consumerism, was a horrible miscalculation that eventually contributed greatly to the public's discontent with the regime.
After the processes of industrialization and urbanization had completely, there was nowhere for the economy to go, and the low growth combined with the ossification of bureacratic structures and the entrenchment of the World War II generation in power meant a lack of job opportunities. All of this contributed to the malaise that killed productivity and increased alcoholism, creating a self-feedback loop. Yeltsin and his cronies calculated that if the USSR transitioned to a capitalist economy, they stood to make a lot of money, so they met in secret and agreed to its dissolution. The public wanted reform, but they didn't want full-blown capitalism, certainly not of the variety Russia saw in the 90's.
Especially considering the fact that Marx was arguably the greatest thinker of the modern era and his contributions were not at all limited to the 'isms' that people fought for in his name, I think a much better topic for a post would have been "common Cold War misconceptions about Russia and Marxism."
This is supposed to be a heterodox economics blog but it's always from the Keynesian perspective and never from the Marxist. Considering Keynes's thoughts on the Labour Party, for one, I think more perspectives are needed in informing discussion on how to approach questions of social justice. Marxian economists predicted the crisis just as well as the Keynesians. Let's listen.
|
|
|
www.unz.com
Maj. Kong , December 29, 2014 at 11:42 am GMT
Maj. Kong , December 29, 2014 at 11:48 am GMTPutin's biggest mistake was not creating the fake two party system. America has given the world many gifts, and our system of party politics is one of the best for maintaining control of a large nation. If Vlad had followed this advice, and created the real illusion of democracy in Russia, the West would have found him much harder to oppose.
http://latitude.blogs.nytimes.com/2013/03/25/till-death-berezovsky-defends-backing-putin/?_r=0
Article is by Gessen, and clearly biased against Russia, but I think the idea is still a good one.
Putin has arguably aged badly as a leader, and considers himself too indispensable, much like Jiang Zemin in China. Though by Russian standards, he's the best since Alexander II.
Dutch disease is another mark against Russia, which Putin hasn't done much about, and which arguably makes them more dependent on the West (and possibly China) than they should be.
The article above also doesn't mention Larry Summers, which is a profound insight to which particular businessmen got away with it.
http://isteve.blogspot.com/2006/03/real-larry-summers-scandal.html
http://fair.org/extra-online-articles/harvards-best-and-brightest-aided-russias-economic-ruin/
http://www.thenation.com/article/harvard-boys-do-russia
Back from when the left was more interested in hating capitalism, than the eeevil White Christian male.
|
|
|
Apr 12, 2017 | economistsview.typepad.com
libezkova said in reply to T... April 12, 2017 at 06:05 AM
"Yes, adding more epicycles will do the trick."
http://personal.lse.ac.uk/reisr/papers/17-wrong.pdf
This guy is funny (and actually rather clueless, Summers is much better ) defender of "Flat Earth" theory:
== quote ==
A related criticism of macroeconomics is that it ignores financial factors. Macroeconomists supposedly failed to anticipate the crisis because they were enamored by models where financial markets and institutions were absent, as all financing was assumed to be efficient (De Grawe, 2009, Skidelsky, 2009). The field would be in denial if it continued to ignore these macro-financial links.
One area where macroeconomists have perhaps more of an influence is in monetary policy. Central banks hire more PhD economists than any other policy institution, and in the United States, the current and past chair of the Federal Reserve are distinguished academic macroeconomists, as have been several members of the FOMC over the years. In any given week, there are at least one conference and dozens of seminars hosted at central banks all over the world where the latest academic research is discussed. The speeches of central bank governors refer to academic papers in macroeconomics more than those by any other policymaker.
... ... ...
A separate criticism of macroeconomic policy advice accuses it of being politically biased. Since the early days of the field, with Keynes and the Great Depression, macroeconomics was associated with aggressive and controversial policies and with researchers that wore other hats as public intellectuals. Even more recently, during the rational expectations microfoundations revolution of the 1970s, early papers had radical policy recommendations, like the result that all systematic aggregate-demand policy is ineffective, and some leading researchers had strong political views. Romer (2016) criticizes modern macroeconomics for raising questions about what should be obvious truths, like the effect of monetary policy on output. He lays blame on the influence that Edward Prescott, Robert Lucas and Thomas Sargent had on field. Krugman (2009) in turn, claims the problem of macroeconomics is ideology, and in particular points to the fierce battles between different types of macroeconomists in the 1970s and 1980s, described by Hall (1976) in terms of saltwater versus freshwater camps.
...Macroeconomists, instead, are asked to routinely produce forecasts to guide fiscal and monetary policy, and are perhaps too eager to comply.
djb said...
"Is something really wrong with macroeconomics? - Ricardo Reis"
I appreciate that the author thinks the solution is to have young people look at economics with fresh eyes to bring up new approaches this is a quote when describing how they pick fresh young economists to go on a tour and present their findings:
"the choices are arguably not biased in the direction of a particular field, although they are most likely all in the mainstream tradition"
unfortunately the mainstream tradition is full of biase and restrictions about what is allow to be considered and what is not so if all you allow are people who are expanding on the "mainstream tradition" I think you are severely restricting yourself further a lot of good ideas from the past have been discarded, not allowed, ridiculed, not really analyzed or expanded upon.... presented or taught or represented by people who have never studied the ideas directly got them third hand or 5th hand , from people who misrepresent the ideas in the first place
want fresh new ideas? go back to the beginning of economics, understand over and over what the founds say , go read Adam Smith directly, read the generally theory by Keynes directly don't just assume the verion samuelson gave us of Keynes represents what he actually said, or Hansen or hicks, or what ever nonsense they are passing along today as "what Keynes said" reevaluation the who field over and over
And yea, study over and over the current teachings so you really understand it intuitively don't allow magical thinking to let you "pretend" you got it don't accept that its impossible to really understand it and "that's just what the equations show" understand the limitations, figure out when our fearless leaders and "great minds" and elder statesman of economics are "overplaying their hand" and concluding more than they can this is hard work and it takes dedication and don't assume that econometrics is the only real economics and that theory is "unprovable" or "always subjective" because without theory there is no econometrics, there is just a bunch of meaningless numbers
so yea we can use fresh young minds taking a new look at things but we will nowhere if all we allow is that "they are most likely all in the mainstream tradition"
|
|
|
Jun 28, 2017 | www.unz.com
June 22, 2017 at 10:44 pm GMTWhat total lunacy and hippocracy. Do I really need to remind you that before 2014 and the Russian invasion of Ukraine, NATO membership was not a popular option for most Ukrainians. But now, after the deceitful land grab by Russia of Crimea and three years of proxy directed war in Donbas orchestrated in Moscow, most Ukrainians now look favorably towards NATO membership. Latest polls show that 55.9% o Ukrainians now favor NATO integration (I think that pre 2014 it was less than 15%) and 66.4% now favor EU integration. You reap what you sew, Putinista fanboys. Bye, bye 'NovoRossiya'! http://www.pravda.com.ua/news/2017/06/17/7147228/ The engine that drove the US into an economic power house was decades of violating free market principles
The only thing that Russia wanted from Ukraine is not to allow themselves to become threat to Russia by joining NATO. Ukraine, having wasted all other options for normal development, couldn't resist taking the offer of cashing in on becoming a threat to Russia. Ukraine tries to justify this based on some past historical grievances from the 1930's.
The engine that drove German economic success was being bailed out by the US right after WW2..
Considering that Russia was gang-raped by Bill Clinton's Oligarch friends .a gang rape that caused a demographic collapse of the Russian population .Russia's subsequent recovery has been miraculous
OOPS These comments were meant for Priss Factor not Mr. Hack
|
|
|
Jun 26, 2017 | economistsview.typepad.com
anne -> anne... , June 25, 2017 at 04:31 PM
1994libezkova -> anne... , June 26, 2017 at 08:09 AMChina's experience does not show that gradual reform is superior to the shock therapy undertaken in Eastern Europe and the Former Soviet Union....
-- Jeffrey Sachs and Wing Thye Woo
[ Of course, China's experience had already showed and continues all these years after just the opposite. This is very, very important. ]
Your discussion just again had shown that there is no economics, only a political economy.Paine -> anne... , June 25, 2017 at 06:30 PMAnd all those neoliberal perversions, which are sold as an economic science is just an apologetics for the financial oligarchy.
Apologetics of plunder in this particular case.
In a way the USSR with its discredited communist ideology, degenerated Bolshevik leadership (just look at who was at the Politburo of CPSU at the time; people much lower in abilities then Trump :-) and inept and politically naïve Mikhail Gorbachev at the helm had chosen the most inopportune time to collapse :-)
And neoliberal vultures instantly circled the corpse and have had a feast. Geopolitical goals of the USA also played important role in amplifying the scope of plunder.
No comparison of performance of Russia vs. China makes any sense if it ignores this fact.
Lesson for the weekanne -> Paine ... , June 25, 2017 at 07:11 PMDeng ?
yesSachs ?
NyetWhile I would argue with the economic advice given the Russian government after 1988, I am simply trying to understand the reasoning behind the advice, no more than that.libezkova -> anne... , June 26, 2017 at 08:15 AMThe reasoning was simple and is not hard to understand: Carthago delenda est.In a way McCain can be viewed now as a caricature of the Roman senator Cato the Elder, who is said to have used it as the conclusion to all his speeches.
History repeats "History repeats itself, first as tragedy, second as farce."
|
|
|
economistsview.typepad.com
anne -> anne... June 25, 2017 at 04:31 PM
https://www.researchgate.net/profile/Jeffrey_Sachs2/publication/5060711_Structural_Factors_in_the_Economic_Reforms_of_China_Eastern_Europe_and_the_Former_Soviet_Union/links/572f9f5e08ae744151904b90/Structural-Factors-in-the-Economic-Reforms-of-China-Eastern-Europe-and-the-Former-Soviet-Union.pdf1994
Structural factors in the economic reforms of China, Eastern Europe, and the Former Soviet Union
By Jeffrey Sachs and Wing Thye WooDiscussion
By Stanley Fischer - Massachusetts Institute of Technology
The facts with which Jeffrey Sachs and Wing Woo have to contend are, first, that Chinese economic reform has been successful in producing extraordinary growth - the greatest increase in economic well-being within a 15-year period in all of history (perhaps excluding the period after the invention of fire); but second, that reform in Eastern Europe and the Former Soviet Union (EEFSU) has been accompanied not by growth but by massive output declines (in countries that are reforming as well as in those, such as Ukraine, which are not).
The interpretation of these facts with which they have to contend is that Chinese reform - described variously as piecemeal, pragmatic, bottom-up, or gradual - has been successful because it has been gradualist and EEFSU reform has failed because it has applied shock treatment. The conclusion is that EEFSU should have pursued a gradualist reform strategy, perhaps one that started with economic rather than political reform. Many also imply that there is still time for gradualism.
Sachs and Woo reject the view that economic reform in EEFSU should have been gradualist, though they do approve of the gradualist Chinese approach to the creation of a non-state industrial sector. They argue that the structure of the economy was responsible for the success of the Chinese reform strategy, and that there are no useful lessons for EEFSU from the Chinese case.
Reform in China started in an economy in which 80 percent of the population was rural, in which planning had never been pervasive, and in which economic control was in any case quite decentralized. Further, Chinese industrial growth has come largely from new firms, largely town and village enterprises, and there has been no reform of the state-owned enterprise (SOE) sector. In EEFSU by contrast, the industrial sector was extremely large, and there was no hope of starting a significant private sector without restructuring industry.
The authors make this argument with the aid of a model, basically one that says that the private sector in a reforming EEFSU economy is so heavily taxed that it does not pay an individual to move to that sector from the subsidized industrial sector. In China by contrast, agricultural reform freed up labour whose opportunity cost was below the earnings available in the industrial private (or at least TVE) sector - and in addition, because the SOE sector was relatively small, the industrial private sector was taxed less than in EEFSU. The model is linear and ignores uncertainty, but there can be no doubt that it is very difficult to start new firms in much of EEFSU. That, more than the earnings of an individual already in that sector, seems to be the equivalent of the tax that Sachs and Woo include; indeed, earnings for those who succeed in moving to the private sector are typically higher than they are in the state sector.
Sachs and Woo also argue that the data exaggerate China's success and EEFSU's output declines. I was initially inclined to discount this argument, but now believe it has a real basis, and that all that needs doing is to fill in the numbers....
Reply Sunday, June 25, 2017 at 04:17 PM anne -> anne... , June 25, 2017 at 04:25 PMReading the paper by Samuel Marden, which was important in understanding the economic transformation of China, was also an important experience in understanding why Jeffrey Sachs, Wing Thye Woo and Stanley Fischer expressly rejected the Chinese experience in looking to a development model for the Soviet Union as the Soviet Union was geographically transformed.anne -> anne... , June 25, 2017 at 04:31 PMThe Chinese development model worked dramatically well, the Soviet model that Sachs, Wing and Fischer supported was as dramatically disruptive and self-defeating.
1994China's experience does not show that gradual reform is superior to the shock therapy undertaken in Eastern Europe and the Former Soviet Union....
-- Jeffrey Sachs and Wing Thye Woo
[ Of course, China's experience had already showed and continues all these years after just the opposite. This is very, very important. ]
|
|
|
Jun 25, 2017 | economistsview.typepad.com
libezkova -> anne..., June 25, 2017 at 06:47 PM
After 1991 Eastern Europe and FSU were mercilessly looted. That was tremendous one time transfer of capital (and scientists and engineers) to Western Europe and the USA. Which helped to secure "Clinton prosperity period"China were not plundered by the West. Russia and Eastern Europe were. That's the key difference.
For Russia this period was called by Anne Williamson in her testimony before the Committee on Banking and Financial Services of the United States House of Representatives "The economic rape of Russia"
Paul Likoudis has an interesting analysis of this event: https://paullikoudis.wordpress.com/2011/03/24/the-plunder-of-russia-in-the-1990s/
Sorry long quote
How Clinton & Company & The Bankers Plundered Russia by Paul LikoudisMay 4, 2000
The other day I was surprised to learn that Jeffrey Sachs, the creator of "shock therapy" capitalism, who participated in the looting of Russia in the 1990s, is now NY Gov. Andrew Cuomo's top adviser for health care. So we in NY will get shock therapy, much as the Russians did two decades ago. Here is a story I wrote for The Wanderer in 2000:
===
How Clinton & Company & The Bankers Plundered Russia
by Paul Likoudis
In an ordinary election year, Anne Williamson's Contagion would be political dynamite, a bombshell, a block-buster, a regime breaker.
If America were a free and democratic country, with a free press and independent publishing houses (and assuming, of course, that Americans were a literate people), Williamson's book would topple the Clinton regime, the World Bank, the International Monetary Fund, and the rest of the criminal cabal that inhabits the world of modern corporate statism faster than you could say "Jonathan Hay."
Hay, for those who need an introduction to the international financial buccaneers who control our lives, was the general director of the Harvard Institute of International Development (HIID) in Moscow (1992-1997), who facilitated the crippling of the Russian economy and the plundering of its industrial and manufacturing infrastructure with a strategy concocted by Larry Summers, Andre Schliefer (HIID's Cambridge-based manager), Jeffrey Sachs and his Swedish sidekick Anders Aslund, and a host of private players from banks and investment houses in Boston and New York - a plan approved and assisted by the U.S. Department of the Treasury.
Contagion can be read on many different levels.
At its simplest, it is a breezy, slightly cynical, highly entertaining narrative of Russian history from the last months of Gorbachev's rule to April 2000 - a period which saw Russia transformed from a decaying socialist economy (which despite its shortcomings, provided a modest standard of living to its citizens) to a "managed economy" where home-grown gangsters and socialist theoreticians from the West, like Hay and his fellow Harvardian Jeffrey Sachs, delivered 2,500% inflation and indescribable poverty, and transferred the ownership of Russian industry to Western financiers.
Williamson was an eyewitness who lived on and off in Russia for more than ten years, where she reported on all things Russian for The New York Times, Th e Wall Street Journal, and a host of other equally reputable publications. She knew and interviewed just about everybody involved in this gargantuan plundering scheme: Russian politicians and businessmen, the new "gangster" capitalists and their American sponsors from the IMF, the World Bank, USAID, Credit Suisse First Boston, the CIA, the KGB - all in all, hundreds of sources who spoke candidly, often ruthlessly, of their parts in this terrible human drama.
Her account is filled with quotations from interviews with top aides of Yeltsin and Clinton, all down through the ranks of the two hierarchical societies to the proliferating mass of Russian destitute, pornographers, pimps, drug dealers, and prostitutes. Some of the principal characters, of course, refused to talk to Williamson, such as Bill Clinton's longtime friend from Oxford, Strobe Talbott, now a deputy secretary of state and, Williamson suspects, a onetime KGB operative whose claim to fame is a deceitful translation of the Khrushchev Memoirs. (A KGB colonel refused to confirm or deny to Williamson that Clinton and Talbott visited North Vietnam together in 1971 - though he did confirm their contacts with the KGB for their protests against the U.S. war in Vietnam in Moscow. See especially footnote 1, page 210.)
The 546-page book (the best part of which is the footnotes) gives a nearly day-by-day report on what happened to Russia; left unstated, but implied on every page, is the assumption that those in the United States who think what happened in Russia "can't happen here" better realize it can happen here.
Once the Clinton regime and its lapdogs in the media defined Russian thug Boris Yeltsin as a "democrat," the wholesale looting of Russia began. According to the socialist theoreticians at Harvard, Russia needed to be brought into the New World Order in a hurry; and what better way to do it than Sachs' "shock therapy" - a plan that empowered the degenerate, third-generation descendants of the original Bolsheviks by assigning them the deeds of Russia's mightiest state-owned industries - including the giant gas, oil, electrical, and telecommunications industries, the world's largest paper, iron, and steel factories, the world's richest gold, silver, diamond, and platinum mines, automobile and airplane factories, etc. - who, in turn, sold some of their shares of the properties to Westerners for a song, and pocketed the cash, while retaining control of the companies.
These third-generation Bolsheviks - led by former Pravda hack Yegor Gaidar, grandson of a Bolshevik who achieved prominence as the teenage mass murderer of White Army officers, now heads the Moscow-based Institute for Economies in Transition - became instant millionaires (or billionaires) and left the Russian workers virtual slaves of them and their new foreign investors.
When Russian members of the Supreme Soviet openly criticized the looting of the national patrimony by these new gangsters early in the U.S.-driven "reform" program, in 1993, before all Soviet institutions were destroyed, Yeltsin bombed Parliament.
Ironically, when Harvard's Sachs and Hay started identifying Russians they could work with, they ignored - or shunned - the most capable talent at hand: those numerous Russian economists who for 20 years had been studying the Swiss economist Wilhelm von Roepke and his disciple, Ludwig Erhard, father of Germany's "economic miracle" in anticipation of the day when Communism would collapse. Somewhat sardonically, Williamson notes that one, probably unintended, benefit of Gorbachev's perestroika was the recruitment of these Russian economists by top U.S. universities.
In the new, emerging global economy, it's clear that Russia is the designated center for heavy manufacturing - just as Asia is for clothing and computers - with its nearly unlimited supply of hydroelectric power, iron and steel, timber, gold and other precious metals.
This helps explain why America's political elites don't give a fig about the closing down of American industries and mines. As Williamson observes, Russia is viewed as some kind of "closet."
What is important for Western readers to understand - as Williamson reports - is that when Western banks and corporations bought these companies at bargain basement prices, they bought more than just industrial equipment. In the Soviet model, every unit of industrial production included workers' housing, churches, opera houses, schools, hospitals, supermarkets, etc., and the whole kit-and-caboodle was included in the selling price. By buying large shares of these companies, Western corporations became, ipso facto, town managers.
Another Level
On another level, Contagion is about the workings of international finance, the consolidation of capital into fewer and fewer hands, and the ruthless, death-dealing policies it inflicts on its target countries through currency manipulation, inflation, depression, taxation and war - with emphasis on Russia but with attention also given to Mexico, Thailand, Indonesia, the Balkans, and other countries, and how it uses its control over money to produce social chaos.
Those who read Williamson's book will find particularly interesting her treatment of the Federal Reserve, and how this "bank" was designed to plunder the wealth of America through war, debt, and taxation, in order to maintain what is nothing more nor less than a giant pyramid scheme that depends on domination of the earth and its resources.
Williamson is of that small but noble school of economics writers who believe that the academic field of economics is not some esoteric science that can only be comprehended by those with IQs in four digits, and she - drawing on such writers as Hayek and von Mises, Roepke and the late American Murray Rothbard - explains in layman's vocabulary the nuts and bolts of sound economic principles and the real-world effects of the Fed's policies on hapless Americans.
Contagion also serves up a severe indictment of the World Bank, the International Monetary Fund, and the other international "lending" agencies spawned by the Council on Foreign Relations and similar "councils" and "commissions" which are fronts for the big banks run by the Houses of Rockefeller, Morgan, Warburg, et al.
The policies inflicted on Russia by the banks were cruel to the Nth degree; but the policy implementers - Williamson employs the derogatory Russian word m yakigolovy ("soft-headed ones") applied to the Americans - were a foppish lot, streaming into Russia by the thousands (the IMF, alone, with 150 staffers) with their outrageous salaries and per diem allowances, renting out the finest dachas, bringing in their exotic consumer goods, driving up prices for goods and rents, spurring a boom in the drug and prostitution businesses, and then watching, cold-heartedly, the declining fortunes of their hosts as they lost everything - including the artistic heritage of the country.
Williamson describes brilliantly that heady atmosphere in Moscow in the early days of the IMF/USAID loan-scamming: a 24-hour party. There were bars like the Canadian-operated Hungry Duck, which lured Russian teenage girls into its bar with a male striptease and free drinks, "who, once thoroughly intoxicated, were then exposed to crowds of anxious young men the club admitted only late in the evening."
The Third Level
At a third and more intriguing level, Contagion is about America's criminal politics in the Clinton regime, and, inevitably, the reader will put Williamson's book down with the sense that Al Gore will be the next occupier of the White House.
Gore, who was raised to be President, has impeccable Russian connections. His father, of course, was Lenin financier Armand Hammer's pocket senator, and it was Hammer who paid for Al Jr.'s expensive St. Alban's Prep schooling; and, as Williamson reports, Al Jr.'s daughter married Andrew Schiff, grandson of Jacob, who, as a member of Kuhn, Loeb & Co., underwrote anti-czarist political agitation for two decades before Lenin's coup, and congratulated Lenin upon his successful revolution.
Williamson also documents Gore's intimate involvement with powerful Wall Street financial houses, and his New York breakfast meeting with multibillionaire George Soros (a key Russian player) just as the Russian collapse was underway.
Williamson tells an interesting story of Gore's response to the IMF/World Bank/USAID plunder of U.S. taxpayers for the purpose of hobbling Russia.
By March 1999, Russia was now a financial basket case, and billions, if not tens of billions of U.S. taxpayer-backed loans had vanished into the secret bank accounts of both Russian and American gangster capitalists, and the news was starting to make little vibrations on Capitol Hill. "The U.S. administration's response to the debacle was repulsively similar to a typical Bill Clinton bimbo-eruption operation: Having ruined Russia by cosseting her in debt, meddling ignorantly in her internal affairs, and funding a drunken usurper, his agents denied all error and slandered ('slimed') her," writes Williamson.
"Pundits and academics joined government officials in bemoaning Mother Russia's thieving ways, her bottomless corruption and constant chaos, all the while wringing their soft hands with a schoolmarm's exasperation. Russia's self-appointed democracy coach Strobe Talbott ('Pro-Consul Strobe' to the Russians) would get it right. An equally sanctimonious Albert Gore - the same Al Gore who'd been so quick to return the CIA's 1995 report detailing Viktor Chernomyrdin's and Anatoly Chubais' personal corruption with the single word 'Bullshit' scrawled across it - took the low road and sniffed that the Russians would just have to get their own economic house in order and cut their own deal with the IMF. . . ."
The cost to the American taxpayers of Clinton regime bailouts in a three-and-a-half-year period, Williamson notes, is more than $180 billion! The "new financial architecture" Clinton has erected, she writes, "isn't new at all, but rather something the international public lenders have been wanting for decades, i.e., an automatic bailout for their own bad practices."
As the extent of the corruption of the Clinton-Yeltsin "reform" plan for Russia unfolded last year, with the attendant Bank of New York scandal, the mysterious death of super banker Edmond Safra in his Monte Carlo penthouse, the collapse of the Russian stock market, and the whiplash effect in Southeast Asia, Congress was pressed to hold hearings.
What resulted, as Williamson accurately narrates it, was just a smoke screen, show hearings that barely rose above the seriousness of a Gilbert and Sullivan farce - though they did result in proposed new domestic banking laws that, if passed, will effectively make banks another federal police force responsible for reporting to the U.S. government the most minute financial transactions of U.S. citizens.
Double Effect
In this regard, it is instructive to quote Williamson at length: "If the FBI, [Manhattan District Attorney] Robert Morgenthau, or Congress were serious about getting to the bottom of the plundering of Russia's assets and U.S. taxpayers' resources, they would show far more professional interest in exactly what was said and agreed in the private meetings [U.S. Treasury secretary] Larry Summers, Strobe Talbott, and [former Treasury Secretary] Robert Rubin conducted with Anatoly Chubais [former Russian finance minister, who oversaw the distribution and sale of Russian industries], and Sergie Vasiliev [Yeltsin's principal legal adviser, and a member of the Chubais clan], and later Chubais again in June and July of 1998.
"Instead of allowing Larry Summers to ramble casually in response to questions at a banking committee hearing, the Treasury secretary should be asked exactly who suckered him - his Russian friends, his own boss [former Harvard associate Robert Rubin, his boss at Treasury who was once cochairman at Goldman Sachs], or private sector counterparts of the Working Committee on Financial Markets [a White House group whose membership is drawn from the country's main financial and market institutions: the Fed, Treasury, SEC, and the Commodities & Trading Commission]. . . . Or did he just bungle the entire matter on account of wishful thinking? Or was it gross incompetence?
"The FBI and Congress ought to be very interested in establishing for taxpayers the truth of any alleged 'national security' issues that justified allowing the Harvard Institute of International Development to privatize U.S. bilateral assistance. It too should be their brief to discover the relationship between the [Swedish wheeler-dealer and crony of Sachs, Anders] Aslund/Carnegie crowd and Treasury and exactly what influence that relationship may have had on the awarding of additional grants to Harvard without competition. On what basis did Team Clinton direct their financial donor, American International Group's (AIG) Maurice Greenberg (a man nearly as ubiquitous as any Russian oligarch in sweetheart public-funding deals), to Brunswick Brokerage when sniffing out a $300 million OPIC guarantee for a Russian investment fund. . . .
And why did Michel Camdessus [who left the presidency of the IMF earlier this year] announce his sudden retirement so soon after Moscow newspapers reported that a $200,000 payment was made to him from a secret Kremlin bank account? . . .
"American and Russian citizens can never be allowed to learn what really happened to the billions lent to Yeltsin's government; it would expose the unsavory and self-interested side of our political, financial, and media elites. . . . Instead, the [House] Banking Committee hearings will use the smoke screen of policing foreign assistance flows to pass legislation that will effectively end U.S. citizens' financial privacy while making them prisoners of their citizenship. . . . The Banking Committee will use the opportunity the Russian dirty money scandal presents to reanimate the domestic 'Know Your Customer' program, which charges domestic banks with monitoring and reporting on the financial transactions in which middle-class Americans engage. This data is collected and used by various government agencies, including the IRS; meaning that if a citizen sells the family's beat-up station wagon or their 'starter' home, the taxman is alerted immediately that the citizen's filing should reflect the greater tax obligation in that year of the sale. . . . Other data on citizens for which the government has long thirsted will also be collected by government's newest police force, the banks. . . ."
You see, as this book explains, the Clinton's Russia policy did not just plunder Russians, leaving them destitute while creating a new and ruthless class of international capitalist gangsters at U.S. taxpayer expense; it had the double consequence of bringing all Americans deeper into the bankers' New World Order by increasing their debt load, decreasing their privacy, and restricting their civil rights. If only Americans cared.
|
|
|
May 04, 2000 | economistsview.typepad.com
The other day I was surprised to learn that Jeffrey Sachs, the creator of "shock therapy" capitalism, who participated in the looting of Russia in the 1990s, is now NY Gov. Andrew Cuomo's top adviser for health care. So we in NY will get shock therapy, much as the Russians did two decades ago.
Here is a story I wrote for The Wanderer in 2000:
===
How Clinton & Company & The Bankers Plundered Russia
by Paul Likoudis
In an ordinary election year, Anne Williamson's Contagion would be political dynamite, a bombshell, a block-buster, a regime breaker.
If America were a free and democratic country, with a free press and independent publishing houses (and assuming, of course, that Americans were a literate people), Williamson's book would topple the Clinton regime, the World Bank, the International Monetary Fund, and the rest of the criminal cabal that inhabits the world of modern corporate statism faster than you could say "Jonathan Hay."
Hay, for those who need an introduction to the international financial buccaneers who control our lives, was the general director of the Harvard Institute of International Development (HIID) in Moscow (1992-1997), who facilitated the crippling of the Russian economy and the plundering of its industrial and manufacturing infrastructure with a strategy concocted by Larry Summers, Andre Schliefer (HIID's Cambridge-based manager), Jeffrey Sachs and his Swedish sidekick Anders Aslund, and a host of private players from banks and investment houses in Boston and New York - a plan approved and assisted by the U.S. Department of the Treasury.
Contagion can be read on many different levels.
At its simplest, it is a breezy, slightly cynical, highly entertaining narrative of Russian history from the last months of Gorbachev's rule to April 2000 - a period which saw Russia transformed from a decaying socialist economy (which despite its shortcomings, provided a modest standard of living to its citizens) to a "managed economy" where home-grown gangsters and socialist theoreticians from the West, like Hay and his fellow Harvardian Jeffrey Sachs, delivered 2,500% inflation and indescribable poverty, and transferred the ownership of Russian industry to Western financiers.
Williamson was an eyewitness who lived on and off in Russia for more than ten years, where she reported on all things Russian for The New York Times, Th e Wall Street Journal, and a host of other equally reputable publications. She knew and interviewed just about everybody involved in this gargantuan plundering scheme: Russian politicians and businessmen, the new "gangster" capitalists and their American sponsors from the IMF, the World Bank, USAID, Credit Suisse First Boston, the CIA, the KGB - all in all, hundreds of sources who spoke candidly, often ruthlessly, of their parts in this terrible human drama.
Her account is filled with quotations from interviews with top aides of Yeltsin and Clinton, all down through the ranks of the two hierarchical societies to the proliferating mass of Russian destitute, pornographers, pimps, drug dealers, and prostitutes. Some of the principal characters, of course, refused to talk to Williamson, such as Bill Clinton's longtime friend from Oxford, Strobe Talbott, now a deputy secretary of state and, Williamson suspects, a onetime KGB operative whose claim to fame is a deceitful translation of the Khrushchev Memoirs. (A KGB colonel refused to confirm or deny to Williamson that Clinton and Talbott visited North Vietnam together in 1971 - though he did confirm their contacts with the KGB for their protests against the U.S. war in Vietnam in Moscow. See especially footnote 1, page 210.)
The 546-page book (the best part of which is the footnotes) gives a nearly day-by-day report on what happened to Russia; left unstated, but implied on every page, is the assumption that those in the United States who think what happened in Russia "can't happen here" better realize it can happen here.
Once the Clinton regime and its lapdogs in the media defined Russian thug Boris Yeltsin as a "democrat," the wholesale looting of Russia began. According to the socialist theoreticians at Harvard, Russia needed to be brought into the New World Order in a hurry; and what better way to do it than Sachs' "shock therapy" - a plan that empowered the degenerate, third-generation descendants of the original Bolsheviks by assigning them the deeds of Russia's mightiest state-owned industries - including the giant gas, oil, electrical, and telecommunications industries, the world's largest paper, iron, and steel factories, the world's richest gold, silver, diamond, and platinum mines, automobile and airplane factories, etc. - who, in turn, sold some of their shares of the properties to Westerners for a song, and pocketed the cash, while retaining control of the companies.
These third-generation Bolsheviks - led by former Pravda hack Yegor Gaidar, grandson of a Bolshevik who achieved prominence as the teenage mass murderer of White Army officers, now heads the Moscow-based Institute for Economies in Transition - became instant millionaires (or billionaires) and left the Russian workers virtual slaves of them and their new foreign investors.
When Russian members of the Supreme Soviet openly criticized the looting of the national patrimony by these new gangsters early in the U.S.-driven "reform" program, in 1993, before all Soviet institutions were destroyed, Yeltsin bombed Parliament.
Ironically, when Harvard's Sachs and Hay started identifying Russians they could work with, they ignored - or shunned - the most capable talent at hand: those numerous Russian economists who for 20 years had been studying the Swiss economist Wilhelm von Roepke and his disciple, Ludwig Erhard, father of Germany's "economic miracle" in anticipation of the day when Communism would collapse.
Somewhat sardonically, Williamson notes that one, probably unintended, benefit of Gorbachev's perestroika was the recruitment of these Russian economists by top U.S. universities.
In the new, emerging global economy, it's clear that Russia is the designated center for heavy manufacturing - just as Asia is for clothing and computers - with its nearly unlimited supply of hydroelectric power, iron and steel, timber, gold and other precious metals.
This helps explain why America's political elites don't give a fig about the closing down of American industries and mines. As Williamson observes, Russia is viewed as some kind of "closet."
What is important for Western readers to understand - as Williamson reports - is that when Western banks and corporations bought these companies at bargain basement prices, they bought more than just industrial equipment. In the Soviet model, every unit of industrial production included workers' housing, churches, opera houses, schools, hospitals, supermarkets, etc., and the whole kit-and-caboodle was included in the selling price. By buying large shares of these companies, Western corporations became, ipso facto, town managers.
Another Level
On another level, Contagion is about the workings of international finance, the consolidation of capital into fewer and fewer hands, and the ruthless, death-dealing policies it inflicts on its target countries through currency manipulation, inflation, depression, taxation and war - with emphasis on Russia but with attention also given to Mexico, Thailand, Indonesia, the Balkans, and other countries, and how it uses its control over money to produce social chaos.
Those who read Williamson's book will find particularly interesting her treatment of the Federal Reserve, and how this "bank" was designed to plunder the wealth of America through war, debt, and taxation, in order to maintain what is nothing more nor less than a giant pyramid scheme that depends on domination of the earth and its resources.
Williamson is of that small but noble school of economics writers who believe that the academic field of economics is not some esoteric science that can only be comprehended by those with IQs in four digits, and she - drawing on such writers as Hayek and von Mises, Roepke and the late American Murray Rothbard - explains in layman's vocabulary the nuts and bolts of sound economic principles and the real-world effects of the Fed's policies on hapless Americans.
Contagion also serves up a severe indictment of the World Bank, the International Monetary Fund, and the other international "lending" agencies spawned by the Council on Foreign Relations and similar "councils" and "commissions" which are fronts for the big banks run by the Houses of Rockefeller, Morgan, Warburg, et al.
The policies inflicted on Russia by the banks were cruel to the Nth degree; but the policy implementers - Williamson employs the derogatory Russian word m yakigolovy ("soft-headed ones") applied to the Americans - were a foppish lot, streaming into Russia by the thousands (the IMF, alone, with 150 staffers) with their outrageous salaries and per diem allowances, renting out the finest dachas, bringing in their exotic consumer goods, driving up prices for goods and rents, spurring a boom in the drug and prostitution businesses, and then watching, cold-heartedly, the declining fortunes of their hosts as they lost everything - including the artistic heritage of the country.
Williamson describes brilliantly that heady atmosphere in Moscow in the early days of the IMF/USAID loan-scamming: a 24-hour party. There were bars like the Canadian-operated Hungry Duck, which lured Russian teenage girls into its bar with a male striptease and free drinks, "who, once thoroughly intoxicated, were then exposed to crowds of anxious young men the club admitted only late in the evening."
The Third Level
At a third and more intriguing level, Contagion is about America's criminal politics in the Clinton regime, and, inevitably, the reader will put Williamson's book down with the sense that Al Gore will be the next occupier of the White House.
Gore, who was raised to be President, has impeccable Russian connections. His father, of course, was Lenin financier Armand Hammer's pocket senator, and it was Hammer who paid for Al Jr.'s expensive St. Alban's Prep schooling; and, as Williamson reports, Al Jr.'s daughter married Andrew Schiff, grandson of Jacob, who, as a member of Kuhn, Loeb & Co., underwrote anti-czarist political agitation for two decades before Lenin's coup, and congratulated Lenin upon his successful revolution.
Williamson also documents Gore's intimate involvement with powerful Wall Street financial houses, and his New York breakfast meeting with multibillionaire George Soros (a key Russian player) just as the Russian collapse was underway.
Williamson tells an interesting story of Gore's response to the IMF/World Bank/USAID plunder of U.S. taxpayers for the purpose of hobbling Russia.
By March 1999, Russia was now a financial basket case, and billions, if not tens of billions of U.S. taxpayer-backed loans had vanished into the secret bank accounts of both Russian and American gangster capitalists, and the news was starting to make little vibrations on Capitol Hill. "The U.S. administration's response to the debacle was repulsively similar to a typical Bill Clinton bimbo-eruption operation: Having ruined Russia by cosseting her in debt, meddling ignorantly in her internal affairs, and funding a drunken usurper, his agents denied all error and slandered ('slimed') her," writes Williamson.
"Pundits and academics joined government officials in bemoaning Mother Russia's thieving ways, her bottomless corruption and constant chaos, all the while wringing their soft hands with a schoolmarm's exasperation. Russia's self-appointed democracy coach Strobe Talbott ('Pro-Consul Strobe' to the Russians) would get it right. An equally sanctimonious Albert Gore - the same Al Gore who'd been so quick to return the CIA's 1995 report detailing Viktor Chernomyrdin's and Anatoly Chubais' personal corruption with the single word 'Bullshit' scrawled across it - took the low road and sniffed that the Russians would just have to get their own economic house in order and cut their own deal with the IMF. . . ."
The cost to the American taxpayers of Clinton regime bailouts in a three-and-a-half-year period, Williamson notes, is more than $180 billion! The "new financial architecture" Clinton has erected, she writes, "isn't new at all, but rather something the international public lenders have been wanting for decades, i.e., an automatic bailout for their own bad practices."
As the extent of the corruption of the Clinton-Yeltsin "reform" plan for Russia unfolded last year, with the attendant Bank of New York scandal, the mysterious death of super banker Edmond Safra in his Monte Carlo penthouse, the collapse of the Russian stock market, and the whiplash effect in Southeast Asia, Congress was pressed to hold hearings.
What resulted, as Williamson accurately narrates it, was just a smoke screen, show hearings that barely rose above the seriousness of a Gilbert and Sullivan farce - though they did result in proposed new domestic banking laws that, if passed, will effectively make banks another federal police force responsible for reporting to the U.S. government the most minute financial transactions of U.S. citizens.
Double Effect
In this regard, it is instructive to quote Williamson at length: "If the FBI, [Manhattan District Attorney] Robert Morgenthau, or Congress were serious about getting to the bottom of the plundering of Russia's assets and U.S. taxpayers' resources, they would show far more professional interest in exactly what was said and agreed in the private meetings [U.S. Treasury secretary] Larry Summers, Strobe Talbott, and [former Treasury Secretary] Robert Rubin conducted with Anatoly Chubais [former Russian finance minister, who oversaw the distribution and sale of Russian industries], and Sergie Vasiliev [Yeltsin's principal legal adviser, and a member of the Chubais clan], and later Chubais again in June and July of 1998.
"Instead of allowing Larry Summers to ramble casually in response to questions at a banking committee hearing, the Treasury secretary should be asked exactly who suckered him - his Russian friends, his own boss [former Harvard associate Robert Rubin, his boss at Treasury who was once cochairman at Goldman Sachs], or private sector counterparts of the Working Committee on Financial Markets [a White House group whose membership is drawn from the country's main financial and market institutions: the Fed, Treasury, SEC, and the Commodities & Trading Commission]. . . . Or did he just bungle the entire matter on account of wishful thinking? Or was it gross incompetence?
"The FBI and Congress ought to be very interested in establishing for taxpayers the truth of any alleged 'national security' issues that justified allowing the Harvard Institute of International Development to privatize U.S. bilateral assistance. It too should be their brief to discover the relationship between the [Swedish wheeler-dealer and crony of Sachs, Anders] Aslund/Carnegie crowd and Treasury and exactly what influence that relationship may have had on the awarding of additional grants to Harvard without competition. On what basis did Team Clinton direct their financial donor, American International Group's (AIG) Maurice Greenberg (a man nearly as ubiquitous as any Russian oligarch in sweetheart public-funding deals), to Brunswick Brokerage when sniffing out a $300 million OPIC guarantee for a Russian investment fund. . . . And why did Michel Camdessus [who left the presidency of the IMF earlier this year] announce his sudden retirement so soon after Moscow newspapers reported that a $200,000 payment was made to him from a secret Kremlin bank account? . . .
"American and Russian citizens can never be allowed to learn what really happened to the billions lent to Yeltsin's government; it would expose the unsavory and self-interested side of our political, financial, and media elites. . . . Instead, the [House] Banking Committee hearings will use the smoke screen of policing foreign assistance flows to pass legislation that will effectively end U.S. citizens' financial privacy while making them prisoners of their citizenship. . . . The Banking Committee will use the opportunity the Russian dirty money scandal presents to reanimate the domestic 'Know Your Customer' program, which charges domestic banks with monitoring and reporting on the financial transactions in which middle-class Americans engage. This data is collected and used by various government agencies, including the IRS; meaning that if a citizen sells the family's beat-up station wagon or their 'starter' home, the taxman is alerted immediately that the citizen's filing should reflect the greater tax obligation in that year of the sale. . . . Other data on citizens for which the government has long thirsted will also be collected by government's newest police force, the banks. . . ."
You see, as this book explains, the Clinton's Russia policy did not just plunder Russians, leaving them destitute while creating a new and ruthless class of international capitalist gangsters at U.S. taxpayer expense; it had the double consequence of bringing all Americans deeper into the bankers' New World Order by increasing their debt load, decreasing their privacy, and restricting their civil rights. If only Americans cared.
|
|
|
Apr 27, 2017 | www.nakedcapitalism.com
Posted on April 27, 2017 by Yves Smith Yves here. At the end, Ames explains why this sudden handwringing about Russian inequality is newsworthy:Without any of this context, it's as though Russia's extremes of inequality that Credit Suisse just reported on suddenly appeared out of nowhere, as a manifestation of Vladimir Putin's innate evil. As though nothing preceded him-the 1990s had never happened, and our Establishment has always sincerely cared about how Russians must suffer from inequality and corruption. Erasing history like this has a funny way of making America look exceptionally good, and Russia look exceptionally bad.
As anyone who knows a smidge about this sordid history could tell you, the US's neoliberal reforms set the stage for a plutocratic land grab, with members of the Harvard team advising the State Department feeding at the trough in a big way. As we've written, the fact that Harvard paid $26.5 million in fines, yet Larry Summer not merely failed to sanction the professor who headed the team, his personal friend Andrei Shleifer, but actually protected him was the proximate cause of the ouster of Summers as Harvard president .
By Mark Ames, founding editor of the Moscow satirical paper The eXile and co-host of the Radio War Nerd podcast with Gary Brecher (aka John Dolan). Subscribe here . Originally published at The Exiled
The Guardian just published a piece on Russia's inequality problem - first and worst in the world, according to a new Credit Suisse report . Funny to see Credit Suisse wringing its hands over Russian inequality, given that bank's active complicity in designing and profiting off the privatization of Russia in the early-mid 1990s. Shortly before Credit Suisse arrived in Russia, it was the most equal country on the planet; a few years after Credit Suisse arrived and pocketed up to hundreds of millions in profits, Russia was the most unequal country on earth, and it's pretty much been that way since.
Credit Suisse's new Russia branch was set up in 1992, and it was led by a young twenty-something American banker named Boris Jordan, the grandson of wealthy White Russian emigres. Jordan was key to the bank's success, thanks to his cozy relationships with Russia's neoliberal "young reformers" in charge of privatizing the former Communist country. In the first wave of voucher privatization-when all Russians were issued vouchers which they could then either convert into shares in a newly-privatized company, or sell off-Credit Suisse's Boris Jordan gobbled up 17 million of Russia's privatization vouchers, over 10 percent of the total.
Inside connections were the key. While working for Credit Suisse, Jordan advised the Yeltsin government on how to implement its Russia's disastrous voucher privatization scheme. Jordan worked together with the two of the most powerful US-backed Russian free-marketeers: Prime Minister Yegor Gaidar, architect of the shock therapy program that led to the mass impoverishment of tens of millions of Russians; and Anatoly Chubais, architect of Russia's privatization program, which created Russia's new billionaire oligarch class. Gaidar's shock therapy confiscated wealth from the masses; Chubais' privatization concentrated wealth in a few hands. And Jordan's Credit Suisse advised, traded off, and profited from this wealth transfer. This was the trio that played a central role in creating the inequality that Credit Suisse is now wringing its hands over. (You can read an interview with Jordan about how he co-advised the voucher implementation in 1992, which is stunning for a lot of reasons- he admits they sped up its implementation of voucher privatization to make sure that Russia's parliament, i.e. representative democracy, couldn't interfere with it. Democracy was not something anyone involved in Russia's privatization in the 1990s gave a shit about.)
The conflicts-of-interest here were so over-the-top, they were almost impossible to wrap your head around: Credit Suisse banker Boris Jordan helped implement the voucher privatization scheme with Russia's top political figures; and Credit Suisse massively profited off this same privatization scheme. And it was all done with the full backing and support of the US Treasury Department and the IMF.
(Another major beneficiary of Russian privatization vouchers was a murky hedge fund run by the billionaire Chandler brothers. They made a killing snapping up vouchers cheap, converting them into stakes in key Russian industries, and selling their stakes for huge profits. I wrote about them a couple of years ago because one of the Chandler brothers plowed some of his Russia loot into something called the Legatum Institute -a Dubai-based neocon front group that's been bankrolling the "Russia disinformation panic!" for several years now, issuing report after report after report on the Kremlin disinformation scare by their protege Peter Pomerantsev . You have to let these vulture-capitalist billionaires wet their beaks a little, or they'll raise an army of human rights activists to regime-change your ass.)
Shock therapy, first implemented in 1992 and not really ended until Russia's devastating financial crash in 1998, was politically useful in that by confiscating the Russian middle-class's and lower-class's savings, it created a massively unequal society. And that alone drove Russia further from its Communist recent past, which was the political goal that justified everything.
In 1994, this same young Credit Suisse banker, Boris Jordan, told Forbes' Paul Khlebnikov about a scheme he was trying to sell to the Yeltsin regime. It was called "loans-for-shares" and when it was finally adopted at the end of 1995, it resulted in what many considered the single largest plunder of public wealth in recorded history: The crown jewels of Russian industry-oil, gas, natural resources, telecoms, state banks-given away to a tiny group of connected bankers. It was this scheme, first devised by a Credit Suisse banker, that created Russia's world-famous oligarchy.
The scheme went something like this: The Yeltsin regime announced in late 1995 auctions under which bankers would lend the government money in exchange for "temporary" control over the revenue streams of Russia's largest and most valuable companies. After a period, the government would "repay" the "loans" and the banks would give the their large stakes back to the government.
In reality, every single "auction" was rigged by the winning bank, which paid next to nothing for its control over an oil company/nickel company/etc. Even the little money paid by this bank was often stolen from the state. That's because Russia used a handful of private banks as authorized treasury institutions to transfer government salaries and other funds around the country. This allowed the same bankers who were authorized as state treasury banks to keep those funds for themseles rather than distribute them to the teachers, doctors and scientists as salaries-so they did what was in their rational self-interest and kept the money, delaying salary payments for months or even years at a time, while they used the funds for themselves to speculate, or to buy up assets in auctions they rigged for themselves. It was pure libertarian paradise on earth-everything von Hayek and von Mises dreamed of-in practice.
By the time the loans-for-shares was actually put into effect in late 1995, Credit Suisse's Boris Jordan joined up with an anointed banker-oligarch, Vladimir Potanin, to set up their own investment bank, Renaissance Capital. They raised their first private equity fund, Sputnik Capital-with George Soros and Harvard University as co-investors-and Sputnik Capital went on to take advantage of the loans-for-shares investment opportunities, which had even more help from the fact that Yeltsin made Potanin his Finance Minister in 1996.
This sudden mass wealth transfer from the many to the few had a devastating effect on Russia's population. Inflation in the first two years of shock therapy and voucher privatization ran at 1,354% in 1992, and 896% in 1993, while real incomes plunged 42% in 1992 alone; real wages in 1995 were half of where they were in 1990 (pensions in 1995 were only a quarter in real terms of where they were in 1990). According to very conservative official Russian statistics, GDP plunged 44% from 1992-1998 - others put the GDP crash even higher, 50% or more. By comparison the Soviet GDP fell 24% during its war with Nazi Germany, and the US's GDP fell 30% during the Great Depression. So what happened in the 1990s was unprecedented for a major developed country-by the end of the decade and all of the Washington/financial industry-backed reforms, Russia was a basket case, a third-rate country with an even bleaker future. Capital investment had collapsed 85% during that decade-everyone was stripping assets, not investing in them. Domestic food production collapsed to half the levels during perestroika; and by 1999, anywhere from a third to half of Russians relied on food grown in their own gardens to eat. They'd reverted to subsistence farming after a decade of free market medicine.
All of this had a catastrophic effect on Russians' health and lives. Male Russian life expectancy dropped from 68 years during the late Soviet era, to 56 in the mid-1990s, about where it had been a century earlier under the Tsar. Meanwhile, as births plunged and child poverty and malnutrition soared, Russia's death-to-birth ratio reached levels not seen in the 20th century. According to Amherst economist David Kotz, over 6 million Russians died prematurely during the US-backed free-market reforms in the 1990s. What's odd is how little pity or empathy has ever been shown for those Russians who were destroyed by the reforms we backed, advised funded, bribed, coerced, and were accessory to in every way. They weren't entirely America's fault; Yeltsin and his US-backed "market bolsheviks" had their own cynical, ideological and political reasons to restructure Russia's political economy in the most elitist, hierarchical unequal manner possible. But if the US had acted differently, given how much influence the Clinton Administration had with the Yeltsin regime, things could certainly have turned out differently. The point is-they didn't. The inequality was the surest sign of success. It only became something to wring our hands about later, a soft-power weapon to smack them with, now that we have little to zero influence over Russia.
It's interesting that our literature is filled with plenty of official empathy for Weimar German victims of that country's hyperinflation, but nothing of the sort for Russians of the 1990s, who were, it was argued, being ennobled and lifted up by the linear thread of liberal history-they were heading towards the bright market-based future, can't let a few knocks and scratches distract us! Can't make an omelet without cracking a few eggs, as the West's Stalin apologists used to say.
Here, for example, is a typical cheerleader story about the new Russian inequality, published in Businessweek in 1996-a fluff job on Boris Jordan's Russian backer, Vladimir Potanin. Notice how the headline/subheader make clear that the hero of this narrative is the Russian billionaire, and the villains are the "angry masses" of poor envious Russians:
Temporarily Sane , April 27, 2017 at 3:21 amThe Battle for Russia's Wealth
Can hugely rich new capitalists weather a backlash from the angry masses?
Russia's answer to J.P. Morgan could not be less like the eccentric, bulbous-nosed original. Vladimir O. Potanin is a shy, athletic man of 35. Holding court in his rosewood-paneled office on Moscow's Masha Poryvaeva Street, the president of Oneximbank quietly gives instructions to two strapping bodyguards at his door. Cool and controlled, Potanin is a standout in a group of dynamic businessmen who have seized huge slices of the economy.
Which reads a lot like this fluff job in the Los Angeles Times, published around the same time, headlined "Whiz-Kid Banker Named to Russian Cabinet" . Which reads a lot like a Businessweek followup up with even more shameless hagiography, headlined "The Most Powerful Man in Russia" . You can try reading that last one if you want, but I recommend keeping a vomit bag close by-and a cyanide pill for good measure.
So this is the sordid and depressing backstory to the Credit Suisse report on Russian inequality-the story you definitely won't and don't read about in Credit Suisse's own account. They're a bank; their reports, while perhaps truthful, are far from The Truth-more like marketing pamphlets than serious scholarship.
Credit Suisse made a killing in Russia in the early-mid 1990s, dominating two-thirds of Russia's capital markets deals-while tens of millions sank into desperate poverty. That too is inequality.
Jordan himself remained a powerful celebrity-investor through the early Putin era. In 1997, Boris Jordan was caught up in a major scandal surrounding the privatization of the national telecoms concern, Svyazinvest-which was won by a consortium that included Soros, Harvard, and a bank owned by Finance Minister Potanin and his partner, Mikhail Prokhanov, who today owns the Brooklyn Nets. The scandal was this: The government official in charge of auctioning off the telecoms to Soros-Harvard-Potanin-Jordan consortium, Alfred Kokh, had been given a shady $100,000 book advance by a shady Swiss company connected to Potanin's bank. The book had not been written; the advance was unusually high; and the Swiss "publisher" which had never published a book before was itself incorporated and led by none other than Boris Jordan's cousin, Tikhon Troyanos.
The revelations led to scandals, and Yeltsin was forced to fire his privatization chief Alfred Kokh, along with a handful of other corrupt US-backed "young reformers" caught getting paid on the eve of a rigged auction.
But what did it really matter? What really mattered to everyone who matters was the political structure of Russia's economy. No longer egalitarian, no longer a threat to the neoliberal order-it now had the world's most unequal society, and that was a good thing, because the new elites would identify their interests more with the interests of their Davos counterparts than with the interests of the "backwards" Russian masses, whose fate was their problem, not ours. This is when racist caricatures of the "backwards" Russian masses help-you don't have to empathize with them, history is sending them to the trash heap of history, not you. The world was safe for business, and that was all the affirmation anyone needed to hear.
At the end of the Yeltsin era, I visited the sprawling suburban Moscow "compound" owned by Potanin and his banking partner, Mikhail Prokhorov, as well as Renaissance Capital-the bank first founded with Boris Jordan in the mid-1990s. It was a huge gated compound with several buildings, a mini-hotel, and a nightclub/concert hall. One of the first things I saw entering the gaming hall building was two familiar-looking men in track suits playing backgammon: Vladimir Potanin, billionaire oligarch; and Alfred Kokh, the fired, disgraced head of Yeltsin's privatization committee.
The financial crisis of 1998 left Russia's in complete tatters, and Boris Jordan was never the big shot that he had been before. His real value was providing cover for the new boss Vladimir Putin as he re-centralized power under Kremlin control. The first upstart oligarch that Putin took down was Vladimir Gusinsky. He was briefly jailed and then exiled to Israel. His once-respected opposition TV station, NTV, was "bought" by Gazprom, and Gazprom, needing a western-friendly face for its hostile takeover, hired Boris Jordan as the new general director of the network-and his old partner-in-crime, Alfred Kokh, the disgraced ex-privatization chief, as chairman of NTV's board. Almost immediately, 25 NTV journalists- half the staff- "resigned" . Jordan's job was to blunt western criticism of the Kremlin as it destroyed the lone critical voice on Russian television, and two years later, his job done, he moved on.
Today Jordan still runs the Sputnik Fund , such as it is-mostly a web site as far as I can tell. And he is listed as the founder of New York University's "NYU Jordan Center for the Advance Study of Russia" . He looks like such a minor figure now.
Without any of this context, it's as though Russia's extremes of inequality that Credit Suisse just reported on suddenly appeared out of nowhere, as a manifestation of Vladimir Putin's innate evil. As though nothing preceded him-the 1990s had never happened, and our Establishment has always sincerely cared about how Russians must suffer from inequality and corruption. Erasing history like this has a funny way of making America look exceptionally good, and Russia look exceptionally bad.
Lambert Strether , April 27, 2017 at 4:50 amGreat piece. Mark Ames and his former eXile comrades Yasha Levine and Matt Taibbi write some of the most honest and ideologically neutral critiques of the current political and economic clusterfuck. The Guardian, OTOH, is pure neoliberal establishment propaganda. It really went downhill after Katherine Viner replaced Allan Rusbridger as chief editor. If the Snowden affair happened today they would probably be loudly calling for his arrest.
Lambert Strether , April 27, 2017 at 4:49 amSeconded!
ambrit , April 27, 2017 at 5:14 amOn the headline: "Well, I should hope so!"
Carolinian , April 27, 2017 at 9:45 amWhy do I get the feeling that this "playbook" is being resurrected to manage a "privatization" of the American "safety net?" When it happened in Russia, the Russians ended up with Vladimir Vladimirovitch rising to stem the tide of officially sanctioned criminality. One could say that Russia has had precious little experience with "representational" governance, and thus a return to some form of autocracy was understandable. America, on the other hand, has, supposedly, a storied history of representative governance. So far, that "story" isn't showing signs of turning out so well for the "angry masses" of the Homeland. What, then, will America "put up with" to see the mere appearance of social justice? This is where the supposed "opposition" party, the Democrats, have fallen down. They aren't even "talking" a good game today. The longer these tensions continue, and increase, the greater the damage from the eventual unwinding will be.
Mark P. , April 27, 2017 at 2:22 pmThe job of the Dems is to herd the sheep in the right direction. They do this by pretending to be lefties while keeping the true alternative, socialism, in its box. One could argue the whole history of the 20th century after WW1 was about keeping socialism in its box. Funny how the end of the Evil Empire–at least notionally committed to socialism–has made the situation in the West so much worse. It's almost a though those 20th century progressive reforms were only intended to keep the commies at bay. Now the plutocrats don't have to pretend any more.
Thuto , April 27, 2017 at 6:54 amAmbrit wrote: 'Why do I get the feeling that this "playbook" is being resurrected to manage a "privatization" of the American "safety net?"
Because many of the same sociopaths who learned how to loot a collapsing empire after the fall of the USSR took the lessons learned and applied them over here.
'The Harvard Boys Do Russia'
https://www.thenation.com/article/harvard-boys-do-russia/'Harvard Mafia, Andrei Shleifer and the Economic Rape of Russia'
http://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtmlDavid Barrera , April 27, 2017 at 9:22 amWell this is to be expected isn't it. The same banks that go around the world selling their brand of "market based reforms" then turn around and wring their hands when the post-reform economy has been stratified in favour of the 1%. It's almost as if registering their concern about the inequality levels they had a hand in creating somehow assuages their guilt. In my own country South Africa, one of the most unequal societies in the world, we are drowning in a constant, ad nauseum barrage of media commentary about how orthodox neoliberal thinking is the only thing that will save the country. Such stories of how orthodoxy itself plunged a country like Russia into economic anarchy are sadly lacking, in fact speaking ill of orthodoxy is anathema and one suspects that journalists are either infected with terminal gullibility vis a vis neoliberal thinking or are towing the line to stay in their jobs
Fool , April 27, 2017 at 10:50 amThanks for this great article It looks like Popper's positivism did wonders for George Soros. As he would say: "I made a killing". Sure nothing a couple of his humanitarian NGO's can not fix!
Martin Finnucane , April 27, 2017 at 12:19 pmThis is terrific - and the Yeltsin-Clinton photograph is too perfect.
I suppose we'll never forgive the Russians for how bad they let neoliberal capitalism look.
Susan the other , April 27, 2017 at 12:25 pmI suppose we'll never forgive the Russians for how bad they let neoliberal capitalism look.
I think that in some circles there's a deeply seated viral antagonism toward Russia and Russians that goes far beyond, and is far more deeply laid, than the liberal-v-not-liberal clash of civilizations du jour. Like herpes, this particular disease bubbles to the surface under certain conditions, such as a the Ukraine coup. Perhaps the virus first broke out around the time of the Venetian Sack of Constantinople ?
Ask a Russian. If you ask a Western liberal and you'll get nothing but a blank stare. Of course Russia bad . That's all we need to known. Full stop. My Western liberal conscience is clean.
The rank hypocrisy involved reminds one of Obama's gratuitous Russia bashing . And who is more iconically Western, more iconically liberal, than President Obama? Obama is nothing if not cool, and Western liberalism is coolness itself.
PlutoniumKun , April 27, 2017 at 12:39 pmI've wondered what a better alternative would have looked like – instead of looting and refitting Russia to join a neoliberal capitalist world. Wasn't it Jeffrey Sachs, now reformed, who said shock therapy would be the fastest and least painful way to get Russia up and running? And Putin has been a tightrope walker all along and seems to be very sensible. Almost too sensible. He has his nationalist opponents on one side (the late, great Boris Nemtsov was one) who say he is giving Russian wealth away to the West and his western-neoliberal detractors one the other side who call him a nationalist tyrant. In between he has the backing of the Russian people. Very agile.
JohnnyGL , April 27, 2017 at 1:58 pmThe obvious alternative way would be the various routes followed by the former Iron Curtain countries. Most had some form of shock therapy, if none as extreme as that in Russia, probably because they don't have the easy to grab mineral resources. None have done as well as hoped, but some have been moderately successful by steering a middle course – The Czech Republic and Poland have done reasonably well over the past 20 years. In general, I would say that those which opted for slower and gentler market reform did better than the 'get it over quick' ones. The one country that tried not to change – Belarus – is still standing, if a bit of a basket case.
JohnnyGL , April 27, 2017 at 12:31 pmKeep in mind the EU played a much more constructive role back then. The elites at the time really wanted integration and modernization to work, especially in the Central European countries like those ones you listed.
Martin Finnucane , April 27, 2017 at 12:43 pmNot directly related, but for wider context, very similar programs happened in Mexico during the Salinas administration (1988-1994) around the same time. NAFTA in 1994 was the 'reward' for the Mexican elites doing as they were told.
https://www.jacobinmag.com/2014/10/privatizing-mexico/
Here's an old NYT article which aims for a tone of 'cheerleading with reservations', but does give you a sense of the corruption involved during the biddings, especially around TelMex and the resulting problems.
Of course, we know how the story ends in Mexico with the 1994-5 Tequila Crisis, much like the story ended in Russia with the 1998 default which crushed the LTCM hedgies.
Susan the other , April 27, 2017 at 12:32 pmAlso, Carlos Slim became the richest man in the world. Meritocracy rocks! Go suck a heuvo gordo, you socialistas sucias!
PKMKII , April 27, 2017 at 1:40 pmI've wondered what a better alternative would have looked like – instead of looting and refitting Russia to join a neoliberal capitalist world. Wasn't it Jeffrey Sachs, now reformed, who said shock therapy would be the fastest and least painful way to get Russia up and running? And Putin has been a tightrope walker all along and seems to be very sensible. Almost too sensible. He has his nationalist opponents on one side (the late, great Boris Nemtsov was one) who say he is giving Russian wealth away to the West and his western-neoliberal detractors one the other side who call him a nationalist tyrant. In between he has the backing of the Russian people. Very agile.
My one minor quibble is the assertion that those in the West put the blame of the downfall of the Russian masses on the masses themselves. Most of those in the West are either ignorant, or in denial, of how bad it got for the average Russian in the aftermath of the fall of the Soviet Union. They were taught that the USSR was a hellhole where everyone lived in horrific poverty except for the party leaders. So they saw the horrible conditions under Yeltsin and company as a continuation of how things had always been. Some even argue it got better, painting any report showing things were better under the USSR as communist propaganda.
|
|
|
Apr 04, 2017 | economistsview.typepad.com
Peter K. , April 03, 2017 at 01:31 PMPGL puts the blame on Yeltsin and this is what Stiglitz writes:pgl -> Peter K.... , April 03, 2017 at 04:30 PM"I believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia's transition. This framework's influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work."
Larry Summers and Jeffrey Sachs were involved in this. It would be nice if they wrote mea culpas.
"Many in Russia believe that the US Treasury pushed Washington Consensus policies to weaken their country. The deep corruption of the Harvard University team chosen to "help" Russia in its transition, described in a detailed account published in 2006 by Institutional Investor, reinforced these beliefs.
I believe the explanation was less sinister: flawed ideas, even with the best of intentions, can have serious consequences. And the opportunities for self-interested greed offered by Russia were simply too great for some to resist. Clearly, democratization in Russia required efforts aimed at ensuring shared prosperity, not policies that led to the creation of an oligarchy."
Just look at what the West did to Iraq. Like Stiglitz I think it is more incompetence and ideology than a sinister plan to destroy Iraq and Russia. And we are reaping the results of that incompetence.
2008 was also incompetence, greed and ideology not some plot to push through "shock doctrines."
If the one percent were smart they would slowly cook the frog in the pot, where the frog doesn't notice, instead of having these crises which backfire.
Nice cherry picking especially for someone who never read his chapter 5 of that great 1997 book.libezkova -> pgl... , April 03, 2017 at 10:40 PMThe book is great, the article is junk.As Paine aptly said (in best Mark Twain style):
"Too much [neo]liberal swamp gas"
|
|
|
Apr 04, 2017 | economistsview.typepad.com
anne , April 03, 2017 at 10:01 AMhttps://www.project-syndicate.org/commentary/illiberal-stagnation-russia-transition-by-joseph-e--stiglitz-2017-04anne -> anne... , April 03, 2017 at 10:01 AMApril 2, 2017
Illiberal Stagnation
By JOSEPH E. STIGLITZI believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia's transition. This framework's influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work....
https://en.wikipedia.org/wiki/Washington_Consensuspgl -> anne... , April 03, 2017 at 10:18 AMThe term Washington Consensus was coined in 1989 by English economist John Williamson to refer to a set of 10 relatively specific economic policy prescriptions that he considered constituted the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions such as the International Monetary Fund (IMF), World Bank, and the US Treasury Department. The prescriptions encompassed policies in such areas as macroeconomic stabilization, economic opening with respect to both trade and investment, and the expansion of market forces within the domestic economy.
- Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
- Redirection of public spending from subsidies toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
- Tax reform, broadening the tax base and adopting moderate marginal tax rates;
- Interest rates that are market determined and positive (but moderate) in real terms;
- Competitive exchange rates;
- Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
- Liberalization of inward foreign direct investment;
- Privatization of state enterprises;
- Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
- Legal security for property rights.
"privatization, no matter how it was done, with speed taking precedence over everything else".RGC -> pgl... , April 03, 2017 at 10:34 AMIt does matter how it is done as Stiglitz, Dani Rodrik, and even that ProMarket blog often point out. It was done very poorly under Yeltsin.
It was done according to the "expert" advice of deregulatin' Larry's gang from Harvard.RGC -> RGC... , April 03, 2017 at 10:46 AMDoes deregulatin' Larry still have a job?Peter K. -> RGC... , April 03, 2017 at 01:24 PMWhy?
"It was done according to the "expert" advice of deregulatin' Larry's gang from Harvard."Peter K. -> Peter K.... , April 03, 2017 at 01:33 PMYes PGL blames Yeltsin but it was the Western advisers who forced disastrous shock therapy on Russia.
See the IMF, Europe and Greece for another example. No doubt PGL blames the Greeks. He always blames the victims.
PGL blames Yeltsin but even Stiglitz writes that it was the Washington Consensus which was to blame for the poor transition and disastrous collapse of Russia. Now we are reaping the consequences. Just like with Syria, ISIL and Iraq.pgl -> Peter K.... , April 03, 2017 at 04:28 PMYep - you still have not read what he wrote. As usual.pgl -> Peter K.... , April 03, 2017 at 04:27 PMWTF? The IMF may have given bad advice but Yeltsin ran the show. And if you think Yeltsin was the victim - then you are really lost.anne -> pgl... , April 03, 2017 at 11:15 AM"No doubt PGL blames the Greeks."
You do lie 24/7. Pathetic.
Suppose though the matter with privatization is not so much speed but not understanding what should not be subject to privatizing, such as soft and hard infrastructure.anne -> anne... , April 03, 2017 at 10:46 AMThat a Washington Consensus approach to Russian development proved obviously faulty is important because I would argue the approach has repeatedly proved faulty from Brazil to South Africa to the Philippines... When the consensus has been turned away from as in Brazil for several years the development results have dramatically changed but turning from the approach which allows for severe concentrations of wealth has proved politically difficult as we find now in Brazil.anne -> anne... , April 03, 2017 at 10:48 AMhttps://fred.stlouisfed.org/graph/?g=cad0anne -> anne... , April 03, 2017 at 10:55 AMAugust 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil, South Africa and Russia, 1990-2015
(Percent change)
https://fred.stlouisfed.org/graph/?g=cacXAugust 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil, South Africa and Russia, 1990-2015
(Indexed to 1990)
The range in real per capita GDP growth from 1990 to 2015 extends from 15.8% to 19.8% to 41.1% to 223.1% to 789.1%. This range needs to be thoroughly analyzed in terms of reflective policy.anne -> anne... , April 03, 2017 at 10:49 AMhttps://fred.stlouisfed.org/graph/?g=cad4anne -> anne... , April 03, 2017 at 11:00 AMNovember 1, 2014
Total Factor Productivity at Constant National Prices for China, India, Brazil, South Africa and Russia, 1990-2014
https://fred.stlouisfed.org/graph/?g=cad7November 1, 2014
Total Factor Productivity at Constant National Prices for China, India, Brazil, South Africa and Russia, 1990-2014
(Indexed to 1990)
The range in total factor productivity growth or decline from 1990 to 2014 extends from a decline of - 16.9% to - 12.2% to - 5.1% to growth of 40.9% and 76.4%. Again, this range needs to be thoroughly analyzed in terms of reflective policy.anne -> anne... , April 03, 2017 at 11:10 AMThe persuasiveness of the Washington Consensus approach to development strikes me as especially well illustrated by the repeated, decades-long insistence by Western economists that Chinese development is about to come to a crashing end. The insistence continues with an almost daily repetition in the likes of The Economist or Financial Times.I would suggest the success of China thoroughly studied provides us with remarkable policy prescriptions.
|
|
|
Apr 04, 2017 | economistsview.typepad.com
DrDick -> pgl... April 03, 2017 at 11:01 AMA great piece by Stiglitz.pgl -> DrDick ... April 03, 2017 at 12:29 PMI've been encouraging folks to read his 1997 book - in particular chapter 5. When I do, the Usual Suspects decided to attack by questioning Stiglitz's credential.paine -> DrDick ... , April 03, 2017 at 04:43 PMOne of them cited Wikipedia noting it relied on World Bank research. Of course, Stiglitz headed the World Bank back then. Go figure.
Excellent book sent Ken Rogoff on a rampagepaine -> paine... , April 03, 2017 at 04:46 PMRead open letter to Stiglitzanne -> paine... , April 03, 2017 at 06:13 PMhttp://www.imf.org/external/np/vc/2002/070202.htmanne -> DrDick ... , April 03, 2017 at 06:31 PMAn Open Letter *
By Kenneth Rogoff,
Economic Counsellor and Director of Research,
International Monetary FundTo Joseph Stiglitz,
Author of "Globalization and Its Discontents"Washington D.C., July 2, 2002
* Used as opening remarks at a June 28 discussion of Mr. Stiglitz's book at the World Bank, organized by the World Bank's Infoshop
http://www.nybooks.com/articles/2002/08/15/globalization-stiglitzs-case/paine -> DrDick ... , April 03, 2017 at 04:22 PMAugust 15, 2002
Globalization: Stiglitz's Case By Benjamin M. Friedman
Globalization and Its Discontents by Joseph E. Stiglitz
Too much liberal swamp gas [In Stiglitz's book]paine -> pgl... , April 03, 2017 at 04:20 PMThe obvious contrast does not existpaine -> paine... , April 03, 2017 at 04:26 PMBut id conjecture the Deng path trumps the Yeltsin path
Nothing liberal values can helppaine -> paine... , April 03, 2017 at 04:31 PMDevelopment is not humanistic or [is] about ballot box choices
Clio sets harsh conflicts in our path albeit of our own Making
I love joe. His technical intuition is peerless. But he is mushy at heart. Social values involved. Unlike say chomskyanne -> anne... , April 03, 2017 at 06:22 PMhttps://fred.stlouisfed.org/graph/?g=cacKanne -> anne... , April 03, 2017 at 06:27 PMAugust 4, 2014
Real per capita Gross Domestic Product for China and Russia, 1990-2015
(Percent change)
https://fred.stlouisfed.org/graph/?g=cacO
August 4, 2014
Real per capita Gross Domestic Product for China and Russia, 1990-2015
(Indexed to 1990)
https://fred.stlouisfed.org/graph/?g=cacQlibezkova -> paine... , April 03, 2017 at 08:28 PMNovember 1, 2014
Total Factor Productivity at Constant National Prices for China and Russia, 1990-2014
https://fred.stlouisfed.org/graph/?g=cacR
November 1, 2014
Total Factor Productivity at Constant National Prices for China and Russia, 1990-2014
(Indexed to 1990)
"But id conjecture the Deng path trumps the yeltsin path"point -> pgl... , April 03, 2017 at 06:28 PMTrue.
It may eventually prove to be generous to describe Russia's misfortune as "the legacy of the flawed Washington Consensus that shaped Russia's transition" according to Stiglitz. It may prove rather to be "the legacy of *intentionally* flawed consensus".
|
|
|
Apr 03, 2017 | economistsview.typepad.com
pgl , April 03, 2017 at 09:52 AMStiglitz returns to the issue of why post Soviet Union Russia has done so poorly in terms of economics(Illiberal Stagnation by Joseph E. Stiglitz - Project Syndicate):RGC -> pgl... , April 03, 2017 at 10:11 AM"In terms of per capita income, Russia now ranks 73rd (in terms of purchasing power parity) – well below the Soviet Union's former satellites in Central and Eastern Europe. The country has deindustrialized: the vast majority of its exports now come from natural resources. It has not evolved into a "normal" market economy, but rather into a peculiar form of crony-state capitalism .
Many had much higher hopes for Russia, and the former Soviet Union more broadly, when the Iron Curtain fell. After seven decades of Communism, the transition to a democratic market economy would not be easy. But, given the obvious advantages of democratic market capitalism to the system that had just fallen apart, it was assumed that the economy would flourish and citizens would demand a greater voice. What went wrong? Who, if anyone, is to blame?
Could Russia's post-communist transition have been managed better? We can never answer such questions definitively: history cannot be re-run. But I believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia's transition.
This framework's influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work. Fifteen years ago, when I wrote Globalization and its Discontents, I argued that this "shock therapy" approach to economic reform was a dismal failure.
But defenders of that doctrine cautioned patience: one could make such judgments only with a longer-run perspective. Today, more than a quarter-century since the onset of transition, those earlier results have been confirmed, and those who argued that private property rights, once created, would give rise to broader demands for the rule of law have been proven wrong. Russia and many of the other transition countries are lagging further behind the advanced economies than ever. GDP in some transition countries is below its level at the beginning of the transition."
Stiglitz is not saying markets cannot work if the rules are properly constructed. He is saying that the Yeltsin rules were not as they were crony capitalism at their worse. And it seems the Putin rules are not much better. He mentions his 1997 book which featured as chapter 5 "Who Lost Russia". It still represents an excellent read.
"Shleifer also met his mentor and professor, Lawrence Summers, during his undergraduate education at Harvard. The two went on to be co-authors, joint grant recipients, and faculty colleagues.[5]RGC -> RGC... , April 03, 2017 at 10:26 AMDuring the early 1990s, Andrei Shleifer headed a Harvard project under the auspices of the Harvard Institute for International Development (HIID) that invested U.S. government funds in the development of Russia's economy.
Schleifer was also a direct advisor to Anatoly Chubais, then vice-premier of Russia, who managed the Rosimushchestvo (Committee for the Management of State Property) portfolio and was a primary engineer of Russian privatization. Shleifer was also tasked with establishing a stock market for Russia that would be a world-class capital market.[14]
In 1996 complaints about the Harvard project led Congress to launch a General Accounting Office investigation, which stated that the Harvard Institute for International Development (HIID) was given "substantial control of the U.S. assistance program."[15]
In 1997, the U.S. Agency for International Development (USAID) canceled most of its funding for the Harvard project after investigations showed that top HIID officials Andre Schleifer and Johnathan Hay had used their positions and insider information to profit from investments in the Russian securities markets. Among other things, the Institute for a Law Based Economy (ILBE) was used to assist Schleifer's wife, Nancy Zimmerman, who operated a hedge fund which speculated in Russian bonds.[14]
In August 2005, Harvard University, Shleifer and the Department of Justice reached an agreement under which the university paid $26.5 million to settle the five-year-old lawsuit. Shleifer was also responsible for paying $2 million worth of damages, though he did not admit any wrongdoing
Awards:libezkova -> RGC... , April 03, 2017 at 08:18 PMJohn Bates Clark Medal (1999)
"He has held a tenured position in the Department of Economics at Harvard University since 1991 and was, from 2001 through 2006, the Whipple V. N. Jones Professor of Economics."
My impression is that Andrei Shleifer was a marionette, a low level pawn in a big game.libezkova -> RGC... , April 03, 2017 at 07:51 PMThe fact that he was a greedy academic scum, who tried to amass a fortune in Russia probably under influence of his wife (his wife, a hedge fund manager, was GS alumnae and was introduced to him by Summers) is peripheral to the actual role he played.
Jeffey Sacks also played highly negative role being the architect of "shock therapy": the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large-scale privatization of previously public-owned assets.
In other words "shock therapy" = "economic rape"
As Anne Williamson said:
"Instead, after robbing the Russian people of the only capital they had to participate in the new market – the nation's household savings – by freeing prices in what was a monopolistic economy and which delivered a 2500% inflation in 1992, America's "brave, young Russian reformers" ginned-up a development theory of "Big Capitalism" based on Karl Marx's mistaken edict that capitalism requires the "primitive accumulation of capital". Big capitalists would appear instantly, they said, and a broadly-based market economy shortly thereafter if only the pockets of pre-selected members of their own ex-Komsomol circle were properly stuffed.
Those who hankered for a public reputation were to secure the government perches from which they would pass state assets to their brethren in the nascent business community, happy in the knowledge that they too would be kicked back a significant cut of the swag. The US-led West accommodated the reformers' cockeyed theory by designing a rapid and easily manipulated voucher privatization program that was really only a transfer of title and which was funded with $325 million US taxpayers' dollars. "
See also http://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtml
From the article:"Many in Russia believe that the US Treasury pushed Washington Consensus policies to weaken their country. The deep corruption of the Harvard University team chosen to "help" Russia in its transition, described in a detailed account published in 2006 by Institutional Investor, reinforced these beliefs."
This was not a corruption. This was the intent on Clinton administration. I would think about it as a planned operation.
The key was that the gangster capitalism model was enforced by the Western "Washington consensus" (of which IMF was an integral part) -- really predatory set of behaviors designed to colonize Russia and make is US satellite much like Germany became after WWII but without the benefit of Marshall plan.
Clinton consciously chose this criminal policy among alternatives: kick the lying body. So after Russian people get rid of corrupt and degraded Communist regime, they got under the iron hill of US gangsters from Clinton administration.
My impression is that Clinton was and is a criminal. And he really proved to be a very capable mass murderer. And his entourage had found willing sociopaths within Russian society (as well as in other xUUSR republics; Ukraine actually fared worse then Russia as for the level of plunder) who implemented neoliberal policies. Yegor Gaidar was instrumental in enforcing Harvard-designed "shock therapy" on Russian people. He also create the main neoliberal party in Russia -- the Democratic Choice of Russia - United Democrats. Later in 1990s, it became the Union of Right Forces.
http://www.vdare.com/posts/the-rape-of-russia-explained-by-anne-williamson
Testimony of Anne Williamson
Before the Committee on Banking and Financial Services of the United States House of Representatives
September 21, 1999
In the matter before us – the question of the many billions in capital that fled Russia to Western shores via the Bank of New York and other Western banks – we have had a window thrown open on what the financial affairs of a country without property rights, without banks, without the certainty of contract, without an accountable government or a leadership decent enough to be concerned with the national interest or its own citizens' well-being looks like. It's not a pretty picture, is it? But let there be no mistake, in Russia the West has truly been the author of its own misery. And there is no mistake as to who the victims are, i.e. Western, principally U.S., taxpayers and Russian citizens' whose national legacy was stolen only to be squandered and/or invested in Western real estate and equities markets... ... ...
A lot of people, especially pensioners, died because of Clinton's gangster policies in xUUSR space.
I am wondering how Russian managed to survive as an independent country. The USA put tremendous efforts and resources in destruction of Russian economy and colonizing its by creating "fifth column" on neoliberal globalization.
all those criminal oligarchs hold moved their capitals to the West as soon as they can because they were afraid of the future. Nobody persecuted them and Western banks helped to extract money from Russia to the extent that some of their methods were clearly criminals.
Economic devastation was comparable with caused by Nazi armies, although amount of dead was less, but also in millions.
Questionable figures from the West flowed into Russia and tried to exploit still weak law system by raiding the companies. Some of them were successful and amassed huge fortunes. Some ended being shot. Soros tried, but was threatened to be shot by Berezovsky and choose to leave for the good.
Especially hard hit was military industrial complex, which was oversized in any case, but which was an integral part of Soviet economy and employed many highly qualified specialists. Many of whom later emigrated to the West. At some point it was difficult to find physics department in the US university without at least a single person form xUSSR space (not necessary a Russian)
|
|
|
Mar 31, 2017 | economistsview.typepad.com
JohnH March 31, 2017 at 10:46 AMLarry Summers is going rogue? (But only long after the horse has left the barn!)
"As head of Barack Obama's National Economic Council during 2009 and 2010 at the height of the foreclosure crisis, Larry Summers broke many promises to help homeowners while simultaneously dismissing Wall Street's criminality.
Now, after the Obama administration has left power and Summers has no ability to influence anything, he finds himself "disturbed" that settlements for mortgage misconduct are full of lies.
Those of us who screamed exactly this for years, when Summers might have been able to do something about it, are less than amused."
Of course, the Wall Street Democrats, AKA Democratic partisan hacks that infest this blog, spent years defending Obama for his lax treatment of criminal bankers. (And these same folks were also among the most avid advocates of 'trickle down monetary policy,' which involved the Fed's showering cheap money on its owners, the Wall Street banking cartel and their wealthy clientele, while raising the margin over prime rates to their credit card victims/customers.)
|
|
|
Mar 29, 2017 | economistsview.typepad.com
anne -> RC AKA Darryl, Ron... , March 29, 2017 at 06:17 AMhttps://www.washingtonpost.com/news/wonk/wp/2017/03/27/larry-summers-mnuchins-take-on-artificial-intelligence-is-not-defensible/DrDick -> anne... , March 29, 2017 at 10:45 AMMarch 27, 2017
The robots are coming, whether Trump's Treasury secretary admits it or not
By Lawrence H. Summers - Washington PostAs I learned (sometimes painfully) during my time at the Treasury Department, words spoken by Treasury secretaries can over time have enormous consequences, and therefore should be carefully considered. In this regard, I am very surprised by two comments made by Secretary Steven Mnuchin in his first public interview last week.
In reference to a question about artificial intelligence displacing American workers,Mnuchin responded that "I think that is so far in the future - in terms of artificial intelligence taking over American jobs - I think we're, like, so far away from that [50 to 100 years], that it is not even on my radar screen." He also remarked that he did not understand tech company valuations in a way that implied that he regarded them as excessive. I suppose there is a certain internal logic. If you think AI is not going to have any meaningful economic effects for a half a century, then I guess you should think that tech companies are overvalued. But neither statement is defensible.
Mnuchin's comment about the lack of impact of technology on jobs is to economics approximately what global climate change denial is to atmospheric science or what creationism is to biology. Yes, you can debate whether technological change is in net good. I certainly believe it is. And you can debate what the job creation effects will be relative to the job destruction effects. I think this is much less clear, given the downward trends in adult employment, especially for men over the past generation.
But I do not understand how anyone could reach the conclusion that all the action with technology is half a century away. Artificial intelligence is behind autonomous vehicles that will affect millions of jobs driving and dealing with cars within the next 15 years, even on conservative projections. Artificial intelligence is transforming everything from retailing to banking to the provision of medical care. Almost every economist who has studied the question believes that technology has had a greater impact on the wage structure and on employment than international trade and certainly a far greater impact than whatever increment to trade is the result of much debated trade agreements....
Oddly, the robots are always coming in articles like Summers', but they never seem to get here. Automation has certainly played a role, but outsourcing has been a much bigger issue.Peter K. -> DrDick ... , March 29, 2017 at 01:09 PMI'm becoming increasing skeptical about the robots argument.jonny bakho -> DrDick ... , March 29, 2017 at 05:13 PMThey are all over our manufacturing plants.JohnH -> RC AKA Darryl, Ron... , March 29, 2017 at 06:21 AM
They just don't look like C3POI fear Summers at least as much as I fear robots...Peter K. -> JohnH... , March 29, 2017 at 07:04 AMHe's just a big bully, like our PGL.RC AKA Darryl, Ron -> JohnH... , March 29, 2017 at 07:15 AMHe has gotten a lot better and was supposedly pretty good when advising Obama, but he's sort of reverted to form with the election of Trump and the prominence of the debate on trade policy.
Ditto.Paine -> RC AKA Darryl, Ron... , March 29, 2017 at 09:59 AMTechnology rearranges and changes human roles, but it makes entries on both sides of the ledger. On net as long as wages grow then so will the economy and jobs. Trade deficits only help financial markets and the capital owning class.
There is no limit to jobsRC AKA Darryl, Ron -> Paine... , March 29, 2017 at 12:27 PM
Macro policy and hours regulation
can createWe can both ration job hours And subsidies job wage rates
and at the same time
generate
As many jobs as wantedAll economic rents could be converted into wage subsidies
To boost the per hour income from jobs as well as incentivize diligence skill and creativityWorks for me.yuan -> Paine... , March 29, 2017 at 03:50 PMjobs, jobs, jobs.yuan -> yuan... , March 29, 2017 at 03:51 PMsome day we will discard with feudal concepts, such as, working for the "man". a right to liberty and the pursuit of happiness is a right to income.
tax those bots!
or better yet...collectivize the bots.RGC -> RC AKA Darryl, Ron... , March 29, 2017 at 08:47 AMSummers is a good example of those economists that never seem to pay a price for their errors.Peter K. -> RGC... , March 29, 2017 at 09:36 AMImo, he should never be listened to. His economics is faulty. His performance in the Clinton administration and his part in the Russian debacle should be enough to consign him to anonymity. People would do well to ignore him.
Yeah he's one of those expert economists and technocrats who never admit fault. You don't become Harvard President or Secretary of the Treasury by doing that.RC AKA Darryl, Ron -> RGC... , March 29, 2017 at 12:29 PMOne time that Krugman has admitted error was about productivity gains in the 1990s. He said he didn't see the gains from computers in the numbers and it wasn't and they weren't there at first, but later productivity numbers increased.
It was sort of like what Summers and Munchkin are talking discussing, but there's all sorts of debate about measuring productivity and what it means.
Yeah. I am not a fan of Summers's, but I do like summers as long as it does not rain too much or too little and I have time to fish.
|
|
|
Mar 05, 2017 | economistsview.typepad.com
Larry Summers: Robots are wealth creators and taxing them is illogical : I usually agree with Bill Gates on matters of public policy and admire his emphasis on the combined power of markets and technology. But I think he went seriously astray in a recent interview when he proposed, without apparent irony, a tax on robots to cushion worker dislocation and limit inequality. ....pgl : , March 05, 2017 at 02:16 PM
Has Summers gone all supply-side on his? Start with his title:cm -> pgl... , March 05, 2017 at 02:46 PM"Robots are wealth creators and taxing them is illogical"
I bet Bill Gates might reply – "my company is a wealth creator so it should not be taxed". Oh wait – Microsoft is already shifting profits to tax havens. Summers states:
"Third, and perhaps most fundamentally, why tax in ways that reduce the size of the pie rather than ways that assure that the larger pie is well distributed? Imagine that 50 people can produce robots who will do the work of 100. A sufficiently high tax on robots would prevent them from being produced."
Yep – he has gone all supply-side on us.
Summers makes one, and only one, good and relevant point - that in many cases, robots/automation will not produce more product from the same inputs but better products. That's in his words; I would replace "better" with "more predictable quality/less variability" - in both directions. And that the more predictable quality aspect is hard or impossible to distinguish from higher productivity (in some cases they may be exactly the same, e.g. by streamlining QA and reducing rework/pre-sale repairs).anne -> cm... , March 05, 2017 at 04:36 PMHis prescription in the end is the old and tired "invest in education and retraining", i.e. "symbolic analyst jobs will replace the lost jobs" like they have for decades (not).
Incisive all the way through.jonny bakho -> pgl... , March 05, 2017 at 02:52 PMPundits do not write titles, editors do. Tax the profits, not the robots.pgl -> jonny bakho... , March 05, 2017 at 03:35 PMThe crux of the argument is this:
"Governments will, however, have to concern themselves with problems of structural joblessness. They likely will need to take a more explicit role in ensuring full employment than has been the practice in the US."
Instead, we have been shredding the safety net and job training / creation programs. There is plenty of work that needs to be done. People who have demand for goods and services find them unaffordable because the wealthy are capturing all the profits and use their wealth to capture even more. Trade is not the problem for US workers. Lack of investment in the US workforce is the problem. We don't invest because the dominant white working class will not support anything that might benefit blacks and minorities, even if the major benefits go to the white working class
"Tax the profits, not the robots." Exactly. I suspect this is how it would have to work since the company owns the robots.cm -> pgl... , March 05, 2017 at 03:53 PMIn principle taxing profits is preferable, but has a few downsides/differences:cm -> pgl... , March 05, 2017 at 03:58 PM
- Profit taxes cannot be "earmarked" with the same *justification* as automation taxes
- Profits may actually not increase after the automation - initially because of write-offs, and then because of pricing in (and perhaps the automation was installed in response to external market pressures to begin with).
- Profits can be shifted/minimized in ways that automation cannot - either you have the robots or not. Taxing the robots will discourage automation (if that is indeed the goal, or is considered a worthwhile goal).
Not very strong points, and I didn't read the Gates interview so I don't know his detailed motivation to propose specifically a robot tax.
When I was in Amsterdam a few years ago, they had come up with another perfidious scheme to cut people out of the loop or "incentivize" people to use the machines - in a large transit center, you could buy tickets at a vending machine or a counter with a person - and for the latter you would have to pay a not-so-modest "personal service" surcharge (50c for a EUR 2-3 or so ticket - I think it was a flat fee, but may have been staggered by type of service).cm -> cm... , March 05, 2017 at 04:03 PMMaybe I misunderstood it and it was a "congestion charge" to prevent lines so people who have to use counter service e.g. with questions don't have to wait.
And then you may have heard (in the US) the term "convenience fee" which I found rather insulting when I encountered it. It suggests you are charged for your convenience, but it is to cover payment processor costs (productivity enhancing automation!).anne -> cm... , March 05, 2017 at 04:59 PMAnd then you may have heard (in the US) the term "convenience fee" which I found rather insulting when I encountered it. It suggests you are charged for your convenience, but it is to cover payment processor costs (productivity enhancing automation!)JohnH -> pgl... , March 05, 2017 at 06:43 PM[ Wonderful. ]
Why not simplify things and just tax capital? We already property? Why not extend it to all capital?Paine -> jonny bakho... , March 05, 2017 at 05:10 PMLack of adequate compensation to the lower half of the job force is the problem. Lack of persistent big macro demand is the problem . A global traiding system that doesn't automatically move forex rates toward universal. Trading zone balance and away from persistent surplus and deficit traders is the problemanne -> Paine... , March 05, 2017 at 05:31 PMTechnology is never the root problem. Population dynamics is never the root problem
https://fred.stlouisfed.org/graph/?g=cVq0anne -> Paine... , March 05, 2017 at 05:35 PMJanuary 15, 2017
Nonfarm Business Productivity and Real Median Household Income, 1953-2015
(Indexed to 1953)
https://fred.stlouisfed.org/graph/?g=cOU6Mr. Bill -> anne... , March 05, 2017 at 06:30 PMJanuary 15, 2017
Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1952-2016
(Indexed to 1952)
Really nice if your sitting in the lunch room of the University. Especially if you are a member of the class that has been so richly awarded, rather than the class who paid for it. Humph. The discussion is garbage, Political opinion by a group that sat by ... The hypothetical nuance of impossible tax policy.Mr. Bill -> pgl... , March 05, 2017 at 06:04 PMThe concept of Robots leaving us destitute, is interesting. A diversion. It ain't robots who are harvesting the middle class. It is an entitled class of those who gave so little.run75441 -> Mr. Bill... , March 05, 2017 at 06:45 PMSigh>anne -> anne... , March 05, 2017 at 02:20 PMAfter one five axis CNC cell replaces 5 other machines and 4 of the workers, what happens to the four workers?
The issue is the efficiency achieved through better through put forcing the loss of wages. If you use the 5-axis CNC, tax the output from it no more than what would have been paid to the 4 workers plus the Overhead for them. The Labor cost plus the Overhead Cost is what is eliminated by the 5-Axis CNC.
It is not a diversion. It is a reality.
http://krugman.blogs.nytimes.com/2009/01/03/economists-behaving-badly/cm -> pgl... , March 05, 2017 at 03:07 PMJanuary 3, 2009
Economists Behaving Badly
By Paul KrugmanOuch. The Wall Street Journal's Real Time Economics blog has a post * linking to Raghuram Rajan's prophetic 2005 paper ** on the risks posed by securitization - basically, Rajan said that what did happen, could happen - and to the discussion at the Jackson Hole conference by Federal Reserve vice-chairman Don Kohn *** and others. **** The economics profession does not come off very well.
Two things are really striking here. First is the obsequiousness toward Alan Greenspan. To be fair, the 2005 Jackson Hole event was a sort of Greenspan celebration; still, it does come across as excessive - dangerously close to saying that if the Great Greenspan says something, it must be so. Second is the extreme condescension toward Rajan - a pretty serious guy - for having the temerity to suggest that maybe markets don't always work to our advantage. Larry Summers, I'm sorry to say, comes off particularly badly. Only my colleague Alan Blinder, defending Rajan "against the unremitting attack he is getting here for not being a sufficiently good Chicago economist," emerges with honor.
* http://blogs.wsj.com/economics/2009/01/01/ignoring-the-oracles/
** http://www.kc.frb.org/publicat/sympos/2005/PDF/Rajan2005.pdf
*** http://www.kc.frb.org/publicat/sympos/2005/PDF/Kohn2005.pdf
**** https://www.kansascityfed.org/publicat/sympos/2005/PDF/GD5_2005.pdf
No, his argument is much broader. Summers stops at "no new taxes and education/retraining". And I find it highly dubious that compensation/accommodation for workers can be adequately funded out of robot taxes.cm -> cm... , March 05, 2017 at 03:09 PMBaker goes far beyond that.
What Baker mentioned: mandatory severance, shorter work hours or more vacations due to productivity, funding infrastructure.Paine -> anne... , March 05, 2017 at 05:19 PMSummers: "Let them eat training."
We should never assign a social task to the wrong institution. Firms should be unencumbered by draconian hire and fire constraints. The state should provide the compensation for lay offs and firings. The state should maintain an adequate local Beveridge ratio of job openings to Job applicantsanne -> anne... , March 05, 2017 at 02:33 PMFirms task is productivity max subject to externality off sets. Including output price changed. And various other third party impacts
Correcting:Tom aka Rusty : , March 05, 2017 at 02:19 PMSuddenly then, Bill Gates has become an accomplished student of public policy who can command an audience from Lawrence Summers who was unable to abide by the likes of the prophetic Brooksley Born who was chair of the Commodity Futures Trading Commission or the prophetic professor Raghuram Rajan who would become Governor of the Reserve Bank of India. Agreeing with Bill Gates however is a "usual" for Summers.
Until about a decade or so ago many states I worked in had a "tangible property" or "personal property" tax on business equipment, and sometimes on equipment + average inventory. Someday I will do some research and see how many states still do this. Anyway a tax on manufacturing equipment, retail fixtures and computers and etc. is hardly novel or unusual. So why would robots be any different?pgl -> Tom aka Rusty... , March 05, 2017 at 02:38 PMI suspect it is the motivation of Gates as in what he would do with the tax revenue. And Gates might be thinking of a higher tax rate for robots than for your garden variety equipment.Paine -> Tom aka Rusty... , March 05, 2017 at 05:22 PMThere is no difference Beyond spinPaine -> Paine... , March 05, 2017 at 05:28 PMYes some equipment in side any one firm compliments existing labor inside that firm including already installed robots Robots new robots are rivalsanne : , March 05, 2017 at 02:28 PMRivals that if subject to a special " introduction tax " Could deter installation
As in
The 50 for 100 swap of the 50 hours embodied in the robot
Replace 100. Similarly paid production line labor
But ...There's a 100 % plusher chase tax on the robots
Why bother to invest in the productivity increase
If here are no other savings
http://cepr.net/blogs/beat-the-press/bill-gates-wants-to-undermine-donald-trump-s-plans-for-growing-the-economyanne -> anne... , March 05, 2017 at 02:30 PMFebruary 20, 2017
Bill Gates Wants to Undermine Donald Trump's Plans for Growing the Economy
Yes, as Un-American as that may sound, Bill Gates is proposing * a tax that would undermine Donald Trump's efforts to speed the rate of economic growth. Gates wants to tax productivity growth (also known as "automation") slowing down the rate at which the economy becomes more efficient.
This might seem a bizarre policy proposal at a time when productivity growth has been at record lows, ** *** averaging less than 1.0 percent annually for the last decade. This compares to rates of close to 3.0 percent annually from 1947 to 1973 and again from 1995 to 2005.
It is not clear if Gates has any understanding of economic data, but since the election of Donald Trump there has been a major effort to deny the fact that the trade deficit has been responsible for the loss of manufacturing jobs and to instead blame productivity growth. This is in spite of the fact that productivity growth has slowed sharply in recent years and that the plunge in manufacturing jobs followed closely on the explosion of the trade deficit, beginning in 1997.
[Manufacturing Employment, 1970-2017]
Anyhow, as Paul Krugman pointed out in his column **** today, if Trump is to have any hope of achieving his growth target, he will need a sharp uptick in the rate of productivity growth from what we have been seeing. Bill Gates is apparently pushing in the opposite direction.
* https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/
** https://fred.stlouisfed.org/graph/?g=cABu
*** https://fred.stlouisfed.org/graph/?g=cABr
**** https://www.nytimes.com/2017/02/20/opinion/on-economic-arrogance.html
-- Dean Baker
https://fred.stlouisfed.org/graph/?g=cABuanne -> anne... , March 05, 2017 at 02:32 PMJanuary 4, 2017
Nonfarm Business Labor Productivity, * 1948-2016
* Output per hour of all persons
(Percent change)
https://fred.stlouisfed.org/graph/?g=cABrJanuary 4, 2017
Nonfarm Business Labor Productivity, * 1948-2016
* Output per hour of all persons
(Indexed to 1948)
https://fred.stlouisfed.org/graph/?g=cN2zRon Waller : , March 05, 2017 at 02:43 PMJanuary 15, 2017
Manufacturing employment, 1970-2017
https://fred.stlouisfed.org/graph/?g=cN2HJanuary 15, 2017
Manufacturing employment, 1970-2017
(Indexed to 1970)
Yes, it's far better that our betters in the upper class get all the benefits from productivity growth. Without their genetic entitlement to wealth others created, we would just be savages murdering one another in the streets.Peter K. : , March 05, 2017 at 03:14 PMThese Masters of the Universe of ours put the 'civil' in our illustrious civilization. (Sure it's a racist barbarian concentration camp on the verge of collapse into fascist revolutions and world war. But, again, far better than people murdering one another in the streets!)
People who are displaced from automation are simply moochers and it's only right that they are cut out of the economy and left to die on the streets. This is the law of Nature: survival of the fittest. Social Darwinism is inescapable. It's what makes us human!
Instead of just waiting for people displaced from automation to die on the streets, we should do the humane thing and establish concentration camps so they are quickly dispatched to the Void. (Being human means being merciful!)
Thank you O glorious technocrats for shining the light of truth on humanity's path into the future! Where, oh where, would we be without our looting Benevolent Overlords and their pompous lapdogs (aka Liars in Public Places)?
I think it would be good if the tax was used to help dislocated workers and help with inequality as Gates suggests. However Summers and Baker have a point that it's odd to single out robots when you could tax other labor-saving, productivity-enhancing technologies as well.greg : , March 05, 2017 at 03:34 PMBaker suggests taxing profits instead. I like his idea about the government taking stock of companies and collecting taxes that way.
"They likely will need to take a more explicit role in ensuring full employment than has been the practice in the US.
Among other things, this will mean major reforms of education and retraining systems, consideration of targeted wage subsidies for groups with particularly severe employment problems, major investments in infrastructure and, possibly, direct public employment programmes."
Not your usual neoliberal priorities. Compare with Hillary's program.
All taxes are a reallocation of wealth. Not taxing wealth creators is impossible.pgl -> greg ... , March 05, 2017 at 03:38 PMOn the other hand, any producer who is not taxed will expand at the expense of those producers who are taxed. This we are seeing with respect to mechanical producers and human labor. Labor is helping to subsidize its replacement.
Interesting that Summers apparently doesn't see this.
"Not taxing wealth creators is impossible."cm -> pgl... , March 05, 2017 at 04:12 PMSubstitute "impossible" with "bad policy" and you are spot on. Of course the entire Paul Ryan agenda is to shift taxes from the wealthy high income to the rest of us.
Judging by the whole merit rhetoric and tying employability to "adding value", one could come to the conclusion that most wealth is created by workers. Otherwise why would companies need to employ them and wring their hands over skill shortages? Are you suggesting W-2 and payroll taxes are bad policy?pgl -> cm... , March 05, 2017 at 05:15 PM
Payroll taxes to fund Soc. Sec. benefits is a good thing. But when they are used to fund tax cuts for the rich - not a good thing. And yes - wealth may be created by workers but it often ends up in the hands of the "investor class".Paine -> cm... , March 05, 2017 at 05:45 PMLet's not conflate value added from value extracted. Profits are often pure economic rents. Very often non supply regulating. The crude dynamics of market based pricing hardly presents. A sea of close shaveed firms extracting only. Necessary incentivizing profits of enterprisePaine -> Paine... , March 05, 2017 at 05:47 PMProfiteers extract far more value then they create. Of course disentangling system improving surplus ie profits of enterprisePaine -> Paine... , March 05, 2017 at 05:51 PM
From the rest of the extracted swag. Exceeds existing tax systems capacityOne can make a solid social welfare case for a class of income streamChris G : , March 05, 2017 at 04:21 PM
that amounts to a running residue out of revenue earned by the firm
above compensation to job holders in that firmSee the model of the recent oboe laureate
But that would amount to a fraction of existing corporate " earnings "
Errr extractionsTaking this in a different direction, does it strike anyone else as important that human beings retain the knowledge of how to make the things that robots are tasked to produce?Paine -> Chris G ... , March 05, 2017 at 05:52 PM
As hobbies yesChris G -> Paine... , March 05, 2017 at 05:55 PMThat's it? Only as hobbies? Eesh, I must have a prepper gene.cm -> Chris G ... , March 05, 2017 at 06:50 PM
The current generation of robots and automated equipment isn't intelligent and doesn't "know" anything. People still know how to make the things, otherwise the robots couldn't be programmed.Chris G -> cm... , March 05, 2017 at 08:22 PMHowever in probably many cases, doing the actual production manually is literally not humanly possible. For example, making semiconductor chips or modern circuit boards requires machines - they cannot be produced by human workers under any circumstances, as they require precision outside the range of human capability.
Point taken but I was thinking more along the lines of knowing how to use a lathe or an end mill. If production is reduced to a series of programming exercises then my sense is that society is setting itself up for a nasty fall.Dan : , March 05, 2017 at 05:00 PM(I'm all for technology to the extent that it builds resilience. However, when it serves to disconnect humans from the underlying process and reduces their role to simply knowledge workers, symbolic analysts, or the like then it ceases to be net positive. Alternatively stated: Tech-driven improvements in efficiency are good so long as they don't undermine overall societal resilience. Be aware of your reliance on things you don't understand but whose function you take for granted.)
Gates almost certainly meant tax robots the way we are taxed. I doubt he meant tax the acquisition of robots. We are taxed in complex ways, presumably robots will be as well.Paine -> Dan ... , March 05, 2017 at 05:57 PMSummers is surely using a strawman to make his basically well thought out arguments.
In any case, everyone is talking about distributional impacts of robots, but resource allocation is surely to be as much or more impacted. What if robots only want to produce antennas and not tomatoes? That might be a damn shame.
It all seems a tad early to worry about and it's hard to see how what ever the actual outcome is, the frontier of possible outcomes has to be wildly improved.
Given recent developments in labor productivity Your Last phrase becomes a gemSandwichman : , March 05, 2017 at 08:02 PMThat is If you end with "it's hard to see whatever the actual outcome is The frontier of possible outcomes shouldn't be wildly improved By a social revolution "
Larry Summers is clueless on robots.libezkova -> Sandwichman ... , March 05, 2017 at 08:23 PMRobots do not CREATE wealth. They transform wealth from one kind to another that subjectively has more utility to robot user. Wealth is inherent in the raw materials, the knowledge, skill and effort of the robot designers and fabricators, etc., etc.
The distinction is crucial.
"Larry Summers is clueless on robots."libezkova : March 05, 2017 at 08:09 PMWhile he is overrated, he is not completely clueless. He might well be mediocre (or slightly above this level) but extremely arrogant defender of the interests of neoliberal elite. Rubin's boy Larry as he was called in the old days.
BTW he was Rubin's hatchet man for eliminating Brooksley Born attempt to regulate the derivatives and forcing her to resign:
== quote ==
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"Market is, at the end, a fully political construct. And what neoliberals like Summers promote is politically motivated -- reflects the desires of the ruling neoliberal elite to redistribute wealth up.BTW there is a lot of well meaning (or fashion driven) idiotism that is sold in the USA as automation, robots, move to cloud, etc. Often such fashion driven exercises cost company quite a lot. But that's OK as long as bonuses are pocketed by top brass, and power of labor diminished.
Underneath of all the "robotic revolution" along with some degree of technological innovation (mainly due to increased power of computers and tremendous progress in telecommunication technologies -- not some breakthrough) is one big trend -- liquidation of good jobs and atomization of the remaining work force.
A lot of motivation here is the old dirty desire of capital owners and upper management to further to diminish the labor share. Another positive thing for capital owners and upper management is that robots do not go on strike and do not demand wage increases. But the problem is that they are not a consumers either. So robotization might bring the next Minsky moment for the USA economy closer. Sighs of weakness of consumer demand are undeniable even now. Look at auto loan delinquency rate as the first robin. http://www.usatoday.com/story/money/cars/2016/02/27/subprime-auto-loan-delinquencies-hit-six-year-high/81027230/
== quote ==
The total of outstanding auto loans reached $1.04 trillion in the fourth-quarter of 2015, according to the Federal Reserve Bank of St. Louis. About $200 billion of that would be classified as subprime or deep subprime.
== end of quote ==Summers as a staunch, dyed-in-the-wool neoliberal of course is against increasing labor share. Actually here he went full into "supply sider" space -- making richer more rich will make us better off too. Pgl already noted that by saying: "Has Summers gone all supply-side on his? Start with his title"
BTW, there is a lot of crazy thing that are going on with the US large companies drive to diminish labor share. Some o them became barely manageable and higher management has no clue what is happening on the lower layers of the company.
The old joke was: GM does a lot of good things except making good cars. Now it can be expanded to a lot more large US companies.
The "robot pressure" on labor is not new. It is actually the same old and somewhat dirty trick as outsourcing. In this case outsourcing to robots. In other words "war of labor" by other means.
Two caste that neoliberalism created like in feudalism occupy different social spaces and one is waging the war on other, under the smoke screen of "free market" ideology. As buffet remarked "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."
BTW successes in robotics are no so overhyped that it is not easy to distinguish where reality ends and the hype starts.
In reality telecommunication revolution is probably more important in liquation of good jobs in the USA. I think Jonny Bakho or somebody else commented on this, but I can't find the post.
|
|
|
Feb 01, 2017 | economistsview.typepad.com
Peter K. -> Peter K.... February 01, 2017 at 11:33 AM , 2017 at 11:33 AM
Larry Summers:"Third, the tax change will harm the global economy in ways that reverberate back to America. It will be seen by other countries and the World Trade Organisation as a protectionist act that violates US treaty obligations.
Proponents may argue that it should be legal because it is like a value added tax, but the WTO is very clear that income taxes cannot discriminate to favour exports.
While the WTO process would grind on, protectionist acts by other nations would be licensed immediately."
http://larrysummers.com/2017/01/08/us-tax-reform-is-vital-but-trumps-plan-is-flawed/
|
|
|
Jan 21, 2017 | economistsview.typepad.com
Larry Summers:Disillusioned in Davos : Edmund Burke famously cautioned that "the only thing necessary for the triumph of evil is for good men to do nothing." I have been reminded of Burke's words as I have observed the behavior of US business leaders in Davos over the last few days. They know better but in their public rhetoric they have embraced and enabled our new President and his policies.JohnH -> Peter K.... , January 20, 2017 at 03:24 PMI understand and sympathize with the pressures they feel. ... Businesses who get on the wrong side of the new President have lost billions of dollars of value in sixty seconds because of a tweet. ...
Yet I am disturbed by (i) the spectacle of financiers who three months ago were telling anyone who would listen that they would never do business with a Trump company rushing to praise the new Administration (ii) the unwillingness of business leaders who rightly take pride in their corporate efforts to promote women and minorities to say anything about Presidentially sanctioned intolerance (iii) the failure of the leaders of global companies to say a critical word about US efforts to encourage the breakup of European unity and more generally to step away from underwriting an open global system (iv) the reluctance of business leaders who have a huge stake in the current global order to criticize provocative rhetoric with regard to China, Mexico or the Middle East (v) the willingness of too many to praise Trump nominees who advocate blatant protection merely because they have a business background.
I have my differences with the new Administration's economic policies and suspect the recent market rally and run of economic statistics is a sugar high. Reasonable people who I respect differ and time will tell. My objection is not to disagreements over economic policy. It is to enabling if not encouraging immoral and reckless policies in other spheres that ultimately bear on our prosperity. Burke was right. It is a lesson of human experience whether the issue is playground bullying, Enron or Europe in the 1930s that the worst outcomes occur when good people find reasons to accommodate themselves to what they know is wrong. That is what I think happened much too often in Davos this week.
Larry Summers lecturing us about bullies! Precious!anne : , January 20, 2017 at 12:24 PM"Larry Summers Is An Unrepentant Bully"
http://www.huffingtonpost.com/peter-s-goodman/larry-summers-bully-fed_b_3653387.htmlLike so much of the tit-for-tat between Democrats and Republicans, what's OK for to do is NOT OK for you to do!!!
https://books.google.com/books?id=SFNADAAAQBAJ&pg=PT951&lpg=PT951&dq=%22No+man,+who+is+not+inflamed+by+vainglory+into+enthusiasm%22&source=bl&ots=ufx9GiMtls&sig=jJgSGfaCuCQFzBa9KiNBKCoaYgQ&hl=en&sa=X&ved=0ahUKEwjE7YCOxtHRAhWjLMAKHVmSDFAQ6AEIHDAB#v=onepage&q=%22No%20man%2C%20who%20is%20not%20inflamed%20by%20vainglory%20into%20enthusiasm%22&f=falseanne -> anne... , -11770
Thoughts on the Cause of the Present Discontents
No man, who is not inflamed by vainglory into enthusiasm, can flatter himself that his single, unsupported, desultory, unsystematic endeavours are of power to defeat the subtle designs and united Cabals of ambitious citizens. When bad men combine, the good must associate; else they will fall, one by one, an unpitied sacrifice in a contemptible struggle.
-- Edmund Burke
Edmund Burke famously cautioned that "the only thing necessary for the triumph of evil is for good men to do nothing."anne -> Chris G ... , January 20, 2017 at 06:42 PM-- Lawrence Summers
[ Edmund Burke never cautioned this. ]
Notice the fear of association or community of Milton Friedman:Gibbon1 -> anne... , January 20, 2017 at 07:37 PMhttp://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
September 13, 1970
The Social Responsibility of Business is to Increase its Profits
By Milton Friedman - New York TimesWhen I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are–or would be if they or anyone else took them seriously–preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades....
When I used to read Delong's blog before Delong went off on Sanders because Delong thought that Hillary Clinton would give Delongs son a job...anne -> anne... , January 20, 2017 at 12:52 PMThere was economics student that penned a response where he mentioned that the economics profession generally dislikes models with negative externalities. But truly loath models that incorporate positive externalities.
A positive externality is where some action on your part benefits you _and_ benefits some third party.
One can assume Milton Friedman and his followers find that concept revolting indeed.
While I was not in Davos, I read about the proceedings and meeting in the Western European and Chinese press and was impressed by the community emphasis placed on social justice. Possibly there was considerable individual resistance to the public theme, and Lawrence Summers would readily sense such resistance, but the public theme from the speech by Xi Jinping on was encouraging and portrayed in Western Europe and China as encouraging.kthomas -> anne... , January 20, 2017 at 02:19 PMThe headline of his post is somewhat misleading. He was not really talking about Davos.Chris G -> kthomas... , January 20, 2017 at 05:53 PMLet me rephrase: Name me some Fortune 500 companies who consider potential societal impacts of their actions and, as a result, sometimes make decisions which don't maximize their profits but are the "right" thing to do for the community/their workers/the environment/etc.? What Fortune 500 companies are motivated by things beyond maximizing profits for shareholders?anne -> Chris G ... , January 20, 2017 at 05:55 PMMy point is that corporate leaders who are charged to act to maximize profits will always be cowards when it comes to moral and ethical issues. If their job is to maximize profits. If they don't want to lose their job then that's what they'll do - act to maximize profits. Where would Summers get the idea that they would act any differently? Do the people he's referring to have a track record of choosing the moral high ground over profits? If they do then I could understand surprise and disappointment that they're folding. But they've never had to face that choice before let alone chosen moral high ground over money, have they?
My point is that corporate leaders who are charged to act to maximize profits will always be cowards when it comes to moral and ethical issues. If their job is to maximize profits. If they don't want to lose their job then that's what they'll do - act to maximize profits. Where would Summers get the idea that they would act any differently? Do the people he's referring to have a track record of choosing the moral high ground over profits? ...Winslow R. : , January 20, 2017 at 02:02 PM[ Properly argued, sadly. ]
I recall Summers/Romer with both houses and Obama blowing their chances to do something for the middle/working class.Summers/Delong said if the stimulus was too small we could always get another later, yet that chance to do something never came and he did nothing.....
I'd like Larry to ponder whether it was he who did nothing.
|
|
|
Jan 17, 2017 | economistsview.typepad.com
RC AKA Darryl, Ron : January 17, 2017 at 03:53 AMRE: Trump and Gorbachevreason -> RC AKA Darryl, Ron... , January 17, 2017 at 05:28 AMhttp://glineq.blogspot.com/2017/01/trump-and-gorbachev.html
"...Many people (myself included) have regretted that the Clinton administration has failed to seize the moment at the end of the Cold War to create a more just international order that would be based on the rules of law, would not be dichotomic or even Manichean one with its origin in the Cold War, and would include Russia rather than leave it out in the cold..."
[Was "Clinton administration has failed" a typo or a subtle semantic choice? Whereas "Clinton administration HAD failed" would have past perfect tense, "has failed" is present perfect tense, suggesting the subject "Clinton administration" is the continuum of compassionate conservatism beginning with Bill Clinton and ending with Barrack Obama. Semantics is why spelling is important. It is also why reading is important.]
I personally have no idea what Branko Milanovic is going on about there. As far as I can tell Russia chose to be "out in the cold", it wasn't excluded.RC AKA Darryl, Ron -> reason ... , January 17, 2017 at 06:21 AM[Not exactly. Sherman, set the wayback machine for 1998, near the end of the Bill Clinton administration's second term.]ilsm -> RC AKA Darryl, Ron... , January 17, 2017 at 02:00 PMhttp://fpif.org/aid_to_russia/
Aid to Russia
When the Soviet Union abruptly ceased to exist on December 25, 1991, it seemed that the West, particularly the U.S., finally had what it had always wanted–the opportunity to introduce quick, all-encompassing economic reform that would remake Russia in the West's own image.
By Janine Wedel, September 1, 1998.
Key Points
- Since 1992, the U.S. and other donors have provided Russia billions of dollars in aid for radical economic "reforms," largely defined as privatization of state-owned assets.
- The chief beneficiary of these reforms has been a small clique of political and economic powerbrokers.
- The Chubais clique typically instituted reforms through top-down presidential decree and a network of aid-funded "private" organizations which has circumvented Russia's legislature.
When the Soviet Union abruptly ceased to exist on December 25, 1991, it seemed that the West, particularly the U.S., finally had what it had always wanted–the opportunity to introduce quick, all-encompassing economic reform that would remake Russia in the West's own image. To this end, the U.S., over the past seven years, has embarked upon a fairly consistent course of economic relations with Russia. Three interrelated policies characterize this course: 1) the urging of radical economic "reforms," defined largely as the privatization of state-owned assets, to restructure the economy; 2) the backing of a particular political-economic group, or "clan," to do so; and 3) the provision of billions of dollars in U.S. and other Western aid, subsidized loans, and rescheduled debt.
The United States has consistently supported President Boris Yeltsin and a Russian cadre of self-styled economic "reformers" to conduct Western aid-funded economic reforms and negotiate economic relations with the West. U.S. support for Anatoly Chubais, Yegor Gaidar, and the so-called "Chubais Clan" (a group of savvy operators dominated by a clique from St. Petersburg) has bolstered the Clan's standing as Russia's chief brokers with the West and the international financial institutions. This support continues to the present. And, the Chubais Clan–not the Russian economy as a whole–has been the chief beneficiary of economic restructuring funding from the U.S. Agency for International Development (USAID).
Throughout the 1990s, Chubais has been a useful figure for Russian president Boris Yeltsin: beginning in November 1991 as head of Russia's new privatization agency, the State Property Committee (GKI), then additionally as first deputy prime minister in January 1994, and later as the lightning rod for complaints about economic policies after the communists won the Russian parliament (Duma) election in December 1995. Chubais made a comeback in 1996 as head of Yeltsin's successful reelection campaign and was named chief of staff for the president. In March 1997, Western support and political maneuvering catapulted him to first deputy prime minister and minister of finance. Although fired by Yeltsin in March 1998, Chubais was reappointed in June 1998 to be Yeltsin's special envoy in charge of Russia's relations with international lending institutions.
Working closely with Harvard University's Institute for International Development (HIID), the Chubais Clan controlled, directly and indirectly, millions of dollars in U.S. aid through a variety of institutions and organizations set up to perform privatization, economic-restructuring, and related activities. Between 1992 and 1997, HIID received $40.4 million from USAID in noncompetitive grants for work in Russia and was slated to receive another $17.4 million until USAID suspended HIID's funding in May 1997, citing evidence that HIID principals were engaged in "activities for personal gain." In addition to receiving millions in direct funding, HIID and the Clan helped steer and coordinate USAID's $300 million economic reform portfolio, which encompassed privatization, legal reform, development of capital markets, and the creation of a Russian securities and exchange commission.
The preferred method of economic reform was top-down presidential decree orchestrated by Chubais. Shortly after Yeltsin became the elected president of the Russian Federation in June 1991, the Federation's Supreme Soviet passed a law mandating privatization. After several schemes were floated, the Supreme Soviet passed a program in 1992 intended to prevent corruption, but the one Chubais eventually implemented contained none of the safeguards and was designed to encourage the accumulation of property in a few hands. This program opened the door to widespread corruption and was so controversial that Chubais ultimately had to rely largely on presidential decrees, not parliamentary approval, for implementation.
Instead of encouraging market reform, this rule by decree frustrated many market reforms as well as democratic decisionmaking. Some reforms, such as lifting price controls, could be achieved by decree. But many other reforms advocated by USAID, the World Bank, and the International Monetary Fund (IMF), including privatization and economic restructuring, depended on changes in law, public administration, or mindsets, and required working with the full spectrum of legislative and market participants-not just one group. The "reformers" set up still other means of bypassing democratic processes, including a network of aid-funded "private" organizations controlled by the Chubais Clan and HIID. These organizations enabled reformers to bypass legitimate bodies of government, such as ministries and branch ministries, and to circumvent the Duma.
Problems with Current U.S. Policy
Key Problems
- U.S. officials and a team of Harvard advisers have embraced the "reformers'" dictatorial political methods, arguing they alone are capable of instituting swift privatization and other economic restructurings.
- While professing to support simply economic reform, U.S. policies have consolidated political and economic power in the hands of one clique.
- The $11.2 billion IMF bailout in July 1998 will intensify these abuses and has failed to stem Russia's financial crisis.
The privatization drive that was supposed to reap the fruits of the free market instead helped to create a system of tycoon capitalism run for the benefit of a corrupt political oligarchy that has appropriated hundreds of millions of dollars of Western aid and plundered Russia's wealth.
Despite evidence of corruption and lack of popular support, many Western investors and U.S. officials embraced the "reformers" dictatorial modus operandi and viewed Chubais as the only man capable of keeping the nation heading along the troublesome road to economic reform. As Walter Coles, a senior adviser in USAID's Office of Privatization and Economic Restructuring program, said, "If we needed a decree, Chubais didn't have to go through the bureaucracy," adding, "There was no way that reformers could go to the Duma for large amounts of money to move along reform."
While this approach sounds good in principle, it is less convincing in practice because it is an inherently political decision disguised as a technical matter. As Chubais Clan member Maxim Boycko himself acknowledged in a 1995 co-authored book on privatization, "Aid can change the political equilibrium by explicitly helping free-market reformers to defeat their opponents . Aid helps reform not because it directly helps the economy–it is simply too small for that–but because it helps the reformers in their political battles."
In a 1997 interview, U.S. aid coordinator to the former Soviet Union, Ambassador Richard L. Morningstar, stood by this approach: "If we hadn't been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you're talking about a few hundred million dollars, you're not going to change the country, but you can provide targeted assistance to help Chubais."
U.S. assistance to Chubais continued even after he was dismissed by Yeltsin as First Deputy Prime Minister in January 1996. Chubais was placed on the HIID payroll, a show of loyalty that USAID Assistant Administrator Thomas A. Dine said he supported.
Much of this feels familiar to Russians raised in the Communist practice of political control over economic decisions–the quintessence of the discredited Communist system. While professing simply to support reform, U.S. policies afforded one group a comparative advantage and allowed much aid to be used as the tool of this group. Ironically, far from helping to separate the political and economic spheres, U.S. economic aid has instead reinforced the interdependency of these spheres. Indeed, the activities of HIID in Russia provide some cautionary lessons on abuse of trust by supposedly disinterested foreign advisers, on U.S. arrogance, and on the entire policy of support for a single Russian group of so-called reformers.
The July 1998 IMF bailout of Russia represents an intensification of the very policies that have produced such abuses. The $11.2 billion aid package for 1998, (with another $7.8 billion funds over three years pledged if Russia "stays on track"), is supposed to put an end to Russia's financial crisis. Yet only a very few certain political-economic players–not the population at large, including workers who have gone without wages for months–stand to reap any benefits.
Among those who spoke out against the bailout was Veniamin Sokolov, head of the Chamber of Accounts of the Russian Federation, Russia's equivalent of the U.S. General Accounting Office. Sokolov, who has investigated the destination of some previous monies from international lending institutions and aid organizations, argued, "All loans made to Russia go to speculative financial markets and have no effect whatsoever on the national economy." And it is the Russian people who are responsible for repaying those loans.
The very call for an IMF bailout is a commentary on the failure of previous economic aid to Russia: If aid had been effective, why were billions in IMF loans needed to prevent the country from falling into crisis? The IMF loan and accompanying hype were intended to revive confidence in Russia's plummeting markets and give the government time to get its financial markets under control. However, just weeks after the IMF deal was approved, investor confidence hit a new low and the Russian government was forced to devalue the ruble.
For its part, USAID, which provided Russia with $95.7 million in economic aid in 1997 and another $129.1 million estimated for 1998, is requesting from Congress $225.4 million in economic aid for Russia in 1999.
Toward a New Foreign Policy
Key Recommendations
- In order to support its stated objectives of fostering sound economic development and democratic institutions, the U.S. needs to reverse its current policies and practices in Russia.
- The United States must accept that the future shape of Russia must and will be determined by the Russian people and adhere to its basic principles such as participatory democracy and the rule of law.
- Washington should recognize that a healthy banking and financial system depends on a revival of production and distribution within Russia and should use its considerable influence with the World Bank and IMF to promote policies that address these fundamental problems.
Given the continuing socioeconomic deterioration of Russia, what should the United States do? If the U.S. government wants to adhere to its own declared objectives and help promote in Russia sound economic development and equitable growth as well as viable and transparent democratic institutions, it has no option than to reverse its current policies and practices.
The U.S. role in creating a system of tycoon capitalism and the current economic meltdown, coupled with military policies such as NATO expansion, have fueled anti-American sentiment in Russia. The first thing we should do, as Joseph Stiglitz, a leading World Bank economist, correctly suggests, is to adopt "a greater degree of humility . (and) acknowledgement of the fact that we do not have all of the answers." Washington must also accept that the future shape of Russia society will and must be determined by the Russian people. U.S. policy should at least try to adhere to some of the principles that it preaches, such as participatory democracy and the rule of law or even "no taxation without representation." In line this with, the U.S. must stop its policy of support-at-all-costs for Yeltsin and the Chubais Clan, not only in USAID targets but also in U.S. influence in IMF and World Bank lending.
Second, the U.S. government should recognize that a healthy banking and financial system cannot arise without a revival of production and distribution in the "real" economy. Measures which emphasize increases in tax collections and reductions in government expenditures under the current extremely depressed conditions simply guarantee accelerated decline of the real economy and social-political chaos. The United States should use its great influence on the IMF andWorld Bank to reduce their pressure on Russia to pursue such suicidal policies. Not only did the IMF bailout fail to restore confidence, but the business of international aid has been fundamentally ill-conceived. As Veniamin Sokolov warned: "Giving more loans to the Yeltsin government is comparable to giving a drug addict a fresh supply of narcotics. Any new loans will only go to the realm of financial speculation and to prop up support for Boris Yeltsin. Russia does not need any further such lending." In sum, further aid will go to the same corrupt niches and is likely to make the situation worse, not better.
Third, the U.S. should embark on a broad-based policy to encourage governance and the rule of law. It is essential that the United States discontinue support of non-inclusive organizations and the bypassing of democratic process through decree. Some U.S. aid funds have gone for "democracy building," including strengthening and revamping the judiciary. However, these efforts have been a low priority and have been compromised and undermined by the practice of U.S. economic advisers encouraging the Chubais Clan to enact swift economic reforms without approval of the Duma, Russia's popularly elected legislature.
The U.S. needs to adopt a pro-democracy stance that encourages institution-building and as broad a range of democratic positions as possible. We must cease to select specific groups or individuals as the recipients of uncritical support, which both corrupts our "favorites" and delegitimizes them in the eyes of their fellow citizens.
Fourth, President Clinton himself, other U.S. officials, and economic advisers need to establish contact and ties with a wide cross-section of the Russian leadership–politicians, economists, and social and political activists–and not only with Yeltsin and his allies. How Russian elites perceive the efficacy of U.S. aid programs and policies should be a source of concern, especially because many Russians have questioned American intentions. Although a reversal of policy will require a long and resolute process of diplomacy, Clinton administration officials can take steps by, for example, making efforts to meet with members of the Duma and a diversity of Russian elites.
[What the US largely did at that point was disengage aid to Russia and set them adrift.]
This is a jr high social studies homework assignment from a pro neocon teacher.ilsm -> ilsm... , January 17, 2017 at 02:02 PMBill Clinton was all out after Russia, Talbot and his neocon advisors!
The look the other way when the united Germany sent a brigade size armored set to Croatia to do Serbs.
In Jul 1997 Poland, Hungary and Czech republic were entered in to NATO.
Several undeclared wars against Serbia under Clinton. The Russians looked on helpless to aid the historic Tsarist protectorate.
The Crimean War in 1857 was fought over the same issues.
End of cold war was back to the historic west Europe versus Russia.
Milanovic is out of his element.
Then there was Harvard's economic advisors' pillaging Russian evolution.RC AKA Darryl, Ron -> ilsm... , January 17, 2017 at 02:37 PMDocumented by David Warsh.
It is not clear what Milanovic was trying to get at, but what Janine Wedel wrote about was how I came to understand the story. Your writing makes Milanovic seem cogent. I am talking about your organization of ideas and your semantics, as well as his. Neither of you get much across for the effort. Wedel can actually write. Whether she is right or not, I cannot say, but it is how I have heard the story told from the beginning.ilsm -> RC AKA Darryl, Ron... , January 17, 2017 at 03:29 PMI typed too much!libezkova -> ilsm... , January 17, 2017 at 05:55 PMno more six word lines
Here is a web page about Harvard mafia did Russia in 90thlibezkova -> libezkova... , January 17, 2017 at 06:43 PMhttp://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtml
Looks like there was a desire to completely destroy Russian economics and turn Russia into vassal state by the USA ruling elite. So the policy was not to help, but help to destroy.Chris G -> RC AKA Darryl, Ron... , January 17, 2017 at 02:15 PMHuge profits were made by devouring Russia and all xUSSR region and plunging the population into abject poverty. But eventually it backfired.
Yeah, hard to argue that the U.S. did the Russian people a solid after the Soviet Union collapsed.RC AKA Darryl, Ron said in reply to Chris G ... , January 17, 2017 at 02:38 PM
Yep. The US is good about intervening, screwing it up, and then leaving the scene of the crime.JohnH -> RC AKA Darryl, Ron... , January 17, 2017 at 07:31 AMRegarding Russia, Clinton was more interested in domination that development...a consistent theme in US history since its beginning.pgl -> JohnH... , January 17, 2017 at 08:04 AMInstead of promoting democracy, the US rigged the 1996 election in favor of the drunkard Yeltsin.
http://www.newsmax.com/Newsmax-Tv/bill-clinton-advise-boris-yeltsin-dick-morris/2016/09/08/id/747327/To hear the all the whining of Democrats and of the security state, the chickens may have come home to roost.
Wow - Anne is not going to like this suggestion that Yeltsin was a drunkard. Of course you missed the real problem - his regime of crony capitalism was incredibly corrupt. Stiglitz covered the damage that was done in a chapter entitled "Who Lost Russia". Something else you never bothered to read.pgl -> pgl... , January 17, 2017 at 08:05 AMChapter 5 of Globalization and its Discontents (2002)JohnH -> pgl... , January 17, 2017 at 09:54 AMhttps://www.princeton.edu/wwac/academic-review/files/561/8.3c_StiglitzCh5.doc
Yeltsin's "regime of crony capitalism was incredibly corrupt"...Clinton's regime on a grander scale...which was why Clinton wanted to rig the Russian election for Yeltsin?ilsm -> RC AKA Darryl, Ron... , January 17, 2017 at 02:16 PMHaving been is Strategic Air Command, as well as a long time in the technical side of NORAD's mission I find Milanovic's concluding statement utterly misguided.ilsm -> RC AKA Darryl, Ron... , -1"But note that the Cold War had one good feature: it was "Cold".
"Civilization"* could have ended in less than the time to watch an NFL football game.
My experiences in the cold war were really great!! The nuclear forces I supported were on 'immediate' launch alert, several rumors abide about close calls from 'sensor errors and communication black out". Any of SAC's bomb wings could have its alert Buffs in the air in single digit minutes!
It is safer to move NATO right up to Moscow! Neocon hyperbole from Milanovic selling the US military industrial complex' marketing plans. Look how secure and prosperous the 'west' has been under the umbrella of $28T in US war spending.
It don't cause any concerns that NATO has organized former Warsaw pact against Russia.
It will be deceptively "Cold" until it goes thermonuclear over that brigade level trip wire.
Obama on cornering Russia is an extension of Wm Clinton.
|
|
|
Oct 22, 2016 | www.nakedcapitalism.com
Yves here. Mark Ames wrote this post for our fundraiser five years ago. We've turned into a fundraiser staple, since as long as Larry Summers is with us, this is the sort of classic worth reading regularly. Think of it as our analogue to Christmas perennials like The Grinch That Stole Christmas or It's a Wonderful Life. But not to worry, Ames being Ames and NC being NC, this is the antithesis of sappy. (Mark, you are on notice that if by some miraculous bit of good fortune, Summers retreats from the public sphere, we'll need you to provide an updated slant on elite venality).
And in the spirit of Christmas come a couple months early, we hope you'll leave something nice in our stocking, um, Tip Jar -- We are raising our donor target to 1350 (Lambert has yet to update our thermometer) to help us reach our final financial target for original reporting.
By Mark Ames, author of Going Postal: Rage, Murder and Rebellion from Reagan's Workplaces to Clinton's Columbine who writes regularly at Pando .
If you've been reading Naked Capitalism for any period of time without giving back in donations-and most of us have been hooked from the time we discovered Yves Smith's powerful, sharp voice and brilliant mind-then you you've been getting away with murder. Naked Capitalism is that rare blog that makes you smarter. Smarter about a lot of things, but primarily about Yves' area of expertise, finance.
By a quirk of historical bad luck, the American Left has gone two generations without understanding finance, or even caring to understand. It was the hippies who decided half a century ago that finance was beneath them, so they happily ceded the entire field-finance, business, economics, money-otherwise known as "political power"-to the other side. Walking away from the finance struggle was like that hitchhiker handing the gun back to the Manson Family. There's a great line from Charles Portis's anti-hippie novel, "Dog of the South" that captures the Boomers' self-righteous disdain for "figures":
He would always say-boast, the way those people do-that he had no head for figures and couldn't do things with his hands, slyly suggesting the presence of finer qualities.
That part about the hands-that would refer to the hippies' other great failure, turning their backs on Labor, because Labor didn't groove with the Hippies' Culture War. So the Left finds itself, fifty years later, dealing with the consequences of all those years of ruinous neglect of finance and labor-the consequences being powerlessness and political impotence.
That's why Yves Smith is so important to anyone who cares about politics and the bad direction this country is taking. In 2008, the Left suddenly discovered that although it could bray with the best of 'em about how bad foreign wars are, and how wrong racism and sexism an homophobia are, it was caught completely and shamefully by surprise by the financial collapse of 2008. The ignorance was paralyzing, politically and intellectually. Even the lexicon was alien. Unless of course you were one of the early followers of Yves Smith's blog.
It wasn't always this way.
Back in the 1930s, the Left was firmly grounded in economics, money and finance; back then, the Left and Labor were practically one. With a foundation in finance and economics, the Left understood labor and political power and ideology and organization much better than the Left today, which at best can parry back the idiotic malice-flak that the Right specializes in spraying us with. We're only just learning how politically stunted and ignorant we are, how much time and knowledge we've lost, and how much catching up we have to do.
Which is why Yves Smith's Naked Capitalism is one of the 99%'s most valuable asset in the long struggle ahead: She is both analyst and educator, with a rare literary talent (especially for finance). One thing that's protected the financial oligarchy is the turgid horrible prose that they camouflage their toxic ideas and concepts in. Yves is one of the rare few who can make reading finance as emotionally charged as it needs to be.
Naked Capitalism is our online university in finance and politics and ideology. Whereas other online universities are set up to turn millions of gullible youths into debt-shackled Wall Street feeding cows, Naked Capitalism is the opposite: Completely free, consistently brilliant, vital, and necessary, making us smarter, teaching us how we might one day overthrow the financial oligarchy. One other difference between Naked Capitalism and online university swindles: (Stanley Kaplan cough-cough!) Your donations won't end up paying Ezra Klein's salary.
Which brings me back to my whole "Shame on you!" point I was trying to make earlier. When it comes to fundraising, nothing works like shaming. That's how those late-night commercials work: You're sitting there in your nice comfortable home, and then suddenly there's this three-legged dog hobbling into its cage, with big wet eyes, and then some bearded pedophile comes on and says, "Poor Rusty has endured more abuse and pain than you can ever imagine, and tomorrow, he will be gassed to death in a slow, horrible poison death chamber. And you-look at you, sitting there with your Chunky Monkey and your central heating, what kind of sick bastard are you? Get your goddamn Visa Mastercard out and send money to Rusty, or else his death is on your head. I hope you sleep well at night."
Now I know that this sort of appeal wouldn't work on the Naked Capitalism crowd-too many economists here, and as everyone knows, you can't appeal to economists' hearts because, well, see under "Larry Summers World Bank Memo"… I can imagine Larry watching that late night commercial with the three-legged dog, powering a 2-liter bottle of Diet Coke and devouring a bag of Kettle Salt & Vinegar potato chips, calculating the productive worth of the three-legged dog, unmoved by the sentimental appeal. Larry grabs a dictaphone: "Item: How to end dog-gassings? Solution: Ship all three-legged stray dogs to sub-Saharan Africa. Africans won't even notice. Dogs saved. Private capital freed up. Problem solved."
So some of you have no hearts, and some of us have no shame. But we all do understand how vital Naked Capitalism has been in educating us. I'm sure that the other side knows how dangerous a site like this is, because as we become more educated and more political, we become more and more of a threat.
The oligarchy has spent decades on a project to "defund the Left," and they've succeeded in ways we're only just now grasping. "Defunding the Left" doesn't mean denying funds to the rotten Democratic Party; it means defunding everything that threatens the 1%'s hold on wealth and power.
One of their greatest successes, whether by design or not, has been the gutting of journalism, shrinking it down to a manageable size where its integrity can be drowned in a bathtub. It's nearly impossible to make a living as a journalist these days; and with the economics of the journalism business still in free-fall like the Soviet refrigerator industry in the 1990s, media outlets are even less inclined to challenge power, journalists are less inclined to rock the boat than ever, and everyone is more inclined to corruption (see: Washington Post, Atlantic Monthly). A ProPublica study in May put it in numbers: In 1980, the ratio of PR flaks to journalists was roughly 1:3. In 2008, there were 3 PR flaks for every 1 journalist. And that was before the 2008 shit hit the journalism fan.
This is what an oligarchy looks like. I saw the exact same dynamic in Russia under Yeltsin: When he took power in 1991, Russia had the most fearless and most ideologically diverse journalism culture of any I've ever seen, a lo-fi, hi-octane version of American journalism in the 1970s. But as soon as Yeltsin created a class of oligarchs to ensure his election victory in 1996, the oligarchs snapped up all the free media outlets, and forced out anyone who challenged power, one by one. By the time Putin came to power, all the great Russian journalists that I and Taibbi knew had abandoned the profession for PR or political whoring. It was the oligarchy that killed Russian journalism; Putin merely mopped up a few remaining pockets of resistance.
The only way to prevent that from happening to is to support the best of what we have left. Working for free sucks. It can't hold, and it won't.
There are multiple ways to give. The first is here on the blog, the Tip Jar , which takes you to PayPal. There you can use a debit card, a credit card or a PayPal account (the charge will be in the name of Aurora Advisors).
You can also send a check (or multiple post dated checks) in the name of Aurora Advisors Incorporated to
Aurora Advisors Incorporated
903 Park Avenue, 8th Floor
New York, NY 10075Please also send an e-mail to [email protected] with the headline "Check is in the mail" (and just the $ en route in the message) to have your contribution included in the total number of donations.
So donate now to Naked Capitalism . If you can't afford much, give what you can. If you can afford more, give more. If you can give a lot, give a lot. Whether you can contribute $5 or $5,000, it will pay for itself, I guarantee you. This isn't just giving, it's a statement that you are want a different debate, a different society, and a different culture.
Who knows, maybe we'll win; maybe we'll even figure out a way to seal Larry Summers in a kind of space barge, and fire him off into deep space, to orbit Uranus for eternity. Yves? Could it be financed?
susan the other October 22, 2016 at 10:30 am rusti October 22, 2016 at 10:51 amthanks – i forgot how funny this one was
JTMcPhee October 22, 2016 at 11:19 amAnd you-look at you, sitting there with your Chunky Monkey and your central heating, what kind of sick bastard are you? Get your goddamn Visa Mastercard out and send money to Rusty, or else his death is on your head. I hope you sleep well at night.
I'd already shelled out for the NC fundraiser, but this one got me to pull out the MasterCard and finally get around to becoming a subscriber to Ames' fantastic Radio War Nerd podcast, which I discovered thanks to the NC commentariat.
Interesting how people become the Other over time. Go back to the videos of crowds taunting and attacking black kids being escorted by federal marshals into "white" schools, and you see clean-shaven crew cuts and perms and wife-beater t-shirts and pegged pants and real boots. Go look at the videos of redneck activity now, NASCAR and "mudding" (pickups with huge tires and engines slogging through pits of slimy red Georgia mud" and gatherings of motorboats on Southern lakes, and it's all beards and pony tails (on guys and gals? Says Jeff Foxworthy) and tie-died clothing (along with the Confederate battle flags and gunz and all.
I got my BA in history from Lake Forest College, in a snotty sick-wealthy northern suburb of Chicago. https://en.wikipedia.org/wiki/Lake_Forest_College My years there, '69-72, after my volunteer "service" in the US Army and a year doing "Racket" duty in Vietnam, were a "hippie" tour de force. All social concerns and "anti-war" (actually "escape the draft" by young people who were largely those who could not get into the really prestigious Ivy League facilities, despite great family wealth, or who had been booted from the same. Heavy drug use, supine administration ("laissez faire"), endless debates over Marxism Leninism Trotskyism etc. Ineffectual "peace marches," to do stuff like "blocking" an unused entrance to Ft. Sheridan, just down the road - a few TV reporters to document the tomfoolery - "Stop The War Machine!" Motions toward communes, DOA when the practicalities of sharing, comity, ran up against the selfish consumerism of the privileged: ""I don't get my own room and stereo? I get to copulate with others, but you, my steady, must remain my sole property!" It helped the transformation that the daughter of the Dean did a Janis Joplin at the very end of my matriculation there - all of a sudden the local police were invited in, to search student rooms and cars and engage in all the funsies of "drug enforcement" with stings, etc.
Lake Forest very quickly morphed, once the draft ended, into a very much focused "business school," to teach the young budding not-ready-for-MIT-or-Wharton capitalists the rudiments of their craft. Graduating about 450 looting-ready young folks a year. ?(Not all of them, of course…) Pretty amazing, not surprising.
Neither the rednecks nor the "hippies" were much interested in what the parasites were doing to "FIRE" over those decades and generations. That's the thing about parasites: most of what they do is invisible until the infection gets severe and vital organs are damaged, while the host goes about generating the nutrition that feeds the critters until whooops! Time to shed some segments into the water supply, lay some eggs, encyst, find another host…
|
|
|
Jan 30, 2012 | www.wsws.org
... ... ...
This analysis has been vindicated by scholarly investigations into the causes of the Soviet economic collapse that facilitated the bureaucracy's dissolution of the USSR. In Russia Since 1980, published in 2008 by Cambridge University Press, Professors Steven Rosefielde and Stefan Hedlund present evidence that Gorbachev introduced measures that appear, in retrospect, to have been aimed at sabotaging the Soviet economy. "Gorbachev and his entourage," they write, "seem to have had a venal hidden agenda that caused things to get out of hand quickly." [p. 38] In a devastating appraisal of Gorbachev's policies, Rosefielde and Hedlund state:
History reveals that the grandsons of the Bolshevik coup d'état didn't destroy the Soviet Union in a valiant effort to advance the cause of communist prosperity or even to return to their common European home; instead, it transformed Soviet managers and ministers into roving bandits (asset-grabbing privateers) with a tacit presidential charter to privatize the people's assets and revenues to themselves under the new Muscovite rule of men. [p. 40]
Instead of displaying due diligence over personal use of state revenues, materials and property, inculcated in every Bolshevik since 1917, Gorbachev winked at a counterrevolution from below opening Pandora's Box. He allowed enterprises and others not only to profit maximize for the state in various ways, which was beneficial, but also to misappropriate state assets, and export the proceeds abroad. In the process, red directors disregarded state contracts and obligations, disorganizing inter-industrial intermediate input flows, and triggering a depression from which the Soviet Union never recovered and Russia has barely emerged. [p. 47]
Given all the heated debates that would later ensue about how Yeltsin and his shock therapy engendered mass plunder, it should be noted that the looting began under Gorbachev's watch. It was his malign neglect that transformed the rhetoric of Market Communism into the pillage of the nation's assets.
The scale of this plunder was astounding. It not only bankrupted the Soviet Union, forcing Russian President Boris Yeltsin to appeal to the G-7 for $6 billion of assistance on December 6, 1991, but triggered a free fall in aggregate production commencing in 1990, aptly known as catastroika.
In retrospect, the Soviet economy didn't collapse because the liberalized command economy devised after 1953 was marked for death. The system was inefficient, corrupt and reprehensible in a myriad of ways, but sustainable, as the CIA and most Sovietologists maintained. It was destroyed by Gorbachev's tolerance and complicity in allowing privateers to misappropriate state revenues, pilfer materials, spontaneously privatize, and hotwire their ill-gotten gains abroad, all of which disorganized production. [p. 49]
The analysis of Rosefielde and Hedlund, while accurate in its assessment of Gorbachev's actions, is simplistic. Gorbachev's policies can be understood only within the framework of more fundamental political and socioeconomic factors. First, and most important, the real objective crisis of the Soviet economy (which existed and preceded by many decades the accession of Gorbachev to power) developed out of the contradictions of the autarkic nationalist policies pursued by the Soviet regime since Stalin and Bukharin introduced the program of "socialism in one country" in 1924. The rapid growth and increasing complexity of the Soviet economy required access to the resources of the world economy. This access could be achieved only in one of two ways: either through the spread of socialist revolution into the advanced capitalist countries, or through the counterrevolutionary integration of the USSR into the economic structures of world capitalism.
For the Soviet bureaucracy, a parasitic social caste committed to the defense of its privileges and terrified of the working class, the revolutionary solution to the contradictions of the Soviet economy was absolutely unthinkable. The only course that it could contemplate was the second-capitulation to imperialism. This second course, moreover, opened for the leading sections of the bureaucracy the possibility of permanently securing their privileges and vastly expanding their wealth. The privileged caste would become a ruling class. The corruption of Gorbachev, Yeltsin and their associates was merely the necessary means employed by the bureaucracy to achieve this utterly reactionary and immensely destructive outcome.
On October 3, 1991, less than three months before the dissolution of the USSR, I delivered a lecture in Kiev in which I challenged the argument-which was widely propagated by the Stalinist regime-that the restoration of capitalism would bring immense benefits to the people. I stated:
In this country, capitalist restoration can only take place on the basis of the widespread destruction of the already existing productive forces and the social- cultural institutions that depended upon them. In other words, the integration of the USSR into the structure of the world capitalist economy on a capitalist basis means not the slow development of a backward national economy, but the rapid destruction of one which has sustained living conditions which are, at least for the working class, far closer to those that exist in the advanced countries than in the third world. When one examines the various schemes hatched by proponents of capitalist restoration, one cannot but conclude that they are no less ignorant than Stalin of the real workings of the world capitalist economy. And they are preparing the ground for a social tragedy that will eclipse that produced by the pragmatic and nationalistic policies of Stalin. ["Soviet Union at the Crossroads," published in The Fourth International (Fall- Winter 1992, Volume 19, No. 1, p. 109), Emphasis in the original.]
Almost exactly 20 years ago, on January 4, 1992, the Workers League held a party membership meeting in Detroit to consider the historical, political and social implications of the dissolution of the USSR. Rereading this report so many years later, I believe that it has stood the test of time. It stated that the dissolution of the USSR "represents the juridical liquidation of the workers' state and its replacement with regimes that are openly and unequivocally devoted to the destruction of the remnants of the national economy and the planning system that issued from the October Revolution. To define the CIS [Confederation of Independent States] or its independent republics as workers states would be to completely separate the definition from the concrete content which it expressed during the previous period." [David North, The End of the USSR, Labor Publications, 1992, p. 6]
The report continued:
"A revolutionary party must face reality and state what is. The Soviet working class has suffered a serious defeat. The bureaucracy has devoured the workers state before the working class was able to clean out the bureaucracy. This fact, however unpleasant, does not refute the perspective of the Fourth International. Since it was founded in 1938, our movement has repeatedly said that if the working class was not able to destroy this bureaucracy, then the Soviet Union would suffer a shipwreck. Trotsky did not call for political revolution as some sort of exaggerated response to this or that act of bureaucratic malfeasance. He said that a political revolution was necessary because only in that way could the Soviet Union, as a workers state, be defended against imperialism." [p. 6]
I sought to explain why the Soviet working class had failed to rise up in opposition to the bureaucracy's liquidation of the Soviet Union. How was it possible that the destruction of the Soviet Union-having survived the horrors of the Nazi invasion-could be carried out "by a miserable group of petty gangsters, acting in the interests of the scum of Soviet society?" I offered the following answer:
We must reply to these questions by stressing the implications of the massive destruction of revolutionary cadre carried out within the Soviet Union by the Stalinist regime. Virtually all the human representatives of the revolutionary tradition who consciously prepared and led that revolution were wiped out. And along with the political leaders of the revolution, the most creative representatives of the intelligentsia who had flourished in the early years of the Soviet state were also annihilated or terrorized into silence.
Furthermore, we must point to the deep-going alienation of the working class itself from state property. Property belonged to the state, but the state "belonged" to the bureaucracy, as Trotsky noted. The fundamental distinction between state property and bourgeois property-however important from a theoretical standpoint-became less and less relevant from a practical standpoint. It is true that capitalist exploitation did not exist in the scientific sense of the term, but that did not alter the fact that the day-to-day conditions of life in factories and mines and other workplaces were as miserable as are to be found in any of the advanced capitalist countries, and, in many cases, far worse.
Finally, we must consider the consequences of the protracted decay of the international socialist movement...
Especially during the past decade, the collapse of effective working class resistance in any part of the world to the bourgeois offensive had a demoralizing effect on Soviet workers. Capitalism assumed an aura of "invincibility," although this aura was merely the illusory reflection of the spinelessness of the labor bureaucracies all over the world, which have on every occasion betrayed the workers and capitulated to the bourgeoisie. What the Soviet workers saw was not the bitter resistance of sections of workers to the international offensive of capital, but defeats and their consequences. [p. 13-14]
The report related the destruction of the USSR by the ruling bureaucracy to a broader international phenomenon. The smashing up of the USSR was mirrored in the United States by the destruction of the trade unions as even partial instruments of working-class defense.
In every part of the world, including the advanced countries, the workers are discovering that their own parties and their own trade union organizations are engaged in the related task of systematically lowering and impoverishing the working class. [p. 22]
Finally, the report dismissed any notion that the dissolution of the USSR signified a new era of progressive capitalist development.
Millions of people are going to see imperialism for what it really is. The democratic mask is going to be torn off. The idea that imperialism is compatible with peace is going to be exposed. The very elements which drove masses into revolutionary struggle in the past are once again present. The workers of Russia and the Ukraine are going to be reminded why they made a revolution in the first place. The American workers are going to be reminded why they themselves in an earlier period engaged in the most massive struggles against the corporations. The workers of Europe are going to be reminded why their continent was the birthplace of socialism and Karl Marx. [p. 25]
The aftermath of the dissolution of the USSR: 20 years of economic crisis, social decay, and political reaction
According to liberal theory, the dissolution of the Soviet Union ought to have produced a new flowering of democracy. Of course, nothing of the sort occurred-not in the former USSR or, for that matter, in the United States. Moreover, the breakup of the Soviet Union-the so-called defeat of communism-was not followed by a triumphant resurgence of its irreconcilable enemies in the international workers' movement, the social democratic and reformist trade unions and political parties. The opposite occurred. All these organizations experienced, in the aftermath of the breakup of the USSR, a devastating and even terminal crisis. In the United States, the trade union movement-whose principal preoccupation during the entire Cold War had been the defeat of Communism-has all but collapsed. During the two decades that followed the collapse of the Soviet Union, the AFL-CIO lost a substantial portion of its membership, was reduced to a state of utter impotence, and ceased to exist as a workers' organization in any socially significant sense of the term. At the same time, everywhere in the world, the social position of the working class-from the standpoint of its influence on the direction of state policy and its ability to increase its share of the surplus value produced by its own labor-deteriorated dramatically.
Certain important conclusions flow from this fact. First, the breakup of the Soviet Union did not flow from the supposed failure of Marxism and socialism. If that had been the case, the anti-Marxist and antisocialist labor organizations should have thrived in the post-Soviet era. The fact that these organizations experienced ignominious failure compels one to uncover the common feature in the program and orientation of all the so-called labor organizations, "communist" and anticommunist alike. What was the common element in the political DNA of all these organization? The answer is that regardless of their names, conflicting political alignments and superficial ideological differences, the large labor organizations of the post-World War II period pursued essentially nationalist policies. They tied the fate of the working class to one or another nation-state. This left them incapable of responding to the increasing integration of the world economy. The emergence of transnational corporations and the associated phenomena of capitalist globalization shattered all labor organizations that based themselves on a nationalist program.
The second conclusion is that the improvement of conditions of the international working class was linked, to one degree or another, to the existence of the Soviet Union. Despite the treachery and crimes of the Stalinist bureaucracy, the existence of the USSR, a state that arose on the basis of a socialist revolution, imposed upon American and European imperialism certain political and social restraints that would otherwise have been unacceptable. The political environment of the past two decades-characterized by unrestrained imperialist militarism, the violations of international law, and the repudiation of essential principles of bourgeois democracy-is the direct outcome of the dissolution of the Soviet Union.
The breakup of the USSR was, for the great masses of its former citizens, an unmitigated disaster. Twenty years after the October Revolution, despite all the political crimes of the Stalinist regime, the new property relations established in the aftermath of the October Revolution made possible an extraordinary social transformation of backward Russia. And even after suffering horrifying losses during the four years of war with Nazi Germany, the Soviet Union experienced in the 20 years that followed the war a stupendous growth of its economy, which was accompanied by advances in science and culture that astonished the entire world.
But what is the verdict on the post-Soviet experience of the Russian people? First and foremost, the dissolution of the USSR set into motion a demographic catastrophe. Ten years after the breakup of the Soviet Union, the Russian population was shrinking at an annual rate of 750,000. Between 1983 and 2001, the number of annual births dropped by one half. 75 percent of pregnant women in Russia suffered some form of illness that endangered their unborn child. Only one quarter of infants were born healthy.
The overall health of the Russian people deteriorated dramatically after the restoration of capitalism. There was a staggering rise in alcoholism, heart disease, cancer and sexually transmitted diseases. All this occurred against the backdrop of a catastrophic breakdown of the economy of the former USSR and a dramatic rise in mass poverty.
As for democracy, the post-Soviet system was consolidated on the basis of mass murder. For more than 70 years, the Bolshevik regime's dissolution of the Constituent Assembly in January 1918-an event that did not entail the loss of a single life-was trumpeted as an unforgettable and unforgivable violation of democratic principles. But in October 1993, having lost a majority in the popularly elected parliament, the Yeltsin regime ordered the bombardment of the White House-the seat of the Russian parliament-located in the middle of Moscow. Estimates of the number of people who were killed in the military assault run as high as 2,000. On the basis of this carnage, the Yeltsin regime was effectively transformed into a dictatorship, based on the military and security forces. The regime of Putin-Medvedev continues along the same dictatorial lines. The assault on the White House was supported by the Clinton administration. Unlike the dissolution of the Constituent Assembly, the bombardment of the Russian parliament is an event that has been all but forgotten.
What is there to be said of post-Soviet Russian culture? As always, there are talented people who do their best to produce serious work. But the general picture is one of desolation. The words that have emerged from the breakup of the USSR and that define modern Russian culture, or what is left of it, are "mafia," "biznessman" and "oligarch."
What has occurred in Russia is only an extreme expression of a social and cultural breakdown that is to be observed in all capitalist countries. Can it even be said with certainty that the economic system devised in Russia is more corrupt that that which exists in Britain or the United States? The Russian oligarchs are probably cruder and more vulgar in the methods they employ. However, the argument could be plausibly made that their methods of plunder are less efficient than those employed by their counterparts in the summits of American finance. After all, the American financial oligarchs, whose speculative operations brought about the near-collapse of the US and global economy in the autumn of 2008, were able to orchestrate, within a matter of days, the transfer of the full burden of their losses to the public.
It is undoubtedly true that the dissolution of the USSR at the end of 1991 opened up endless opportunities for the use of American power-in the Balkans, the Middle East and Central Asia. But the eruption of American militarism was, in the final analysis, the expression of a more profound and historically significant tendency-the long-term decline of the economic position of American capitalism. This tendency was not reversed by the breakup of the USSR. The history of American capitalism during the past two decades has been one of decay. The brief episodes of economic growth have been based on reckless and unsustainable speculation. The Clinton boom of the 1990s was fueled by the "irrational exuberance" of Wall Street speculation, the so-called dot.com bubble. The great corporate icons of the decade-of which Enron was the shining symbol-were assigned staggering valuations on the basis of thoroughly criminal operations. It all collapsed in 2000-2001. The subsequent revival was fueled by frenzied speculation in housing. And, finally, the collapse in 2008, from which there has been no recovery.
When historians begin to recover from their intellectual stupor, they will see the collapse of the USSR and the protracted decline of American capitalism as interrelated episodes of a global crisis, arising from the inability to develop the massive productive forces developed by mankind on the basis of private ownership of the means of production and within the framework of the nation-state system.
|
|
|
Oct 10, 2016 | www.nakedcapitalism.com
Monist Lisa October 10, 2016 at 2:51 pm
Monist Lisa October 10, 2016 at 2:55 pmMore evidence Larry Summers is in recovery from autistsm-spectrum economics?
Concretely, this means rejecting austerity economics in favour of investment economics. At a time when markets are pointing to the problem over the next generation as being inadequate rather than excessive inflation, central bankers need to spur demand and co-operate with governments.
Enhancing infrastructure investment in the public and private sector should be a fiscal policy priority.
allan October 10, 2016 at 3:37 pmhunkerdown October 10, 2016 at 3:58 pmToo little, too late.
The time for him to speak up was late 2008 – early 2009.
Actually, Summers did speak up. And the rest is history.Monist Lisa October 10, 2016 at 7:54 pmYou bourgeoisie had better can the autism insults or you'll find yourself in a world you no longer understand because your "inferiors" told you to take a long walk off a short pier.
It is perfectly economically rational for any one of us to go medieval on you, every bit as much as it is for a Black man to cap you for using the N-bomb. Get over yourself. Now.
Otis B Driftwood October 10, 2016 at 4:11 pmBeing on the autism spectrum myself I take exception to your rash mixing of metaphors.
Spring Texan October 10, 2016 at 7:02 pmWell, even if his lips are moving and the words seem to be coming out right, should Summers get anywhere close to implementation (God forbid), he'll screw it up or corrupt it catastrophically.
It's what he does. Fails upward and sideways and diagonally.
He is the model of failure of an entire generation.
Yep. Too right; your first sentence is on the money.
|
|
|
crookedtimber.org
Anarcissie,
@431
Harvard mafia actions were, of cause, a crime of the century. The collapse of the Russian economy exceeded the worst declines in the West during the 1930s depression almost twice. But truth be told the system was rotting from within and they could operate only by relying on the local "fifth column" of neoliberalization (Gaidar, Yakovlev, etc).
"A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murderer is less to fear. The traitor is the plague."
Marcus Tullius Cicero
|
|
|
Oct 08, 2016 | crookedtimber.org
stevenjohnson 10.06.16 at 1:06 pm 42 7
likbez@415"USSR nomenklatura is yet another example of the same. It was so close in spirit to neoliberal elite, that the transition in 1991 was almost seamless." Yes, well, it is impossible for someone as limited as myself to comment on your spiritual knowledge. But on a more earthly plane, it is not so obvious that the oligarchs and their favored employees are (or were) drawn from the nomenklatura, that there was no change in personnel in the rulers of the new Russia. Gennady Zyuganov and his KPRF of course are the prime recruiting grounds for adminstration, and the favored home of Russian businessment. But, quite aside from the gaping seam of the attempted removal of Gorbachev in 1991, there are quite a few other seams. Yeltsin's attack on parliament, for instance, strikes me as seamy indeed. But you may feel this sort of thing is just law enforcement. Your insistence that the old CP members never noticed a change, except they had official title, seems an extraordinary needing rather more support. A this point, it appears to be non-factual.
Will G-R @421 "One doesn't even have to compare different types of government to grasp this point, when in still-existing Communist Party regimes like the People's Republic of China, the party cadres are the neoliberal capitalist elites, no political transition required at all. It's George Orwell's final ironic revenge on those who would conscript his Animal Farm into service as a procapitalist propaganda tract: they forget that the final lines aren't just an indictment of the pigs (Communist nomenklatura) for being no better than the men (capitalists) but also of the men for being no better than the pigs."
Two issues arise. First, there are rather obvious transitional points even to reaching today's regime in China. Although such events as the Ching Ming disturbances, the Democracy Wall protests, the slow motion journee at Tian An Men square may have formally failed their aims, there is little reason to doubt powerful effects. The coup that overthrew the so-called Gang of Four was however a huge and extremely obvious transition. Deng's invasion of Vietnam to seal the opening to the US was notable as well.
Not so long ago, the current leadership purged Bo Xilai relying on testimony from people in admitted contact with foreign powers. How this sort of thing doesn't count is a mystery to me.
What is not so mysterious is the belief that China is now a capitalist country with the essence of Communism, dictatorship as opposed to the glorious benefits of classless American-style democracy. It is to be expected that any admirer of Orwell would firmly believe, without a moment's hesitation, that a capitalist economy can abolish the business cycle. I think that's silly, but then, I'm not an admirer of Orwell.
Second, the final lines of Animal Farm are a prediction about the real world. The point about the men being no better than pigs is irrelevant. The point is that the pigs were men, i.e., the same as capitalist oppressors. Aside from being manifest nonsense, this prediction was of course falsified by history. Any notion that the late USSR was a totalitarian terror regime was nonsense. But even if it were, the execution of Beria, Zhukov's coup against the so-called anti-party group, the removal of Khrushchev, the shenanigans of Gorbachev, give the lie to the notion that Stalinism was unchangeable. As for the notion that Soviet socialism was the same as capitalism? Only virulent anti-Communism could make such nonsense acceptable for a minute.
The final lines have to be read in context with early lines as well. In those lines, Orwell compares the horrors of the Great War to a farm getting run down. It takes a vile human being to do that.
Will G-R 10.06.16 at 2:45 pm 428
Lee, if all you're willing to do is compose minor variations on the theme of "you're a fundamentalist! Marxism is a religion!", you don't seem ready to sit at the big-kids' discussion table. I alluded to the idea of Marxist doctrine as dogmatic catechism in an ironic way back @ the second paragraph of #208, but the more serious point from that graf seems relevant here too.Steven, you seem to be confused as to what point I was actually making, albeit understandably so because I wasn't entirely clear (which is perhaps a natural outcome of spending too much time trying to get through to liberals). The point isn't that literally no political events have taken place at all in the modern People's Republic of China, it's that the transition from state socialism to neoliberal capitalism didn't require an outright abolition of centralized Party control the way it did in the former USSR. I entirely agree with you about the nonsensical contradictions of the typical Cold Warrior critique, especially when it comes to the USSR: in particular, the economic dynamism of Stalin's time and the relatively dialed-down political repression after the Khrushchev thaw are typically minimalized in order to emphasize the brutality of the Stalin era and the post-Stalin economic stagnation, with no effort to coherently account for any real political or economic shifts within the formal framework of Soviet state socialism. I didn't intend to make such a simpleminded critique, although again I can see how it might have come across that way.
And neither did I claim to be any great admirer of George Orwell; everything else about his political line aside, nobody who rats out fellow leftists to Red Scare witch-hunters can deserve too much esteem, especially when this involves outing people as gay in the UK in the 1940s. Still, to the extent that he was a leftist critic of actually existing socialisms and has been anachronistically beatified by liberal Cold Warriors as a critic of all socialist projects as inherently repressive, it's hard to deny that liberals' adoption of Animal Farm into their ideological canon has a certain poetic kick given that today's most prominent remaining "actually existing socialists" are among the most ruthless and effective administrators of global imperial capitalism.
likbez 10.07.16 at 3:36 am 430
stevenjohnson,
@427
likbez@415 " But on a more earthly plane, it is not so obvious that the oligarchs and their favored employees are (or were) drawn from the nomenklatura, that there was no change in personnel in the rulers of the new Russia."This is a topic way too complex for the posts like this one, but considerable part of new Russian neoliberal elite did come from nomenklatura. The most brutal, the most criminal oligarchs came from academia (Berezovsky) and Komsomol elite ( Khodarkovski, in Ukraine Turchinov - who actually was the head of propaganda department of Komsomol )
Gennady Zyuganov and his KPRF of course are the prime recruiting grounds for adminstration, and the favored home of Russian businessment.
This is simply wrong. This is a statement, completely disconnected with reality.
But, quite aside from the gaping seam of the attempted removal of Gorbachev in 1991, there are quite a few other seams. Yeltsin's attack on parliament, for instance, strikes me as seamy indeed.
You are mixing two events which are on completely opposite sides of barricades.
- Attempt to remove Gorbachov (which might well be initiated by Gorbachov himself, who became afraid that he went too far) was attempt by anti-neoliberal forces to stop and reverse neoliberalization of Russia. It failed because the train already left the station and neoliberal forces became quite strong in Russia.
- Yeltsin's attack on parliament was essentially a successful attempt to suppress forces that were against neoliberalization and plundering of Russia (as well as threats to personal power f Yeltsin as Pinochet style dictator). Kind of Russian variant of the Night of the Long Knives.
Your insistence that the old CP members never noticed a change, except they had official title, seems an extraordinary needing rather more support. A this point, it appears to be non-factual.
You completely misunderstood and misinterpreted my point. The essence was that certain substratas of Soviet nomenklatura mainly connected with KGB, Komsomol, Ministry of Foreign Affairs, Ministry of Foreign Trade, Academia ( and a couple of other institutions) changed camps and become turncoats fighting tooth and nail for the establishing neoliberal regime in Russia by using "color revolution" mechanisms and relying on support and financing from the USA and other foreign powers (to the tune on one billion in cash) and then helping foreign powers to plunder Russia (which was favorite pastime of many members of Clinton criminal administration; for example Summers).
Kind of Russian variation of Chicago boys. Or like a bunch of US Trotskyites which became neocons.
Anarcissie 10.07.16 at 3:56 am 431
likbez 10.07.16 at 3:36 am @ 430:
'… Summers….This reminds me to yet once again mention How Harvard Lost Russia where Summers is a featured supporting character. Best read it now; copies of it seem to be evaporating from the Net for some reason. A crucial document.
|
|
|
Feb 27, 2006 | institutionalinvestor.com
Since being named president of Harvard University in 2001, former U.S. Treasury secretary Lawrence Summers has sparked a series of controversies that have grabbed headlines. Summers incurred the wrath of African-Americans when he belittled the work of controversial religion professor Cornel West (who left for Princeton University); last year he infuriated faculty and students alike when he seemed to disparage the innate scientific abilities of women at a Massachusetts economic conference, igniting a national uproar that nearly cost him his job; last fall brought the departure of Jack Meyer, the head of Harvard Management Co., which oversees the school's endowment but had inflamed some in the community because of the multimillion-dollar salaries it pays some of its managers.
Then, in quiet contrast, there is the case of economics professor Andrei Shleifer, who in the mid-1990s led a Harvard advisory program in Russia that collapsed in disgrace. In August, after years of litigation, Harvard, Shleifer and others agreed to pay at least $31 million to settle a lawsuit brought by the U.S. government. Harvard had been charged with breach of contract, Shleifer and an associate, Jonathan Hay, with conspiracy to defraud the U.S. government.
Shleifer remains a faculty member in good standing. Colleagues say that is because he is a close longtime friend and collaborator of Summers.
In the following pages investigative journalist David McClintick, a Harvard alumnus, chronicles Shleifer's role in the university's Russia Project and how his friendship with Summers has protected him from the consequences of that debacle inside America's premier academic institution.
ff duty and in swimsuits, the mentor and his protégé strolled the beach at Truro. For years, with their families, they had summered together along this stretch of Massachusetts' famed Cape Cod. Close personally and professionally, the two friends confided in each other the most private matters of family and finance. The topic of the day was the former Soviet Union.
"You've got to be careful," the mentor, Lawrence Summers, warned his protégé, Andrei Shleifer. "There's a lot of corruption in Russia."
It was late August 1996, and Summers, 42, was deputy secretary of the U.S. Treasury. Shleifer, 35, was a rising star in the Harvard University economics department, just as Summers had been 15 years earlier when he had first taken Shleifer under his wing.
Summers' warning rose out of their pivotal roles in a revolution of global consequence -- the attempt to bring the Russian economy out from the ruins of communism into the promise of Western-style capitalism. Summers, as Treasury's second-in-command, was the architect of U.S. efforts to help Russia. Shleifer's involvement was more intimate. Traveling frequently to Moscow, he was directing key elements of the reform effort under the banner of the renowned Harvard Institute for International Development.
Working on contract for the U.S., HIID advised the Russian government on privatizing its economy and creating capital markets and the laws and institutions to regulate them. Shleifer did not report formally to Summers but rather to the State Department's Agency for International Development, or AID, the spearhead of the U.S.'s foreign aid program.
Personal affection as much as official concern prompted Summers' admonition. He had come to know that Shleifer and his wife, Nancy Zimmerman, a noted hedge fund manager, had been investing in Russia. Though he didn't know specifics, he understood just enough to worry that the couple might run afoul of myriad conflict-of-interest regulations that barred American advisers from investing in the countries they were assisting.
Summers did not restrict his warnings to Shleifer.
"There might be a scandal, and you could become embroiled," Summers told Zimmerman. "You should make sure you're clear with everybody. People might want to make Andrei a problem some day. The world's a shitty place."
Summers' warnings proved at once prophetic and ineffectual. Even as Shleifer and his wife strove to reassure their friend, they were maneuvering to make an investment in Russia's first authorized mutual fund company. Within eight months their private Russian dealings, together with those of close associates and relatives, would explode in scandal -- bringing dishonor to them, Harvard University and the U.S. government. The Department of Justice would deploy the Federal Bureau of Investigation and the U.S. Attorney's Office in Boston to launch a criminal investigation that would uncover evidence of fraud and money laundering, as well as the cavalier use of U.S. government funds to support everything from tennis lessons to vacation boondoggles for Harvard employees and their spouses, girlfriends and Russian pals. It would, in the end, be an extraordinary display of an overweening "best and brightest" arrogance toward the laws and rules that the Harvard people were supposed to live by.
Says one banker who was a frequent visitor to Russia in that era, "The Harvard crowd hurt themselves, they hurt Harvard, and they hurt the U.S. government."
Mostly, they hurt Russia and its hopes of establishing a lasting framework for a stable Western-style capitalism, as Summers himself acknowledged when he testified under oath in the U.S. lawsuit in Cambridge in 2002. "The project was of enormous value," said Summers, who by then had been installed as the president of Harvard. "Its cessation was damaging to Russian economic reform and to the U.S.-Russian relationship."
Reinventing Russia was never going to be easy, but Harvard botched a historic opportunity. The failure to reform Russia's legal system, one of the aid program's chief goals, left a vacuum that has yet to be filled and impedes the country's ability to confront economic and financial challenges today (see box, page 77).
Harvard vigorously defended its work in Russia, but in 2004, after protracted legal wranglings, a judge in federal district court in Boston ruled that the university had breached its contract with the U.S. government and that Shleifer and an associate were liable for conspiracy to defraud the U.S. Last August, nine years after Summers and his protégé took their stroll along that Truro beach, Harvard, Shleifer and associates agreed to pay the government $31 million-plus to settle the case. Shleifer and Zimmerman were forced to mortgage their house to secure their part of the settlement.
Russia's struggles today certainly don't result entirely from Harvard's misdeeds or Shleifer's misconduct. There is plenty of blame to share. It is difficult to overstate the challenge of transforming the economic and legal culture, not to mention the ancient pathologies, of a huge, enigmatic nation that once spanned one sixth of the earth's land surface, 150 ethnicities and 11 time zones. The Marshall Plan, by comparison, was simple.
Summers wasn't president of Harvard when Shleifer's mission to Moscow was coming apart. But as a Harvard economics professor in the 1980s, a World Bank and Treasury official in the 1990s and Harvard's president since 2001, Summers was positioned uniquely to influence Shleifer's career path, to shape U.S. aid to Russia and Shleifer's role in it and even to shield Shleifer after the scandal broke. Though Summers, as Harvard president, recused himself from the school's handling of this case, he made a point of taking aside Jeremy Knowles, then the dean of the faculty of arts and sciences, and asking him to protect Shleifer.
Months after Harvard was forced to pay the biggest settlement in its history, largely because of his misdeeds, Shleifer remains on the faculty. No public action has been taken against him, nor is there any sign as this magazine goes to press in late December that any is contemplated.
Throughout the otherwise voluble university community, there has been an odd silence about the entire affair. Discussions mostly have taken place sotto voce in deans' offices or in local Cambridge haunts, such as the one where a well-connected Harvard personage expressed deep concern, telling II: "Larry's handling of the Shleifer matter raises very basic questions about the way he governs Harvard. This is fraught with significance. It couldn't be more fraught."
The silence is now beginning to break, thanks to the leadership of academic worthies like former Harvard College dean Harry Lewis, who is finishing a book about the university to be published in the spring by Perseus Public Affairs. Lewis agreed to show II the manuscript, in which he asserts, "The relativism with which Harvard has dealt with the Shleifer case undermines Harvard's moral authority over its students."
Whether this new questioning will erupt into yet another crisis engulfing Summers and the university remains unclear. What is certain, though, is that the story of Harvard and its representatives' malfeasance, told in full for the first time over the following pages, shows how much damage can be done when the considerable power and resources of the U.S. government are placed in the wrong hands.
THE SEEDS OF RUSSIAN REFORM WERE planted in the late 1980s -- when Russia was the Soviet Union and Harvard hadn't yet arrived. The U.S.S.R.'s seven-decade experiment with Marxist-Leninist totalitarianism lay in shambles. By 1989, even as the Berlin Wall fell in Germany, the Soviet Union and its economy were imploding.
Reform-minded Mikhail Gorbachev, the last general secretary of the Communist Party, strove to introduce limited economic and political change. The first competitive elections for the Congress of People's Deputies were held in March 1989. In May 1990, Gorbachev's populist rival, the maverick Boris Yeltsin, was elected chairman of the Russian Republic's Parliament. A month later Russia declared itself independent of the Soviet Union.
That summer Gorbachev and Yeltsin ordered two economists to draw up a "500 Days" plan for converting the Soviet Union to a market economy based on private property. Gorbachev also sought advice from the West. In October 1990 the then-chairman of the New York Stock Exchange, John Phelan Jr., led a group of U.S. securities lawyers and academics to Moscow to begin showing the Soviets how to form capital markets. The meeting was organized by the Big Board's Russian-speaking legal counsel, Richard Bernard, then 40.
... ... ...
|
|
|
Oct 01, 2016 | economistsview.typepad.com
RC AKA Darryl, Ron : October 01, 2016 at 06:13 AM
RE: Four Modifications To Fed's Current Posture - Larry Summers[It is wonderful to see Larry Summers has redeeming social value. As far as monetary policy goes then Larry has nailed it here.]
...First, it should acknowledge that the neutral rate is now close to zero and it may well remain under 2 percent for the foreseeable future...
...Second, it should acknowledge at least to itself that it has damaged its credibility by repeatedly holding out the prospects of much more tightening than the market anticipated, being ignored by the market, and then having the market turn out to be right. It should recognize output and inflation and unemployment would all be closer to their target levels today and in their forecasts if rates had not been increased last December...
...Third, the Fed should make real the idea that its inflation target is symmetric by being clear that in the late stage of prolonged expansion with low unemployment it is comfortable with inflation rising a little bit above 2 percent with the confidence that it will decline when the next recession comes...
... Fourth, the Fed should make clear that it sees risk as asymmetric right now...
[I can agree with all that without changing my view of last December's 25 basis point FFR hike. That hike did very little to change the economic conditions compared to how much it did to change the conversation. How could the hawks be capitulating to the doves now had they not gotten their chance to be proven wrong? That goes double for the neo-Fisherites.]
|
|
|
Sep 29, 2016 | economistsview.typepad.com
Larry Summers:The decline of the middle class is causing even more economic damage than we realized : I have just come across an International Monetary Fund working paper on income polarization in the United States that makes an important contribution to the secular stagnation debate. The authors ... find that polarization has reduced consumer spending by more than 3 percent or about $400 billion annually. If these findings stand up to scrutiny, they deserve to have a policy impact.David said...This level of reduction in spending is huge. For example, it exceeds by a significant margin the impact in any year of the Obama stimulus program. Alone it would be enough to account for a significant reduction in neutral real interest rates . If consumers were spending 3 percent more, there would be scope to maintain full employment at interest rates much closer to normal. And there would be much less of a problem of monetary policy's inability to respond to the next recession.
What is the policy implication? Principally, it is the macroeconomic importance of supporting middle class incomes. This can be done in a range of ways from promoting workers right to collectively bargain to raising spending on infrastructure to making the tax system more progressive. ...
Isn't the title of his article backward? Shouldn't it be "The economic damage wrought by those in power (including me) is causing the decline of the middle class". Poor Larry doesn't appear to understand cause and effect.
cm -> David...
You better believe the man is not stupid and understands this very well. Cue Upton Sinclair's "it is difficulty to convince a man to understand something" quote.
It is very common for former officials to come forward with critical accounts of current goings-on *including their own term in office* after they have retired from their post. While in office they can simply not let on this kind of thing. It is not polite, or inconsistent with what they are hired and paid to do. (Which is the second and here unstated part of the Sinclair quote.)
greg : September 29, 2016 at 01:10 PM
Let me see. The rich run the country, and the government. and they have figured out how to suck $400 Billion per year out of the real economy and into their financial pockets. And Larry proposes that the government, controlled by these same rich, remember, adopt policies which will put an end to the feeding frenzy.
Ha, Ha, Ha. No. I think not. Any policy our- *their* government would adopt would be purely cosmetic. If, after 40 years of depredations, they finally feel the need to put lipstick on this particular pig.
To be sure, 3 % per year will probably be lethal to society, and sooner rather than later. But, sustainability has never been a feature of capitalism.
rayward : September 29, 2016 at 12:22 PM
Polarization has reduced "consumer spending" by more than 3 percent or about $400 billion annually. Consumer spending. Not spending (investment). I'm not disagreeing with Summers, just pointing out the qualification.
Ben Groves -> rayward... September 29, 2016 at 01:08 PM
Even that "reduction" is debate-able. Summers ignores the credit boom and the 98-06 spending orgy. Credit markets drive spending more than base income. Ig spending starts rising "above potential" in 2017-19, then his thesis will collapse along with another correction/recession in the early 20's.
Most of the myth of the American middle class was a Nazi/Soviet driven illusion. America ran a "soft" national socialist economy during and after WWII. It was about organic cohesiveness between government, business and labor. It is part of the reason Hillary is getting her own white nationalist support, even though they don't like her.
Most of Trumps are ex-neocons, other various "old" white nationalist like conman, gambler David Duke (aka, I took my non-white mistress to France for a abortion) and other useless tools like Stormfront, which only represent 25% of the total "white nationalist" vote, yet because of jewish pact money, get the most noise in the media.
Trump supports a complete deregulation of capital markets while the Clinton's a modest firming of them. This is what people don't understand. It isn't trade that determines national production and consumption.
You simply can't bring back the Nazi/Soviet bubble back that created the late 20th century middle class. The Capitalists won't allow it. The system is going back to where it was in March of 1929. It always was.
ken melvin :
Well known, the housing prices in the Bay Area are insane. Along with goes the 'house poor' syndrome. The 'middle class' spends all it's money on housing, leaving little or nothing for such as dining out, skiing trips, triops o the beach, ...
As consequence, those restaurants that used to cater to the dining out of these folks are all closed. So, the little resort town stops, motels, ... on the way to ski resorts, the beach, etc.
Dan Kervick said...
The decline of the middle class IS economic damage, not just a cause of economic damage. You don't have to demonstrate that the decline of the middle class has had some negative impact on some further economic aggregate, such as the aggregate purchased output of consumables, in order to see it as a form of damage in itself.
pgl -> Dan Kervick...
I absolutely agree. So well said as this is a very important point. Regardless of all the other issues that may be attributable to income inequality - we need to address income inequality period.
vic twente -> pgl...
Yeah okay, except you might be able to explain it to the kleptocrats better if you use simple economics to show that there'll be more interest income for them if they just lift their jackboot off the throat of the working class, instead of trying to stripmine the West for dirt and dumping their trillions in tax haven accounts earning negative rates.
vic twente -> vic twente...
Point being it's the kleptocrat class who has to decide to let the working class gain some income improvement and increased ability to consume. Unless of course you're all for just killing the lot of them, in which case I merely find your position intriguing and may subscribe to your newsletter.
Dan Kervick -> vic twente...
I agree that's probably part of what Summers is up to in this piece. His audience is the big wheels, and he's probably aiming at convincing them that the problems of the middle class are ultimately their problem as well.
reason -> Dan Kervick...
Yes, let me third that. A very good point. Another case of treating the "economy" as that it is something that has a value independent of the people that it is supposed to be serving.
Who Ma Weeny said...
decline of the middle class is causing even more economic damage than we realized: I have just come across an International Monetary Fund working paper on income polarization in the United States that makes an important contribution to the secular stagnation
.....
policy implication? Principally, it is the macroeconomic importance of supporting middle class incomes. This can be done in a range of ways from promoting workers right
"By definition, income polarization is the divide between upper vs lower caste, not middle caste. Forget middletons! We need less contrast between upper and lower caste. Even Keynesian-s admit that it is the transfer of buying power from upper to lower caste that "stimulates", lower propensity to upper propensity to consume. Hell! LS, don't stop off in the middle!
A Boy Named Sue said...
Lets remember, Larry Summers was one of the persons who drove Brooksley Born out of town for sending up the red flag on toxic derivatives.
Summers was one of the free market crowd under Clinton, Rubin, and Greenspan who ignored the warnings of toxic derivative tradings.
While Summers is able to have a change of heart, unlike many conservatives, he was a part of the neo-liberal elite who helped crashed the economy.
Would I ever expect an apology out of him? No.
Tom aka Rusty -> A Boy Named Sue...
If I remember correctly Summers was a big advocate of "too big to prosecute" and had at least one ugly conversation with Elizabeth Warren at the White House.
Tom aka Rusty -> Tom aka Rusty ...
More correctly he did not want to prosecute foreclosure fraud because it might slow market clearing in the housing sector.
Chris Lowery said...
The median household income is approximately $56,000, therefore the IMF study places the breakpoint between "middle" and "high" income at $84,000 (150% of median income). It strikes me that this is unrealistically low. The really meaningful divergence in lifestyles and consumption behavior certainly occurs at a significantly higher level than this.
And if the authors had performed their analyses using a higher breakpoint, they probably would have seen much greater income stagnation and a greater divergence in the propensity to consume. I haven't delved into the math, but I'd guess they might have seen an even greater impact -- as if 3% weren't enough! -- on the economy from lower consumption.
The other question this study raises is, what is the quantifiable extent to which economic growth in the mid-90's to the mid-aughts (prior to the meltdown) was the result of the debt bubble (more broadly than just housing bubble). It would be very interesting to see an estimate of the aggregate impact on the economy has been from the suppression of workers' wages over the past several decades.
kaleberg said...
I don't have a lot of hope, but at least they are realizing that square wheels don't seem to rotate all that well. All of this was rather obvious back in 1930. That's why the New Deal created a US middle class, to get a sustainable economy. This is only non-obvious now thanks to a well funded disinformation campaign that succeeded in the 1980s.
David said...
I totally argree that middle class income stagnation and income inequality decrease aggregate demand and probably hurts consumer confidence. But it also creates political instability. For 40 years the Republican Party has resentment, tribalism, and increasingly less subtle racist tropes to push for policies that increase inequality and Trump is doing that on steroids.
The Republican Party needs be called out on this bait and switch.
reason said...
I don't follow the argument to be honest. The US has a chronic trade deficit. It doesn't actually suffer from inadequate domestic demand, but from an overvalued dollar. His argument might hold for other countries though.
That doesn't mean that a "hollowed-out" middle class doesn't have a negative impact on the economy, but it means that you won't see the problem looking at the macro-data (apart from productivity growth statistics perhaps) but in the structure of the economy. It is very hard to find a new high value added niche in mass markets today, because of the lack of disposable income of the masses.
Again, I appeal, please let us concentrate on more on the dynamics of the economy (for instance the life cycle of new products and new processes) and less on comparative static (equilibrium) perspective. Far too much talk about "growth" or "productivity" sees these processes as governed by magic, rather than by observable dynamics. I sincerely believe that this is the direction economics needs to go.
likbez said...
Such an article can be viewed as a sign of the collapse of neoliberal model.Summers was/is a staunch supporter of deregulation of financial sector. He also played a role of a hired gun in killing Glass-Steagall.
Later with his fees for speaking (for example, $135K for a single speech from Goldman Sachs) he became a walking illustration of the corruption of the academy by special interests. Essentially he became an academic lobbyist for financial industry.
During his stint in the Clinton administration, Summers was successful in pushing for capital gains tax cuts.
|
|
|
Apr 11, 2016 | economistsview.typepad.com
Larry Summers:What's behind the revolt against global integration? : Since the end of World War II, a broad consensus in support of global economic integration as a force for peace and prosperity has been a pillar of the international order. ...Tom aka Rusty : , Monday, April 11, 2016 at 07:15 AMThis broad program of global integration has been more successful than could reasonably have been hoped. ... Yet a revolt against global integration is underway in the West. ...
One substantial part of what is behind the resistance is a lack of knowledge. ...The core of the revolt against global integration, though, is not ignorance. It is a sense - unfortunately not wholly unwarranted - that it is a project being carried out by elites for elites, with little consideration for the interests of ordinary people. ...
Elites can continue on the current path of pursuing integration projects and defending existing integration, hoping to win enough popular support that their efforts are not thwarted. On the evidence of the U.S. presidential campaign and the Brexit debate, this strategy may have run its course. ...
Much more promising is this idea: The promotion of global integration can become a bottom-up rather than a top-down project. The emphasis can shift from promoting integration to managing its consequences. This would mean a shift from international trade agreements to international harmonization agreements, whereby issues such as labor rights and environmental protection would be central, while issues related to empowering foreign producers would be secondary. It would also mean devoting as much political capital to the trillions of dollars that escape taxation or evade regulation through cross-border capital flows as we now devote to trade agreements. And it would mean an emphasis on the challenges of middle-class parents everywhere who doubt, but still hope desperately, that their kids can have better lives than they did.
Is Summers really this naive?Jedgar Mihelic : , Monday, April 11, 2016 at 07:21 AMI think some fellows already had this idea: "Much more promising is this idea: The promotion of global integration can become a bottom-up rather than a top-down project" -- "Workers of the World, Unite. You have nothing to lose but your chains!" ~Marx/Engels, 1848pgl -> Jedgar Mihelic ... , Monday, April 11, 2016 at 07:28 AMKrugman sort of said this when he saw that apparel multinationals were shifting jobs out of China to Bangladesh. Like $3 an hour is just way too high for workers.pgl : Monday, April 11, 2016 at 07:32 AMA large part of the concern over free trade comes from the weak economic performances around the globe. Summers could have addressed this. Jared Bernstein and Dean Baker - both sensible economists - for example recently called on the US to do its own currency manipulation so as to reverse the US$ appreciation which is lowering our net exports quite a bit.Peter -> pgl... , Monday, April 11, 2016 at 08:12 AMWhat they left out is the fact that both China and Japan have seen currency appreciations as well. If we raise our net exports at their expense, that lowers their economic activity. Better would be global fiscal stimulus. I wish Larry had raised this issue here.
The "populists" are raging against global trade which benefits the world poor. The Very Serious economists know what is really going on and have to interests of the poor at heart. Plus they are smarter than the "populists" who are just dumb hippies.likbez -> pgl... , Monday, April 11, 2016 at 04:48 PM
pgl,Kgaard : , Monday, April 11, 2016 at 07:32 AMAnd what about neocolonialism and debt slavery ? http://historum.com/blogs/solidaire/245-debt-slavery-neo-colonialism-neoliberalism.html
=== quote ===
One of the most fundamental reasons for the poverty and underdevelopment of Africa (and of almost all "third world" countries) is neo-colonialism, which in modern history takes the shape of external debt.
When countries are forced to pay 40,50,60% of their government budgets just to pay the interests of their enormous debts, there is little room for actual prosperity left.
International debtors are the modern colonialists, sucking the marrow of countries; no armies are needed anymore to keep those countries subjugated. Debt is the modern instrument of enslavement, the international banks, corporations and hedge funds the modern colonial powers, and its enforcers are instruments like the Global Bank, the IMF, and the corrupt, collaborationist governments (and totalitarian regimes) of those countries, supported and propped up by these neo-colonials.
In reality, not much has changed since the fall of the great colonial empires. In paper, countries have gained their sovereignty, but in reality they are enslaved to the international credit system.
The only thing that has changed, is that now the very colonial powers of the past, are threatened to become debt colonies themselves. You see, global capitalism and credit system has no country, nationality, colour; it only recognises the colour of money, earned at all cost by the very few, on the expense of the vast, unsuspected and lulled masses.
Debt had always been a very efficient way of control, either on a personal, or state level. And while most of us are aware of the implementations of personal debt and the risks involved, the corridors of government debt are poorly lit, albeit this kind of debt is affecting all citizens of a country and in ways more profound and far reaching into the future than those of private debt.
Global capitalism was flourishing after WW2, and reached an apex somewhere in the 70's.
The lower classes in the mature capitalist countries had gained a respectable portion of the distributed wealth, rights and privileges inconceivable several decades before. The purchasing power of the average American for example, was very satisfactory, fully justifying the American dream. Similar phenomena were taking place all over the "developed" world.
Cover your a$$ much Larry? No mention of mass immigration? No mention of the elites' conscious, planned attack on homogeneous societies in Western Europe, the US, and now Japan?anne -> Kgaard... , Monday, April 11, 2016 at 07:44 AMThere is of course no reasonable answering to prejudice, since prejudice is always unreasonable, but should there be a question, when was the last time that, say, the United States or the territory that the US now covers was a homogeneous society?Kgaard -> anne... , Monday, April 11, 2016 at 11:21 AMBefore the US engulfed Spanish peoples? Before the US engulfed African peoples? Before the US engulfed Indian peoples? When did the Irish, just to think of a random nationality, ruin "our" homogeneity?
I could continue, but how much of a point is there in being reasonable?
The US was 88% European as of 1960. As of 1800 it was like 90% English. So yes, it was basically a homogeneous society prior to the immigration act of 1965. Today it is extremely hard for Europeans to get into the US -- but easier for non-Europeans. Now why would that be? Hmm ....Benedict@Large -> pgl... , Monday, April 11, 2016 at 08:56 AMAlso ... What is your definition of prejudice?
The only trade that is actually free is trade not covered by laws and/or treaties. All other trade is regulated trade.Ben Groves -> pgl... , Monday, April 11, 2016 at 10:10 AMHere's a good rule to follow. When someone calls something the exact opposite of what it is, in all probability they are trying to hustle your wallet.
Has anyone been trying to hustle the wallets of the people who became ISIS? Oh please. That's a stupid question to even ask.
So is free trade, as in regulated trade that is called the opposite of what it is, responsible for ISIS? Of course it is.
ISIS was invented by Wall Street who financed them. ISIS is a scam, just like Bin Laden's group, just like "COMMUNISM!!!!" to control people. To manipulate them.DrDick : , Monday, April 11, 2016 at 07:35 AMIt is like using the internet to think you are "edgy". Some dudes like psuedo-science scam artist Mike Adams are uncovering secrets to this witty viewer............then you wonder why society is degenerating. What should happen with Mike Adams is, he should be beaten up and castrated. My guess he would talk then. Boy would his idiot followers get a surprise and that surprise would have results other than "poor mikey, he was robbed".
This explains why guys like Trump get delegates. Not because he uses illegal immigrants in his old businesses, not because of some flat real wages going over 40 years, not because he is a conman marketer.........he makes them feel safe. That is purely it. I think its pathetic, but that is what happens in a emasculated world. Safety becomes absolute concern. "Trump makes me feel safe".
Guys, the bourgeois state is a protection racket and always has been. It makes you feel safe, secure and "feel like man". So we can enjoy every indulgent individual lust the world has to offer. Then comes in dialectics of what that protection racket should do.
To me, the bourgeois state is nothing more than a protection racket for the rich, something you should not forget.
I find it rather precious that Summers pretends not to understand why people hate TPP. I do not think there is any real widespread antipathy toward global integration, though it does pose some rather substantial systemic dangers, as we saw in the global financial collapse. What people, including me, oppose is how that integration is structured. These agreements are about is not "free trade", but removing all restrictions on global capital and that is a big problem.pgl -> DrDick ... , Monday, April 11, 2016 at 07:57 AMOK - some substance finally. TPP is not free trade. It is protectionism for the rich.DrDick -> pgl... , Monday, April 11, 2016 at 11:10 AMActually, this is my first actual response to the post itself, but you were too busy being and a*****e to notice. All or most modern "free trade" agreements are like that. What people oppose is agreements which impoverish them and enrich capital.Dan Kervick -> pgl... , Monday, April 11, 2016 at 03:33 PMThis has become a popular line, and it's not exactly false. But so what if it were a "free trade" agreement? More free trade arrangement are not always better trade arrangements. People have seen the results of the labor race to the bottom caused by earlier free trade agreements; and now they are guessing we're going to get the same kind of race to the bottom with TPP when we have to put all of our environmental laws and other domestic regulations into capitalist competition with backward countries.Denis Drew : , Monday, April 11, 2016 at 07:38 AM" The promotion of global integration can become a bottom-up rather than a top-down project. "Peter : , Monday, April 11, 2016 at 08:31 AM" ... whereby issues such as labor rights and environmental protection would be central ... "
+1
Now if we could just adopt that policy internally in the United States first we could then (and only then) support it externally across the world.
Easy approach: (FOR THE TEN MILLIONTH TIME!) progressive states (WA, OR, CA, NV, IL, NY, MD) could simply treat union busting the same way any OTHER major muscling or manipulation of the free market is treated: make it a felony. FYI (for those who are not aware) states can add to federal labor protections, just not subtract.
A completely renewed, re-constituted democracy would be born.
Biggest obstacle to this being done in my (crackpot?) view: human males. Being instinctive pack hunters, before they check out any idea they, first, check in with the pack (all those other boys who are also checking in with the pack) -- almost automatically infer impossibility to overcome what they see (correctly?) as wheels within wheels of inertia.
Self-fulfilling prophecy: nothing (not the most obvious, SHOULD BE easiest possible to get support for actions) ever gets done.
http://jaredbernsteinblog.com/new_path_forward/anne : , Monday, April 11, 2016 at 09:12 AMI'm not the only one seeking a new path forward on trade.
by Jared Bernstein
April 11th, 2016 at 9:20 am
"...
Here's Larry's view of the way forward:
"The promotion of global integration can become a bottom-up rather than a top-down project. The emphasis can shift from promoting integration to managing its consequences. This would mean a shift from international trade agreements to international harmonization agreements, whereby issues such as labor rights and environmental protection would be central, while issues related to empowering foreign producers would be secondary. It would also mean devoting as much political capital to the trillions of dollars that escape taxation or evade regulation through cross-border capital flows as we now devote to trade agreements. And it would mean an emphasis on the challenges of middle-class parents everywhere who doubt, but still hope desperately, that their kids can have better lives than they did.
Good points, all. "Bottom-up" means what I've been calling a more representative, inclusive process. But what's this about "international harmonization?""
It's a way of saying that we need to reduce the "frictions" and thus costs between trading partners at the level of pragmatic infrastructure, not corporate power. One way to think of this is TFAs, not FTAs. TFAs are trade facilitation agreements, which are more about integrating ports, rail, and paperwork than patents that protect big Pharma.
It's refreshing to see mainstreamers thinking creatively about the anger that's surfaced around globalization. Waiting for the anger to dissipate and then reverting back to the old trade regimes may be the preferred path for elites, but that path may well be blocked. We'd best clear a new, wider path, one that better accommodates folks from all walks of life, both here and abroad."
"What's Behind The Revolt Against Global Integration?" -- Washington Post editors title.Longtooth : , Monday, April 11, 2016 at 01:41 PM"Global trade should be remade from the bottom up" -- Lawrence Summers title.
I find the difference in titles important in showing just how slanted Washington Post editors are.
Summers: "Pie in the Sky" So trade negotiations would have to be lead by labor advocates and environmental groups -- sounds great to me, but I can't for the life of me figure out why the goods and service producers (i.e. capital owners) would have any incentive to promote trade under such a negotiated trade agreement... or that trade would actually occur. You'd have to eliminate private enterprise incentives to profit I think.. not something the U.S.'s "individualism" god can't tolerate.pgl -> Longtooth... , Monday, April 11, 2016 at 01:46 PMImagine a trade deal negotiated by the AFL-CIO. Labor wins a lot and capital owners lose a little. We can all then smile and say to the latter - go get your buddies in Congress more serious about the compensation principle. Turn the table!kthomas -> pgl... , Monday, April 11, 2016 at 03:01 PMNot being rude, but I fail to understand your response.Peter -> kthomas... , Monday, April 11, 2016 at 03:51 PMAFL-CIO? turn the table?
It's okay. He's drunk again.New Deal democrat : , Monday, April 11, 2016 at 03:07 PM"consensus in support of global economic integration as a force for peace and prosperity " -- "The Great Illusion" ( https://en.m.wikipedia.org/wiki/The_Great_Illusion )George H. Blackford :
That increased trade is a bulwark against war rears its ugly head again. The above book which so ironically delivered the message was published in 1910.Alas, the Kaiser, the Tsar, and the Emperor did not act in accord with its tenets. Either increased global trade is irrelevant to war and peace, or World War I didn't happen. Your pick which to believe.
Our problems began back in the 1970s when we abandoned the Bretton Woods international capital controls and then broke the unions, cut taxes on corporations and upper income groups, and deregulated the financial system. This eventually led a stagnation of wages in the US and an increase in the concentration of income at the top of the income distribution throughout the world: http://www.rwEconomics.com/Ch_1.htmThe export-led growth model that began in the 1990s seriously exacerbated this problem as it proved to be unsustainable: http://www.rwEconomics.com/htm/WDCh_2.htm
When combined with tax cuts and financial deregulation it led to increasing debt relative to income in the importing countries that caused the financial catastrophe we went through in 2008, the economic stagnation that followed, and the social unrest we see throughout the world today. This, in turn, created a situation in which the full utilization of our economic resources can only be maintained through an unsustainable increase in debt relative to income: http://www.rwEconomics.com/htm/WDCh3e.htm
This is what has to be overcome if we are to get out of the mess the world is in today, and it's not going to be overcome by pretending that it's just going to go away if people can just become educated about the benefits of trade. At least that's not the way it worked out in the 1930s: http://www.rwEconomics.com/LTLGAD.htm
|
|
|
economistsview.typepad.com
Larry Summers:Four common-sense ideas for economic growth : Let me begin with two facts that I think should be cause for concern. First, since the summer of 2009, the US economy has grown at about 2 percent. Two percent isn't a very good growth rate. Second, the 10-year interest rate at the end of trading today ... was just a bit below 1.8 percent. ...What's the way to think about these two facts together? I believe that we are dealing with a situation that goes beyond the usual cyclical issues associated with recession-and for many years the policy debate has been confounded by that. The Fed has been substantially too optimistic in its one-year-ahead forecast every year for the last six, and its forecasts are pretty close to the consensus forecasts. The prevailing expectation in markets has always been that significant tightening will take place in nine months. That's been true for the last six years. It has not happened yet.
If you accept all of this, what should be done? I would suggest four things at a minimum. First, there is an overwhelming case in the United States for expanded public infrastructure investment. ... It's hard to imagine a better time for expanded infrastructure investment, yet the rate of infrastructure investment is lower now than it's been anytime since 1947. ...
Second, we should increase support for private investment in infrastructure. ...
Third, we should grow our effective labor force. ...
Fourth, our financial system requires continuing attention. ...
I would say to you that whatever you care about, if all you care about is that we've got an excessive federal debt, the most important determinant of the debt-to-GDP ratio in 2030 is how rapidly the economy grows between now and then. If what you care about is American national security, the most important determinant of how much we are respected and how much influence we have in the world is how well our economy performs. If what you care about is inequality and poverty, the most important determinant of the employment prospects of the poor is how rapidly the economy is growing.
I would suggest to you that there is no more important question for the American prospect than accelerating the rate of economic growth. It seems to me, whether you're a demand sider or a supply sider, a Democrat or a Republican, there's a great deal of common sense that should lead you to support increased economic growth.
[There is quite a bit of discussion of each point in the full post.]
Posted by Mark Thoma on Wednesday, March 2, 2016 at 09:57 AM in Economics , Fiscal Policy , Monetary Policy | Permalink Comments (68)
|
|
|
economistsview.typepad.com
Part of an interview of Larry Summers at Equitable Growth :
... When I went to graduate school in the 1970s, the prevailing view among economists, captured by Art Okun's book "Equality Versus Efficiency: The Big Tradeoff," was that equality and efficiency were both desirable, but they were likely to trade off-that more progressive taxation would achieve more equality but would inevitably in some way distort economic choices and, so, reduce efficiency, for example.I believe there are still many areas in which one does have to trade off equality versus efficiency. But I also believe there are many areas in which it's possible to reform policy to promote both economic efficiency and equality. One such area is policy to mitigate secular stagnation by promoting demand at times when there is slack in the use of resources.
Recall that I defined secular stagnation as having at its essence an excess of savings over investment, desired saving over desired investment. There are many reasons for that. Some of them have to do, for example, with reduced investment demand because so much more capital can be purchased with fewer dollars. I think of the fact that my iPad has more computing power than a Cray supercomputer did when Bill Clinton came into office in 1993.
One aspect of that excess in saving over investments is that rising inequality has operated to reduce spending. We are fairly confident that what economists call the "marginal propensity to consume" of those with high incomes is less than the marginal propensity to consume of those with middle incomes.
And so the combination of rising inequality in the distribution of income across income levels and a shift in inequality toward the higher profit share slows economic growth. In normal times, such a change might be offset by easier monetary policy. But in the current environment, where interest rates are very close to the zero lower bound, the capacity for that kind of offset is greatly attenuated.
There's another aspect of the connection between secular stagnation and inequality that bears emphasis. Experience suggests that in an economy where there are more workers seeking jobs than there are jobs seeking workers, the power is on the employer side, and workers do much less well. A tight economy, where employers are seeking workers, shifts the balance of power toward workers and leads to higher pay and better benefits. That, in turn, leads to more spending being injected into the economy, which supports further economic growth.
And so, as Keynes recognized when he wrote to FDR in the late 1930s urging the importance of wage increases, measures that strengthen workers' capacity to earn income by increasing spending power can promote both equality and strengthen the economic performance of the country. ...
pgl :
Excellent interview with this as a key sentence:mulp -> pgl..."But I also believe there are many areas in which it's possible to reform policy to promote both economic efficiency and equality. One such area is policy to mitigate secular stagnation by promoting demand at times when there is slack in the use of resources."
Summers makes two arguments with respect to promoting aggregate demand:
(1) his case for more infrastructure investment; and
(2) his defense of the expansionary monetary measures taken by the FED from 2008 until recently.He does note that Obama started talking about "belt tightening" after Summers left the White House and to Summers regret.
Right, in a democracy, the elected leaders must view the voters as idiots and execute to the total opposite of the expressed policies of the candidates who won.pgl said in reply to mulp ...Or do you think the voters were calling for massive explosions of debt and massive increases in jobs forced by government policies to force exploding labor costs which would necessarily result in exploding consumer prices when they voted Democrats out and Republicans in?
Perhaps you think Bernie Sanders got far more leftist laws passed by being a radical leftist socialist in Congress able to lead a revolution in Congress to redistribute wealth?
The Republican Party is divided by Obama highly divisive politeral tactics which played Republicans against Republicans, doing a far better job dealing with Republicans than Clinton's "triangulation" which implemented massive austerity tempered by government dictates that were highly profitable to crony capitalists in the computer industry. Bush-Cheney served a different set of crony capitalists leading to an implosion in the tech sector dragging down pretty much everything good for the American people. Obama has since created incentives with rewards to both sets of crony capitalists, that has now imploded for the Bush-Cheney crony capitalists (fossil fuels) but still reward the Elon Musk, Bezos, google, hollywood, Ellison, Apple sector.
Neither Clinton nor Obama were allowed to help the bottom 50% of workers because voters demanded austerity by voting for Republican control of Congress in 1994, 1996, 1998, 2000, 2002, 2004, 2010, 2012, 2014, and if Sanders is the Democratic nominee in 2016, then Republican control of Congress in 2016, 2018, and probably 2020 and 2022. And only a Republican president will end the austerity, but it will lead to slower growth, high unemployment, likely severe recession, but wars. Just like the end of austerity of Bush-Cheney.
WTF this has to do with what Summers wrote??? Never mind. So much babbling, so little time.JohnH :JohnH said in reply to JohnH..."One aspect of that excess in saving over investments is that rising inequality has operated to reduce spending. We are fairly confident that what economists call the "marginal propensity to consume" of those with high incomes is less than the marginal propensity to consume of those with middle incomes.And so the combination of rising inequality in the distribution of income across income levels and a shift in inequality toward the higher profit share slows economic growth."
Hate to say this, but Summers is making a lot of sense.
The way to address the problem of slow economic growth is to tax the wealthy, who have a low propensity to consume, and use the funds for government programs (infrastructure, education, healthcare) and redistribution to the poor...exactly as I have been arguing.
pgl should take up his fight with Larry Summers, not me.BenIsNotYoda -> JohnH...But Summers is fairly confident...as pgl just can't accept that a) increasing inequality reduces consumption and economic growth and that b) addressing inequality by taxing high incomes and wealth would lead to increased consumption and economic growth if it was spent on social programs and redistribution to those with a high propensity to consume (the poor).
It appears the we now have two pgls here--one that support high top tax brackets and another who opposes taxing the wealthy.
Or maybe we just have a single, very confused dude!
pgl's solution is - give them a rate cut. always. grandmother is ill - give her a rate cutpgl said in reply to JohnH...You do know BINY is cheating on you. Good luck getting back with granny.BenIsNotYoda -> JohnH...he is not happy because his cheap stocks are getting cheaper.JohnH said in reply to BenIsNotYoda...I already called him on demanding QE4, which he advocated as soon as stocks went into correction territory back in August.lower middle class -> pgl...It was the same lousy economy. But as soon as stocks started to correct, and pgl's portfolio was getting hurt, he jumped right into action!
I'm trying to avoid being confused.JohnH said in reply to lower middle class...We hold the folowing as true, correct?
MPC is less than one.
"Income" refers to "disposable income"
As wealth and income rise, consumption also rises.
Falls in income do not lead to reductions in consumption because people reduce savings to stabilize consumption. (the poor get poorer by consuming wealth; wealth inequality accelerates?)
Increases in income do not lead to increases in consumption because people add to savings to stabilize consumption.
(high income people increase wealth faster the low income people while consumption increases; wealth inequality decelerates?)General propensity to consume depends on income. Wealthy people tend to save a good chunk of their incomes...and become wealthier. Most people save a very small part of their incomes (middle class) or nothing at all (poor). Obviously there are exceptions to this generalization, as pgl is quick to point out with his tearful evocations of the plight of the 'hand to mouth' rich. But the general pattern is as I have described.Peter K. :Marginal propensity to spend is a little more complicated, and a lot depends on whether the additional money is seen as a windfall or not. For people who do not generally save much, windfalls may be saved for a while or go to pay off debt, or be spend on durable goods or just spent.
"In normal times, such a change might be offset by easier monetary policy. But in the current environment, where interest rates are very close to the zero lower bound, the capacity for that kind of offset is greatly attenuated."Paine said in reply to Peter K....Larry Summers agrees with the obnoxious trolls like JohnH and BINY. Monetary policy doesn't help.
I agree with Dean Baker and Bernie Sanders. (This is not to say fiscal policy doesn't work better. Funny how the trolls always toss out red herrings.)
http://cepr.net/blogs/beat-the-press/paul-krugman-larry-summers-and-the-fed-s-unused-ammunition
Paul Krugman, Larry Summers, and the Fed's Unused Ammunition by Dean Baker
Paul Krugman and Larry Summers both have very good columns this morning noting the economy's continuing weakness and warning against excessive rate hikes by the Fed. While I fully agree with their assessment of the state of the economy and the dangers of Fed rate hikes, I think they are overly pessimistic about the Fed's scope for action if the economy weakens.
While the Fed did adopt unorthodox monetary policy in this recession in the form of quantitative easing, the buying of long-term debt, it has another tool at its disposal that it chose not to use. Specifically, instead of just targeting the overnight interest rate (now zero), the Fed could have targeted a longer term interest rate.
For example, it could set a target of 1.0 percent as the interest rate for the 5-year Treasury note, committing itself to buy more notes to push up the price, and push down the interest rate to keep it at 1.0 percent. It could even do the same with 10-year Treasury notes.
This is an idea that Joe Gagnon at the Peterson Institute for International Economics put forward at the depth of the recession, but for some reason there was little interest in policy circles. The only obvious risk of going the interest rate targeting route is that it could be inflationary if it led to too rapid an expansion, but excessively high inflation will not be our problem if the economy were to again weaken. Furthermore, if it turned out that targeting was prompting too much growth, the Fed could quickly reverse course and let the interest rate rise back to the market level.
Of course, it would be best if we could count on fiscal policy to play a role in getting us back to full employment (lowering supply through reduced workweeks and work years should also be on the agenda), but the Fed does have more ammunition buried away in the basement and we should be pressing them to use it if the need arises.
ExcellentJohnH said in reply to Peter K....Despite a finessed genuflex to inflation
"Larry Summers agrees with the obnoxious trolls like JohnH and BINY. Monetary policy doesn't help."JohnH said in reply to Peter K....Amazing, isn't it?
Agreed: "Of course, it would be best if we could count on fiscal policy to play a role in getting us back to full employment." And the best course is higher taxes on the wealthy, who have more than what they know with to do with.
Taxes on the wealthy directly tackles inequality, increased debt doesn't.
Amazing how unconventional monetary is always the go-to option. Pessimism about the effectiveness of the Fed's policy options is well warranted. You only need to look at the results of the last seven years.pgl said in reply to JohnH...So why not advocate unconventional fiscal policy...which at this point would include taxing the wealthy to fund stimulus? Why constantly flog the debt option, which does nothing to directly tackle inequality?
You need to shut up and go read that Ando-Modigliani paper on consumption. Once again you got everything exactly backwards. But then you are the dumbest troll ever.JohnH said in reply to BenIsNotYoda...pgl was against tax increases on the wealthy... before he was for tax increases on the wealthy...before he was against tax increases on the wealthy...PPaine :but he has always been for lots more debt...
" one persons rent may be another persons incentive "That relies on a muddled use of the term rent
Which by construction
Means
non supply regulating revenue or incomeBut still a point lies under that mud dimness of articulation
Separating rents from incentives ain't easy
But in the last analysis
Very often it's very doableTake my specialty
Ground rent
There are clever ways to tease out the rent
|
|
|
economistsview.typepad.com
RGC, December 02, 2015 at 06:09 AM
Larry Summers and the Subversion of EconomicsBy Charles Ferguson October 03, 2010
The Obama administration recently announced that Larry Summers is resigning as director of the National Economic Council and will return to Harvard early next year. His imminent departure raises several questions: Who will replace him? What will he do next? But more important, it's a chance to consider the hugely damaging conflicts of interest of the senior academic economists who move among universities, government, and banking.
Summers is unquestionably brilliant, as all who have dealt with him, including myself, quickly realize. And yet rarely has one individual embodied so much of what is wrong with economics, with academe, and indeed with the American economy. For the past two years, I have immersed myself in those worlds in order to make a film, Inside Job, that takes a sweeping look at the financial crisis. And I found Summers everywhere I turned.
Consider: As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.
After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department-where he championed the law that made Citigroup's creation legal-became both vice chairman of Citigroup and a powerful member of Harvard's governing board.
Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency. During this time, Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)
Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a "full-blown financial crisis" and a "catastrophic meltdown."
When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a "Luddite," dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.)
Soon after that, Summers lost his job as president of Harvard after suggesting that women might be innately inferior to men at scientific work. In another part of the same speech, he had used laissez-faire economic theory to argue that discrimination was unlikely to be a major cause of women's underrepresentation in either science or business. After all, he argued, if discrimination existed, then others, seeking a competitive advantage, would have access to a superior work force, causing those who discriminate to fail in the marketplace. It appeared that Summers had denied even the possibility of decades, indeed centuries, of racial, gender, and other discrimination in America and other societies. After the resulting outcry forced him to resign, Summers remained at Harvard as a faculty member, and he accelerated his financial-sector activities, receiving $135,000 for one speech at Goldman Sachs.
Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations-quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.
Summers is unique but not alone. By now we are all familiar with the role of lobbying and campaign contributions, and with the revolving door between industry and government. What few Americans realize is that the revolving door is now a three-way intersection. Summers's career is the result of an extraordinary and underappreciated scandal in American society: the convergence of academic economics, Wall Street, and political power.
Starting in the 1980s, and heavily influenced by laissez-faire economics, the United States began deregulating financial services. Shortly thereafter, America began to experience financial crises for the first time since the Great Depression. The first one arose from the savings-and-loan and junk-bond scandals of the 1980s; then came the dot-com bubble of the late 1990s, the Asian financial crisis; the collapse of Long Term Capital Management, in 1998; Enron; and then the housing bubble, which led to the global financial crisis. Yet through the entire period, the U.S. financial sector grew larger, more powerful, and enormously more profitable. By 2006, financial services accounted for 40 percent of total American corporate profits. In large part, this was because the financial sector was corrupting the political system. But it was also subverting economics.
Over the past 30 years, the economics profession-in economics departments, and in business, public policy, and law schools-has become so compromised by conflicts of interest that it now functions almost as a support group for financial services and other industries whose profits depend heavily on government policy. The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money.
Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. This is now, literally, a billion-dollar industry. The Law and Economics Consulting Group, started 22 years ago by professors at the University of California at Berkeley (David Teece in the business school, Thomas Jorde in the law school, and the economists Richard Gilbert and Gordon Rausser), is now a $300-million publicly held company. Others specializing in the sale (or rental) of academic expertise include Competition Policy (now Compass Lexecon), started by Richard Gilbert and Daniel Rubinfeld, both of whom served as chief economist of the Justice Department's Antitrust Division in the Clinton administration; the Analysis Group; and Charles River Associates.
In my film you will see many famous economists looking very uncomfortable when confronted with their financial-sector activities; others appear only on archival video, because they declined to be interviewed. You'll hear from:
- Martin Feldstein, a Harvard professor, a major architect of deregulation in the Reagan administration, president for 30 years of the National Bureau of Economic Research, and for 20 years on the boards of directors of both AIG, which paid him more than $6-million, and AIG Financial Products, whose derivatives deals destroyed the company. Feldstein has written several hundred papers, on many subjects; none of them address the dangers of unregulated financial derivatives or financial-industry compensation.
- Glenn Hubbard, chairman of the Council of Economic Advisers in the first George W. Bush administration, dean of Columbia Business School, adviser to many financial firms, on the board of Metropolitan Life ($250,000 per year), and formerly on the board of Capmark, a major commercial mortgage lender, from which he resigned shortly before its bankruptcy, in 2009. In 2004, Hubbard wrote a paper with William C. Dudley, then chief economist of Goldman Sachs, praising securitization and derivatives as improving the stability of both financial markets and the wider economy.
- Frederic Mishkin, a professor at the Columbia Business School, and a member of the Federal Reserve Board from 2006 to 2008. He was paid $124,000 by the Icelandic Chamber of Commerce to write a paper praising its regulatory and banking systems, two years before the Icelandic banks' Ponzi scheme collapsed, causing $100-billion in losses. His 2006 federal financial-disclosure form listed his net worth as $6-million to $17-million.
- Laura Tyson, a professor at Berkeley, director of the National Economic Council in the Clinton administration, and also on the Board of Directors of Morgan Stanley, which pays her $350,000 per year.
- Richard Portes, a professor at London Business School and founding director of the British Centre for Economic Policy Research, paid by the Icelandic Chamber of Commerce to write a report praising Iceland's financial system in 2007, only one year before it collapsed.
- And John Campbell, chairman of Harvard's economics department, who finds it very difficult to explain why conflicts of interest in economics should not concern us.
But could he be right? Are these professors simply being paid to say what they would otherwise say anyway? Unlikely. Mishkin and Portes showed no interest whatever in Iceland until they were paid to do so, and they got it totally wrong. Nor do all these professors seem to make policy statements contrary to the financial interests of their clients. Even more telling, they uniformly oppose disclosure of their financial relationships.
The universities avert their eyes and deliberately don't require faculty members either to disclose their conflicts of interest or to report their outside income. As you can imagine, when Larry Summers was president of Harvard, he didn't work too hard to change this.
Now, however, as the national recovery is faltering, Summers is being eased out while Harvard is welcoming him back. How will the academic world receive him? The simple answer: Better than he deserves.
While making my film, we wrote to the presidents and provosts of Harvard, Columbia, and other universities with detailed questions about their conflict-of-interest policies, requesting interviews about the subject. None of them replied, except to refer us to their Web sites.
Academe, heal thyself.
EMichael said in reply to RGC...Yeah, after an economist has had one job in the government; one job in the banking system; and one teaching job he should be required to stop working as an economist.RGC said in reply to EMichael...I think it is interesting that Summers led the financial deregulation efforts of the Clinton administration and then made a bundle on Wall Street. I think that should be taken into account when evaluating his discussions of economics.EMichael said in reply to RGC...Of course it should.At the same time this is not taking anything into account, this is about "subverting" economics.
Can you make a case that the only reason Summers made a "bundle" working on Wall Street is because of the financial deregulation efforts he made? Last time I looked he did not have a vote on the legislation.
RGC said in reply to EMichael...I think this is especially troubling for the economics profession:"Over the past 30 years, the economics profession-in economics departments, and in business, public policy, and law schools-has become so compromised by conflicts of interest that it now functions almost as a support group for financial services and other industries whose profits depend heavily on government policy. The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money."
EMichael said in reply to RGC...Cause no economists actually believed in any of the policies that caused all of those things nor did any economist fail to vote for the policies adopted.RGC said in reply to EMichael...Upton Sinclair:"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Tom aka Rusty said in reply to RGC...
As Hemingway and F. SCott Fitzgerald exchanged in their writings (the reputed face-to-face conversation may not have happened):The rich are different.
Yes, they have more money.
Combine elite and rich and you get a toxic combination.
|
|
|
Dec 5, 2010 | SFGate
There's a brief scene in "Inside Job," the locally produced documentary on the Great Financial Meltdown, in which a colleague of the head of the Commodity Futures Trading Commission in 1997 describes how "blood drained from her face" after receiving a phoned-in tongue-lashing from deputy Treasury Secretary Larry Summers.
The target of Summers' wrath was Brooksley Born, a San Francisco native, who graduated from Abraham Lincoln High School and became the first female president of the Stanford Law Review and a recognized legal expert in the area of complex financial instruments.
Her crime: Born had the temerity to push for regulation of the increasingly wild trading in derivatives, which, as we learned a decade later, helped bring the U.S. economy, and much of the world's, to its knees. Summers, with 13 bankers in his office, told Born to get off it "in a very grueling fashion," said the colleague.
The story is told in much more detail in "All the Devils are Here," the latest, but eminently worthwhile, book on the roots of the crisis, by Bethany McLean best known as a co-author of the book on the collapse of Enron, "The Smartest Guys in the Room," and New York Times business columnist Joe Nocera.
It makes for dispiriting, even appalling, reading.
Responding to growing evidence of manipulation and fraud in unregulated derivatives trading - "the hippopotamus under the rug," as Born and others referred to it - Born suggested the commission should perhaps be given some sort of oversight. She had a 33-page policy paper drawn up, full of questions and suggestions, like, for example, whether establishing a public exchange for derivatives might not be a bad idea.
But this was the age of Ayn Rand acolyte Federal Reserve Board chairman Alan Greenspan, and a Democratic administration that unquestioningly embraced his markets-can-do-no-wrong ideology. Responding to the policy paper, Summers, "screaming at her," according to the book, told Born the bankers sitting in his office "threatened to move their derivatives business to London," if she didn't stop.
Other members of President Bill Clinton's inner circle were equally unhappy. Like Summers' boss, Treasury Secretary Robert Rubin, who had previously expressed qualms about derivatives, but was now all about toeing the party line.
At an April 1998 meeting of the President's Working Group to discuss the paper, "his reaction to Born's arguments was almost visceral," the authors write. "He bullied Born in a way that seemed out of character to anyone used to watching him manage a meeting," according to the book.
Born went ahead and published the internal paper, which "incensed" Rubin and other members of the working group who "immediately sent a letter to Congress requesting that it block the CFTC's effort to solicit comment."
It didn't stop there. "Rumors were spread that Born was just an impossible woman - too shrill and strident to work with." The book describes Born's appearances at congressional hearings on the policy paper, as "an extraordinary spectacle: in one hearing after another, an array of Clinton regulators lined up to publicly denounce the action of another Clinton regulator."
Born's ideas got nowhere. Rubin, according to the book, never spoke to her again. After leaving the administration, he joined Citigroup as "senior counselor," a sinecure that paid him approximately $15 million a year.
In the meantime, Long Term Capital Management had collapsed, sending shock waves and panic around the world. "Even after LTCM, she remained the only administration official to talk about the need for government oversight over the derivatives business," the authors note. A few weeks later, Born left the administration, declining Clinton's invitation to a second term.
After her experience with government service, Born, now 70, returned to private practice and teaching, before retiring professionally. A co-founder of the National Women's Law Center, she is a member of the bipartisan Financial Crisis Inquiry Commission, which is due to report on its findings next month.
In 2009, Born was awarded the John F. Kennedy Profiles in Courage Award in recognition of the "political courage she demonstrated in sounding early warnings about conditions that contributed to the current global financial crisis."
One might say Born also deserves a congressional medal, and an apology.
|
|
|
May 27, 2015 | FT Alphaville
The FT's Richard Waters reports that Larry Summers, former US treasury secretary and secular stagnation theorist, is to form part of the advisory board at Xapo, a Silicon Valley Bitcoin start-up specialising in deep cold storage of bitcoins in Swiss vaults and the issuance of bitcoin debit cards.Worth noting in this context, of course, is that Larry Summers is also the man arguing that bubbles are a bit of an inevitability in a secular stagnated world. Or as he explained in the Financial Times back in December 2014:
Some have suggested that a belief in secular stagnation implies the desirability of bubbles to support demand. This idea confuses prediction with recommendation. It is, of course, better to support demand by supporting productive investment or highly valued consumption than by artificially inflating bubbles. On the other hand, it is only rational to recognise that low interest rates raise asset values and drive investors to take greater risks, making bubbles more likely. So the risk of financial instability provides yet another reason why pre-empting structural stagnation is so profoundly important.
We'll give Summers the benefit of the doubt and assume the logic is that if you can't fight new fangled bubbles you might as well sit on the advisory boards of the companies pumping them so as to advise and steer them? Who knows.
What we do know is that there are clear synergies between bitcoin and the secular stagnation thesis.
For example, Bitcoin - in its most idealised form - could be judged a citizens' attempt to organise something akin to a universal basic income. Alternatively, it could be judged a giant Keynesian coal-mine thought experiment to mobilise the unemployed. Whilst neither of these is economically optimal for mobilising capital to invest in critical infrastructure, renewables or technologies, it's certainly better than doing nothing. Or so the Keynesian doctrine goes.
By any means, following Summers' own thesis, the sooner we can deploy capital properly into social infrastructure development the better for all of us.
Yet bitcoin as it stands is a system that pulls critical resources and capital away from producers and infrastructure developers and passes them over to predators or undeserving spendthrifts, often in a way that allows them to get something for nothing or which facilitates value hoarding.
Perhaps the thinking is that we need real economists to teach the bitcoin faithful the importance of investing rather than hoarding money?
But if that's the case it could be a steep uphill challenge.
Unlike the dollar money system, which draws value from the bonds it creates between parties, Bitcoin is designed to count as an asset in its own right. In that sense, bitcoin represents a particularly unsociable type of money system. It is no-one's liability. And that means no-one guarantees a bitcoin's minimum worth.
This in turn means if you hoard bitcoin, that capital sits idle in your account, undeployed, unutilised.
To the contrary, dollar savings are always someone else's liabilities, meaning capital is always being deployed in the system in a way that keeps the economy growing so that by the time you wish to redeem your savings, there's more than enough for everyone.
... ... ...
We're not even going to note the hypocrisy/irony/double standards of this policy as it applies to the Bitcoin scene. This speaks for itself. All we will say is that the above comes just as the standing system is being pressured to rely less on cross-subsidisation and to become more transparent about the costs in the business.
3) Perhaps Larry Summers is on hand to guide Xapo on its final transition to conventional financial intermediary status: the mastering of credit provision?
Gordon Moat
I suppose there is a bit of name recognition to build respectability and confidence in Xapo. However, the idea reminds me more of when Gary Coleman did those Cash-4-Gold commercials.
|
|
|
May 4, 2015 | Economist's View
An excerpt from Larry Summers' prepared remarks delivered at the Brookings Institute on the 40th anniversary of Okun's "Equality and Efficiency: The Big Tradeoff":
Okun's Equality and Efficiency: ... For many years now, it has been the case that the income distribution has been growing much more unequal. ... Certainly because of what has happened in the economy, I would in thinking about tax policy put much more emphasis on distributional issues relative to efficiency issues than I would have during much of my career. Similarly, I believe that concern with issues relating to the cost of capital and the adverse effects of taxes in increasing it has been very legitimate at points in the past. At present, when zero interest rates make capital costs as low as they have ever been but corporate profits are at record levels, there needs to be much less concern with capital costs and more concern with the distributional aspects of capital taxation.The same basic idea that rising inequality tips the balance between fairness and efficiency applies in other areas of policy as well. ... I would judge that he benefit cost ratio seems tilted towards minimum wage increases and towards relaxation of the rules regarding the rights of private sector workers to bargain with management.Another area where conditions have changed over the years is with respect to policy directed at the financial sector and corporate governance. The financial sector has shown itself to be less of a source of diversification and stability and more of a source of instability than most judged a generation ago. At the same time compensation levels in the sector, and in firms engaged with the sector has gone up rapidly. The simultaneous emergence of high profits and low interest rates raises the question of whether monopoly power is on the increase. So the question of regulatory actions looms much larger than it has for many years. ...
400 ppm -> pgl..."
Treasury Department was pushing some of the deregulations that fueled this.
"
~~pgl~Did Tip O'Neil once quip, "all scams are local, are local to Capitol Hill"? Who knows? One thing for sure : He left us with a memorable hint.
"
more emphasis on distributional issues relative to efficiency issues
"
~~Larry Summers~Can you see the *hidden persuader*? The hideous persuader? Presenting regressive taxation as providing less of equality but more of efficiency, an efficient form of preventing inflation? From my prospective, regressive is much more inefficient. Do you see how it could work?
When taxation code is modified to allow a *living standard-deduction* for the impoverished thus poor will have more money in pocket to pay the rent. Landlord will quickly detect this thus raise the rent some, but the residual pocket change can *stimulate* inventory draw thus greater production utilization thus more rehiring thus more *efficiency for America the Beautiful*, efficiency which is vital to our defense initiative.
Did Summers personally code that speech? Doesn't matter. What matters is the alertness of the reader and his logical interpretation of
"what needs to be done"
~~Garrison Kieler~Gibbon -> 400 ppm...
One thing I remember my Grandmother a renter on a fixed income saying. Every time there was a social security cost of lining increase the landlord would raise the rent by the same amount. Which instilled in me the idea that any benefits you want hand over to low income people need to somehow be protected from the landlord, etc etc etc.
Better to tax wealth and property and use the money to pay for the poor folks kids to go to school, then to give poor folks an income tax break. Second best is to tax the poor and use it to pay for stuff they use.
Social Security is exactly the latter. The government takes some $$$ which in reality comes out of the landlords pocket. And in return promises some income during retirement. probably all of Social Security really comes out of the landlords pocket.
RGC :
Short version of Larry's talk: "I wasn't wrong back then when I made those proposals that turned out so badly. Conditions changed and my proposals had nothing to do with it."
RGC -> RGC ...
Larry again: "Oh, and all that money the banksters paid me and Bob Rubin and Rahm Emanuel and Ben Bernanke..... that didn't have anything to do with it either. We all give terrific advice."
pgl:
The Congressional Research Service documents one source of inequality - multinationals doing base erosion:
http://op.bna.com/der.nsf/id/klan-9w7qwb/$File/CRS%20BEPS.pdf
"of the $1.2 trillion in overseas profits American companies reported earning in 2012, $600 billion was attributed to seven tax havens: Bermuda, Ireland, Luxembourg, the Netherlands, Singapore,
Switzerland, and the U.K. Caribbean Islands. The Netherlands was the most popular location to report profits, accounting for 14.1% of all overseas earnings of American companies. Further analysis reveals that the share of profits reported is significantly disproportional to the amount of hiring and investment made by American companies in these countries."Inequality yes but Greg Mankiw with his Efficiency sign endorses this reduction in the effective tax rate on corporate profits.
pgl:
Krugman cites some important work from his new colleagues at CUNY:
Barkley Rosser:
I am not sure if it is funny or sad that "Okun's Law" was taken so seriously for so long, entering Principles textbooks as a standard truism barely questioned. All along simple correlations between Gini coefficients and either growth rates or income levels at the global level never supported it, although usually such simple regressions were insignificant. But the signs were almost always the wrong way.
A later argument developed, although it did not show up in the textbooks much, that the relationship was more likely to be some sort of inverted U-shape. So, we knew that super equality as in Maoist China or other parts of the Communist world were not associated with rapid growth or very high income after awhile. But, at the same time, until very recently, the very unequal countries in Latin America and parts of Africa were also not impressive performeers on either growth or income levels. It was those more in the middle on inequality that did the best, with the source of inequality also important, "earned" being good, but inherited or due to corruption not so good.
Of course, as time went on, even that story seemed skewed as those simple correlations that teneded to show growth equality related kept popping up, and we saw fairly egalitarian East Asis top the growth charts, while super unequal Latin America continued to stagnate (yes, it has done better more recently, but then it has been almost the only part of the world with increasing equality as well).
So, to get to the bottom line, it simply looks like "Okun's Law" was simply dead wrong. It was an outLaw, not a Law. Basically a giant mistake that got spread to justify policies increasikng inequality without a shred of foundation. We forgive you, Okun, you were mostly a good economist and nice guy, but this was a big f-up from start to finish.
Sandwichman -> Barkley Rosser...
"I am not sure if it is funny or sad that "Okun's Law" was taken so seriously for so long..."
Sad. Pathetic, really.
Sandwichman -> Barkley Rosser...
Except, to be precise, "Okun's Law" is about the relationship between rates of growth and rates of unemployment. It had a certain amount of empirical persuasiveness for a while, just like the Cobb-Douglas production function or the Phillips Curve. But these empirical rules of thumb are particularly vulnerable to changes in the underlying structures.
anne -> Sandwichman...
"Okun's Law" is about the relationship between rates of growth and rates of unemployment....
[ I was waiting for an expression of the relationship or "law." What does 38 years of 9.7% growth yearly mean in such theoretical terms then? Where and when, China 1977-2014? ]
Barkley Rosser -> anne...
Thanks anne, I stand corrected. Indeed, Okun's Law was about this relationship between rates of growth and changes in the unemployment rate, not all that far off.
However, it was indeed Okun who introduced, at least very publicly to the point of getting textbook credit for it (and with Summers still identifying it with him), the supposed equality-efficiency tradeoff. He did it big time in his 1975 Brookings book, Equality and Efficiency: The Big Tradeoff, which contained his Goodkin lectures from the year before at Harvard.
This was what was dead wrong from Day One, but Okun's Law is not so far off and indeed higher growth tends to reduce the unemployment rate, even if Okun's old rule of thumb numbers are not precisely correct.
anne -> Barkley Rosser...
However, it was indeed Okun who introduced, at least very publicly to the point of getting textbook credit for it (and with Summers still identifying it with him), the supposed equality-efficiency tradeoff....
[ Agreed. ]
anne -> Sandwichman...
https://twitter.com/billmon1/status/595289719082061824
Would it kill Krugman (or other "saltwater" economists) to acknowledge the virtues of old-school targeted job creation programs?
paine -> Barkley Rosser...
Bark
The E-E trade off is not Os law
anne -> paine...
The Equality-Efficiency trade off is not Okun's Law
[ Agreed. ]
pgl -> paine...
There are several versions of the Euler equation so I guess Art Okun can get credit for many things. But yea - when I say Okun's law, it is a proxy for the output gap by something akin to a(U - U*) whatever U* means.
anne -> Barkley Rosser...
A later argument developed, although it did not show up in the textbooks much, that the relationship was more likely to be some sort of inverted U-shape. So, we knew that super equality as in Maoist China or other parts of the Communist world were not associated with rapid growth or very high income after awhile. But, at the same time, until very recently, the very unequal countries in Latin America and parts of Africa were also not impressive performers on either growth or income levels. It was those more in the middle on inequality that did the best, with the source of inequality also important, "earned" being good, but inherited or due to corruption not so good....
[ Worth developing. ]
anne:
http://www.federalreserve.gov/newsevents/speech/bernanke20120326a.htm
March 26, 2012
Recent Developments in the Labor Market
By Ben BernankeThe Change in Unemployment and Economic Growth: A Puzzle?
About 50 years ago, the economist and presidential adviser Arthur Okun identified a rule of thumb that has come to be known as Okun's law. That rule of thumb describes the observed relationship between changes in the unemployment rate and the growth rate of real gross domestic product (GDP). Okun noted that, because of ongoing increases in the size of the labor force and in the level of productivity, real GDP growth close to the rate of growth of its potential is normally required just to hold the unemployment rate steady. To reduce the unemployment rate, therefore, the economy must grow at a pace above its potential. More specifically, according to currently accepted versions of Okun's law, to achieve a 1 percentage point decline in the unemployment rate in the course of a year, real GDP must grow approximately 2 percentage points faster than the rate of growth of potential GDP over that period. So, for illustration, if the potential rate of GDP growth is 2 percent, Okun's law says that GDP must grow at about a 4 percent rate for one year to achieve a 1 percentage point reduction in the rate of unemployment....
Sandwichman:
Basically, the supposed efficiency/equality tradeoff commits a same yardstick fallacy. What is judge efficient depends on what you select as your numeraire. Select a different numeraire and what was efficient becomes inefficient.
The Kaldor-Hicks compensation criterion commits the same fundamental cognitive error. "Unacceptable nonsense" in the words of I.M.D. Little. I'm sure Okun was a nice man and very smart. It was very nice of Paul Samuelson to say in a eulogy that he never said a stupid thing. But he did. What is more stupid, though, is the almost unquestioning acceptance of that stupid thing by the economic mainstream. No, maybe that was not so stupid after all, just self serving.
anne -> Sandwichman...
http://en.wikipedia.org/wiki/Num%C3%A9raire
In mathematical economics, the numéraire or numeraire is a tradeable economic entity in terms of whose price the relative prices of all other tradeables are expressed.
anne -> Sandwichman...
Fine, I am suitably impressed but now set down the criticism in terms a fool like me can actually understand rather than just be impressed by.
Sandwichman -> anne...
David Ellerman, "On a fallacy in the Kaldor–Hicks efficiency–equity analysis"
http://www.academia.edu/6999811/On_a_fallacy_in_the_Kaldor_Hicks_efficiency_equity_analysis
Abstract: This paper shows that implicit assumptions about the numeraire good in the Kaldor–Hicks efficiency–equity analysis involve a ''same-yardstick'' fallacy (a fallacy pointed out by Paul Samuelson in another context). These results have negative implications for cost-benefit analysis, the wealth-maximization approach to law and economics, and other parts of applied welfare economics-as well as for the whole vision of economics based on the ''production and distribution of social wealth''.
I suspect that there is similarity between this fallacy and the Kahneman-Tversky framing bias I mentioned in an earlier thread -- and thus also with the cognitive challenge posed in the stock-flow systems dynamics question (Sterman and Booth-Sweeney).
|
|
|
Apr 02, 2015 | Jesse's Café Américain
"Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want.
But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People - powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize other insiders."
Elizabeth Warren, A Fighting Chance
|
|
|
April 17, 2014 | NYTimes.com
Simon Johnson, former chief economist of the International Monetary Fund, is the Ronald A. Kurtz professor of entrepreneurship at the M.I.T. Sloan School of Management and co-author of "White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You."
The global financial crisis that broke out following the collapse of Lehman Brothers in September 2008 was a big shock. This is literally true in terms of the impact on investors and market prices; a wide range of financial variables moved rapidly in unexpected and worrying directions. But what happened was also a shock to the realm of ideas about finance.
Before September 2008 - or at least before 2007, when some of the underlying problems first became more clearly manifest - the prevailing consensus among officials and specialists was that financial innovation was a good thing. In isolated instances, a particular new product might not work out as planned, as happens, for example, with medical innovation. But over all, the consensus went, financial innovation led by the private sector was making the system safer and more efficient.This view was wrong.
In its day, this line of thinking justified the legal and regulatory changes that allowed some banks to become very large and to build up a much more complex range of activities in the 1990s and early 2000s, including through various kinds of opaque derivatives transactions.
In retrospect, much of the financial innovation in the previous decades built up risk for the financial system in ways that were not properly understood by regulators or, arguably, by management at some of the largest banks.
Of course, some bankers knew exactly what they were doing as their companies increased their debt relative to their equity. On average, large complex global banks had about 2 percent equity and 98 percent debt on the liability side of the balance sheet before the crisis, meaning they were leveraged 50:1 (the ratio of total assets to equity).
The good news is that the official consensus was shattered in 2008, and is not coming back. Systemic risk slapped everyone in the face with an undeniable wake-up call.
However, the process of reforming the financial system is still at an early stage. The Dodd-Frank financial reforms of 2010 represent a useful start - including the Volcker Rule's restrictions on excessive risk-taking - and the recently adopted Basel III framework for capital regulation nudges equity requirements higher.
But the world's largest banks will, by one informed estimate, end up - as things currently stand - with about 3 percent equity and 97 percent debt as the average structure of their balance sheet liabilities. In the United States, if the latest leverage rule is implemented and enforced properly, this will become 5 percent equity and 95 percent debt for the biggest eight banks by 2018. While 20:1 is better than 50:1, this is still not enough equity to assure a reasonable degree of financial stability in the foreseeable future.
The argument about finance has now shifted and is much more about whether capital requirements for the largest banks should be increased further. Those opposed to such a move offer three reasons why big banks should not be required to fund themselves with much more equity.
First, some people contend that the crisis of 2008 was a rare accident and Dodd-Frank fixed whatever problems existed. This is completely unconvincing - particularly because many of the same people have spent much of the last four years opposing and delaying financial reform.
Most importantly, it ignores the ways in which incentives and rules have changed since the 1980s. As James Kwak and I asserted in "13 Bankers," the structure of the financial system is quite different now from what it was in 1980. In particular, the largest banks have become much bigger and more able to take on (and mismanage) much more risk.
The second argument is that the costs of the crisis were not huge, so there is no reason to fear a repeat. This is the view sometimes associated with former Treasury Secretary Timothy Geithner. (Mr. Geithner has a book coming out soon, and it will be interesting to see his current position on this point).
But the impact of any financial crisis is not measured primarily in terms of whether the Treasury made or lost money on specific investments. The criteria instead should be what happened to output and jobs, as well as what the impact was on the country's fiscal accounts. How much more public debt do we have now relative to what we had before - and what kind of lasting negative effects will that have?
Mr. Kwak and I took this on in "White House Burning," putting the recent surge in public debt in the longer-run context of American fiscal policy. No matter how you look at it, the financial crisis was a complete disaster for the real economy and, given the way fiscal politics work in the modern United States, for the budget and for investments in any kind of physical infrastructure and education.
The third counterargument is that large complex financial institutions are needed because they provide some sort of magic for the broader economy. This still seems to be the view of some people at the Federal Reserve Bank of New York, which recently published a set of research papers on the topic.
But the benefits they find are small relative to the potential costs. Anat Admati and Martin Hellwig's "The Bankers' New Clothes" makes the vulnerability of modern banking abundantly clear.
A recent report from the International Monetary Fund finds that the United States and other governments are providing large implicit subsidies to these big banks: The prospect of potential government support lowers their funding costs by about 100 basis points (one percentage point).
Many people are involved in the official sector's rethinking of finance. This is the lasting contribution from books such as Sheila Bair's "Bull by the Horns," Neil Barofsky's "Bailout" and Jeff Connaughton's "The Payoff." In government circles, key decision makers were swayed by officials including Thomas Hoenig and Jeremiah Norton (both of the Federal Deposit Insurance Corporation) and Sarah Bloom Raskin (then on the Board of Governors of the Federal Reserve System; now at the Treasury Department). As chairman of the Commodity Futures Trading Commission, Gary Gensler had an immensely positive impact, both directly on the regulation of derivatives and also more broadly.
The Democratic senators Sherrod Brown of Ohio, Jeff Merkley of Oregon and Carl Levin of Michigan and Ted Kaufman of Delaware (who has since left the Senate), along with David Vitter, Republican of Louisiana, played key roles in shifting opinion. Elizabeth Warren's work, both before and after her election to the Senate from Massachusetts, has also had great influence.
Of all the civil society organizations seeking to promote financial stability, Dennis Kelleher's Better Markets stands out for its major impact through a relentless surge of arguments, comment letters and research. Its report on the cost of the crisis made clear beyond any reasonable doubt that the crisis had profound negative consequences for millions of people.
Many other officials have also shifted their views in important ways. We are not going back to the old ways of thinking about finance, and allowing for changes in these theories is an essential part of any modern economy. Finance needs to be regulated effectively, and large banks should fund themselves with much more equity than is currently the case.
Selected Skeptical Comments
toom, germany 19 June 2014
The basic question is whether financial trickery and juggling can produce wealth? Certainly these tricks produce wealth for the bankers on Wall St. But how about the rest of us?
The answer is "maybe, sometimes". The pension funds profited from 1980 to 2007 and then again after 2010, with help from the Fed. However the wealth increase from 1980 to 2000 was mainly from the export of manufacturing jobs from the US to China. That will never occur again.
So we are stuck with 1% return on investment, unless trickery or some new invention (a new kind of cell phone, or more broadband or alternate energy?) occurs.
jack waymire, sacramento, ca 22 April 2014
Sure 20:1 leverage on balance sheets is better than 50:1 leverage, but the intellectuals are missing the point. Who wins when banks are excessively leveraged? Shareholders? Clients? The U.S. economy? I submit the primary beneficiaries are the executives who run the banks. They make decisions with impunity. Increased leverage increases profits which increase executive bonuses.
Shareholders may benefit if company stocks rise in value. Highly leveraged balance sheets create a huge risk for all Americans - except the executives who made the decisions to leverage the balance sheets and get into businesses they barely understand.
Justin, Ohio 18 April 2014
You nail it perfectly. But we need to ask broader question: Is American Dream a myth?
It seems to me American Dream is clearly a form of both myth and illusion and propaganda used by the upper classes to keep the lower classes or the 99% in their place.I'm shocked!, America 17 April 2014
"The second argument is that the costs of the crisis were not huge, so there is no reason to fear a repeat."
Let's find the person who said that and feed him to the tens of millions of unemployed people.
Jeff Atkinson, Gainesville, GA 17 April 2014
It's pretty simple. TBTF bank managers want to be regulated and paid like hedge fund managers but with a huge edge in the form of implied government assurances for their suppliers of capital. Such assurance can be purchased cheaply with political contributions and post government jobs for regulators.
Robert Baesemann, Los Angeles CA 17 April 2014
Bravo. I was prepared to read a rehash of the Collected Scientific Papers of Jamie Dimon," but this piece is very informative and helpful. The most critical issue on my horizon is the stability of the financial system. What I ask is whether or not the system is as stable as it was in 1998, or is it still teetering the way it was in 2007. In 2008, we observed the failure of Lehman, the rescue of several others (Merrill merged into BofA), and the failure and rescue of two money market funds that failed to make the buck. This seems to have been a global run on the banks which was cut off, but narrowly cut off. If there is a next time, the 2008 experience will only cause the fingers on the triggers to be quicker than they were in 2008. This seems to mean that we are not far removed from the lethally dangerous circumstances of 2008.
Thank you for pointing out the need for better financial regulation. As I recall, under Glass-Steagall commercial banking and investment banking were separate (no Merrill-BofA unions) and commercial bank reserve requirements were set by the FED at 20% to 25% or 4 to 1 or 5 to 1. In those days, commercial banks could not make profits like investment banks, but they could not drage the entire world into Depression. Investment banks were left to deal with people silly enough to gamble on Wall Street rather than Las Vegas. Oh for those halcyon days.
Murray Kenney, Ross, CA 17 April 2014
More equity = less lending. Less lending = less capital, particularly for small and medium sized businesses and for consumers with weak credit histories. Less capital for small and medium sized businesses and moderate income consumers = less economic growth.
That's why European Governments have resisted higher capital levels. They'd rather backstop their banks and treat bank debt as an off balance sheet liability of their governments than acknowledge the problem created by slow economic growth, excess supply, weak demand and low interest rates.
Michael F. Rhodes, Vancouver, Canada 17 April 2014
That is bunk. Financial alchemy has been tried in history (4th century Rome, post-war Germany and Basel risk weights). They don't work. Value creation, not finance creation, drives durable economics. Stop the apologetics. Tell people to work harder.
Manuel Morales, San Juan, Puerto Rico 17 April 2014
Financial illusions may be stronger than they may have ever been.
Professor Johnson writes that the financial crisis was a complete disaster to the real economy. Dennis Kelleher estimates a $12.8 trillion debacle in that same real economy with a negative impact that will be felt for years, if not decades, to come.
The doyens and shamans of 'high finance' have only received timid penalties for the global destruction they triggered while companies in the tangible economy, causing much less damage, are oftentimes chastised much more strongly and receive relatively far stricter punishments.
Regrettably the all-inclusive list of wizards of Wall Street are doing fine, are much alive and vigorously kicking while working compulsively to find 'innovative' and ingenious maneuvers to outfox regulations while moving higher on the 1% list.
The distressed state of affairs caused by the Great Recession may prove not to be the Main Event. Only time will tell.
Bob Feinberg, DC area 18 April 2014
At a recent event in Washington, Mr. Kelleher drastically raised his estimate of the embedded cost of the ongoing crisis due to overvaluation of swap positions of the TBTF banks. No one seems to know what this exposure is, and the prevailing view is that this is minimal because the positions net out.
The people who say this are the same ones who minimized the practices that gave rise to the 2008 episode of the ongoing, permanent crisis. The positions don't necessarily net out unless they are opposing sides of the same trade.
To estimate this exposure at several times the GDP of the US is probably conservative, but no one seems to know. Meanwhile the efforts of the so-called regulators are directed at preventing a so-called "default event" that would require these losses to be recognized.
BB, Orlando 17 April 2014
An excellent article. I completely agree that "Finance needs to regulated effectively and large banks should fund themselves with more equity." However, this is not going to happen until there are major political changes in the United States. The country is not a democracy, but a plutocracy. Wealthy people have benefited immensely by the status quo whereas the middle and lower classes have been devastated. This is because the government and the supreme court are controlled by big business. All elected government officials get in office with big business funding and they will act accordingly. The supreme court has exacerbated this situation by ruling that there should be no limits on campaign contributions. Campaign contributions need to be severely limited so educated, capable people from the middle and lower classes have an equal chance to play a significant role in government. How about a physicist as president(eg Ms Merkel)!.
Only a wealthy person such as Timothy Geithner would have the opinion that the costs of the financial crisis were not huge. He would feel differently if he was standing in the unemployment lines. The current plutocracy wants big profits which mean shipping jobs overseas, lower wages and more unemployment.
Dryly 41, 17 April 2014
Every thing that Professor Johnson says is spot on. Indeed, he is the only major economics professor that has identifies the source of the September 15, 2008 collapse of our financial system for the first time since October of 1929.
He is also the only one who has pointed out that Dodd-Frank didn't fix the problems created by the reversion to the Laissez Faire of Harding, Coolidge, Hoover and Mellon from the "strict supervision" of FDR.
We will once again return to "strict supervision" of finance. The only question is whether we do it before or after the next financial collapse. A wise and prudent nation would do it before but there is insufficient wisdom and prudence at this unfortunate time in American history.
Bob Feinberg, DC area 18 April 2014
Prof. Admati is another relentless leader of this debate. While the calls for stricter regulation of banks have grown louder, the opposition by the industry has hardened, and industry executives and lawyers are still running policy. This industry is, in effect, regulated by its own lawyers. To have meaningful regulation of this dangerous industry would required Transparency, Independence, and Accountability, all of which have been lacking throughout the decades of the ongoing, permanent crisis, and they still are.
Ms B, Buffalo 17 April 2014
Back in the 80's a local savings bank went "big time" around here with fancy deals in Florida and Texas. The deals were put together with the bank as lender with a piece of the ownership/equity as well. They bankers thought it was the cats meow, the cutting edge of sophisticated banking. The deals all tanked and the bank went down. Same nonsense now with different players and an even better means of obfuscation and rent seeking. Today, unfortunately the banksters are above the law and burning town the country has no consequences.
Larry L. Dallas, TX 18 April 2014
Here's a fact about the Oil Boom and the S&L Mess that happened in its midst that few people know:
EVERY SINGLE STATE BANK IN THE STATE OF TEXAS WENT UNDER IN THE AFTERMATH.
The 2008 Crisis was that smaller crisis writ large on the national and global scale. The fact that two idiots from Texas (Armey and Gramm) had a hand in the elimination of the Depression-era financial regulations that eventually led to 2008 just show that idiots are not capable of learning from prior experience.
Mark T, is a trusted commenter New York NY 17 April 2014
This sounds like a valedictory and indeed I hope it is the last post on this topic on which so much has been said (and repeated, and repeated).
One official unwisely unmentioned is Daniel Tarullo who is at the forefront of the push for greater macroprudential regulation. Among authors who should have been mentioned are Viral Acharya who has published a lot on systemic risk, Raghuram Rajan's Fault Lines is essential to understand the role of debt in the political economy of the post-gold-standard Western economies; and no analysis of the crisis is worthy of mention unless it faces up to the role that bank capital regulations played in shaping the portfolios of banks, which one can explore in Friedman's Engineering the Financial Crisis.
The post manages to discuss the financial crisis without once even alluding to the role of the GSE's and their politically driven acquisition of credit risk despite being overleveraged, through use of the implied government guarantee. Nor does it touch on the foreign role in the chase for yield, the connection between the trade deficit and the issuance of debt securities to countries with trade surpluses, or the mismatch between pension promises and pension funding that is one of the major sources of the growth of financial risk over the past two generations. Everything gets laid at the feet of 13 bankers. Unbelievable, yet so convenient, since it allows a whole sector of the elite to ignore the consequences of their policy preferences.
Larry L, Dallas, TX 17 April 2014
The problem with your argument is that same people who wanted to eliminate the Depression-era regulations were also the same people who wanted free trade which offshored a significant of the country's job base (and therefore its tax base and consumer spending capacity).
The result was higher federal deficits (which led to 5-fold increase in the national debt within a generation), higher gov't spending on transfer payments to make up for that lost personal income, a higher trade deficit from all of the imports and the reduced domestic expenditures on everything from education, R&D and infrastructure as a % of GDP.
The very same people who gave us the Financial Crisis were also responsible for the vicious cycle in the real economy.
E.T. Bass, SLC 18 April 2014
More to the point:
A bubble burst. "Bi-partisan" efforts at "home ownership" blew up, due to very highly questionable home mortgages. Which caused Lehman and Govt. Motors to blow up.
Outcome: second worst economic disaster in 100 years.
Today -- the most anti-small business president in history (per N.F.I.B.) who publicly snarls at the U.S. House and the slowest economic recovery in 100 years.
Res ipsa. Entirely predictable.
Steve, Raznick 17 April 2014
To be very clear, very precise, the banks were completely incapable of anything approaching accuracy when it came to the risks they took. Enough with this myth that these are unbelievably intelligent people who having attended a school with name people recognize inculcates them with special powers of divination.
We have 5 financial lobbyists for every congressmen. Just one illustration of how the game is tilted. Those lobbyists do not care about the financial security and welfare of the people. They care only about themselves and thwarting passage of any legislation which creates a sustainable, viable finance industry.
|
|
|
January 13, 2014 | Economist's View
anne said...
Winslow R. -> anne...January 13, 2014
Larry Summers Joins the Reality-based Economics Community
By Dean Baker
In a remarkable departure from earlier versions of Larry Summers, the former Treasury secretary, Harvard president and top Obama economics adviser has recently been sounding the alarm about "secular stagnation" - a prolonged period of time in which the economy operates below its potential level of output. This discovery may provoke choruses of "duh" from the tens of millions of workers who for years have had the opportunity to live with secular stagnation in the form of unemployment, underemployment or stagnant wages.
But even if Summers' discovery is not news to most people, it is a huge development nonetheless. Summers is one of the world's most prominent economists. In the mainstream of the profession it has long been a matter of virtual absolute faith that the economy will tend to sustain full employment levels of output. Any departures from full employment will be quickly corrected by the self-adjusting market, ideally with a helping push from a reduction in interest rates by central banks.
This view seems less credible in the wake of the recession that began more than six years ago. By the estimates of the Congressional Budget Office the economy is still operating at a level of output that is more than six percent below potential GDP, corresponding to a loss in output on the order of $1 trillion a year. The economy is still down more than 8 million jobs from its trend growth path. And the jobs report released on Friday certainly doesn't raise hopes we will be closing this gap any time soon.
Clearly this has not been a quick recovery. Furthermore, with the short-term interest rate at near zero for the last five years, it is not very clear what else the Fed or other central banks can do to spur growth. To Summers' credit he is able to look at this situation and change his views about the economy.
This is striking given how much he is associated with the policies that got us here in the first place. After all, Summers held top positions in President Bill Clinton's Treasury as it pushed its policy of deregulating the financial sector. Summers was at the forefront of those arguing that the financial industry would be more efficient without government regulators constantly looking over their shoulders. As late as the summer of 2005 he derided as "Luddites" those who questioned the wisdom of giving the financial sector free rein.
Summers also seemed just fine with asset bubbles back in the 1990s as the economy rode the stock bubble to four years of strong growth at the end of the decade. He also didn't seem to mind large trade deficits. He continued the high dollar policy, put in place by his predecessor, which was the main cause of the explosion in the size of the deficit at the end of the 1990s and the start of the last decade.
In short, Larry Summers' fingerprints are all over the policies that gave us the housing bubble, the financial crisis and the Great Recession. While there is no reason to forgive him for extremely costly mistakes that would be career-ending in other lines of work, there is also no reason not to welcome Summers' entrance into the world of reality-based economics. Secular stagnation and its manifestations is in fact the greatest economic problem faced by the United States and other wealthy countries.
If Summers deserves credit for recognizing the problem, he still could use some work on his solutions. The line being pushed by Summers is that we need a large dose off public investment, which can boost demand in the short-run and potential output in the long-run. This is of course true, but as Summers should know given his past positions, fiscal stimulus does not appear to be a very easy sell politically. This means that if we want to get back to full employment we may have to look in other directions.
The one currently being pursued to a limited extent by the Fed and other central banks is extraordinary monetary policy such as quantitative easing, in which the Fed buys up long-term government bonds or mortgage-backed securities. This policy is intended to directly lower long-term interest rates and to raise the inflation rate. In the case of Japan, the latter goal is quite explicit.
At a recent panel of the American Economic Association, Summers dismissed the prospects for this approach and warned of dangerous bubbles developing if countries go this route. When one of his co-panelists suggested that bubbles could be reined in with effective macro-prudential policies, such as restricting the flow of credit markets identified as having bubbles, Summers dismissed the idea. He was skeptical that central banks could identify and attack bubbles before they become dangerous to the economy. This was a puzzling claim, since bubbles that are big enough to damage the economy are not hard to see.
Summers also dismissed the idea that developing countries may switch back from running trade surpluses with the advanced countries to again running trade deficits, leading to large increases in demand in the advanced countries. While he claimed that such a shift was implausible, developing country trade surpluses have already been sharply reduced. In the case of China, its trade balance went from a surplus of 10.1 percent of GDP in 2007 to just 2.5 percent last year....
Too bad Summers 'reincarnation' was forced upon him by the realization that he can't make Fed Chairman with the same policies he used as Obama's director of the NEC.
Someone thinks Fischer can plug the hole Larry's failed bid opened. Team Rubin is scrambling, along with the Third Way. I'm watching to see if they scurry for a dark corner or come out on top. Who fills the Fed vice-chairman will be telling.
|
|
|
Sep 11, 2013 | Asia Times
"The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole." - Prof Caroll Quigley, Georgetown University, Tragedy and Hope (1966).
Iraq and Libya have been taken out, and Iran has been heavily boycotted. Syria is now in the cross-hairs. Why? Here is one overlooked scenario.
In an August 2013 article titled "Larry Summers and the Secret 'End-game' Memo," Greg Palast posted evidence of a secret late-1990s plan devised by Wall Street and US Treasury officials to open banking to the lucrative derivatives business. To pull this off required the relaxation of banking regulations not just in the US but globally. The vehicle to be used was the Financial Services Agreement (FSA) of the World Trade Organization (WTO).
The "end-game" would require not just coercing support among WTO members but taking down those countries refusing to join. Some key countries remained holdouts from the WTO, including Iraq, Libya, Iran and Syria. In these Islamic countries, banks are largely state-owned, and "usury" - charging rent for the "use" of money - is viewed as a sin, if not a crime.
That puts them at odds with the Western model of rent extraction by private middlemen. Publicly owned banks are also a threat to the mushrooming derivatives business, since governments with their own banks don't need interest rate swaps, credit default swaps, or investment-grade ratings by private rating agencies in order to finance their operations.
Bank deregulation proceeded according to plan, and the government-sanctioned and -nurtured derivatives business mushroomed into a US$700-plus trillion pyramid scheme. Highly leveraged, completely unregulated, and dangerously unsustainable, it collapsed in 2008 when investment bank Lehman Brothers went bankrupt, taking a large segment of the global economy with it. The countries that managed to escape were those sustained by public banking models outside the international banking net.
These countries were not all Islamic. Forty percent of banks globally are publicly owned. They are largely in the BRIC countries - Brazil, Russia, India and China - which house 40% of the global population. They also escaped the 2008 credit crisis, but they at least made a show of conforming to Western banking rules.
This was not true of the "rogue" Islamic nations, where usury was forbidden by Islamic teaching. To make the world safe for usury, these rogue states had to be silenced by other means. Having failed to succumb to economic coercion, they wound up in the crosshairs of the powerful US military.
Here is some data in support of that thesis.
The end-game memo
In his August 22 article, Greg Palast posted a screenshot of a 1997 memo from Timothy Geithner, then assistant secretary of international affairs under Robert Rubin, to Larry Summers, then deputy secretary of the Treasury. Geithner referred in the memo to the "end-game of WTO financial services negotiations" and urged Summers to touch base with the CEOs of Goldman Sachs, Merrill Lynch, Bank of America, Citibank, and Chase Manhattan Bank, for whom private phone numbers were provided.
The game then in play was the deregulation of banks so that they could gamble in the lucrative new field of derivatives. To pull this off required, first, the repeal of Glass-Steagall, the 1933 Act that imposed a firewall between investment banking and depository banking in order to protect depositors' funds from bank gambling. But the plan required more than just deregulating US banks. Banking controls had to be eliminated globally so that money would not flee to nations with safer banking laws.
The "endgame" was to achieve this global deregulation through an obscure addendum to the international trade agreements policed by the World Trade Organization, called the Financial Services Agreement. Palast wrote:
Until the bankers began their play, the WTO agreements dealt simply with trade in goods - that is, my cars for your bananas. The new rules ginned-up by Summers and the banks would force all nations to accept trade in "bads" - toxic assets like financial derivatives.WTO members were induced to sign the agreement by threatening their access to global markets if they refused; and they all did sign, except Brazil. Brazil was then threatened with an embargo, but its resistance paid off, since it alone among Western nations survived and thrived during the 2007-2009 crisis.Until the bankers' re-draft of the FSA each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives "products".
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers' battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.
As for the others:
The new FSA pulled the lid off the Pandora's box of worldwide derivatives trade. Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim - and the continent is now being sold off in tiny, cheap pieces to Germany.The holdoutsThat was the fate of countries in the WTO, but Palast did not discuss those that were not in that organization at all, including Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. These seven countries were named by US General Wesley Clark (Ret) in a 2007 Democracy Now interview as the new "rogue states" being targeted for take down after September 11, 2001. He said that about 10 days after 9-11, he was told by a general that the decision had been made to go to war with Iraq. Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.
What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers' central bank in Switzerland. Other countries later identified as "rogue states" that were also not members of the BIS included North Korea, Cuba, and Afghanistan.
The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the Group of 20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations.
This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world's largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.
Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.
The "bail-in" template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft "living wills" setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to "bail in" creditors - including depositors - turning deposits into bank stock, effectively confiscating them.
... ... ...
Ellen Brown is an attorney and president of the Public Banking Institute, PublicBankingInstitute.org. In Web of Debt, her latest of 11 books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are EllenBrown.com.
|
|
|
Related: Larry Summers Is Too Much of a Hothead to Be Fed Chair: Kai Ryssdal
The choice has been unusually contentious, in part because of the way Obama touched off the succession race by seeming to declare in an interview the end of Bernanke's tenure before the Fed chief himself did, and months before the end of his term. The contrasting personalities of Summers and Yellen, and the strong feelings voiced by their respective supporters, have also made the nomination process more intense. The White House has also not ruled out other dark-horse contenders.
Few question the economic aptitude or policymaking experience of either candidate. Both have been broadly supportive of Bernanke's policies, though Yellen is generally viewed to be more apt to lean toward greater economic stimulus and less concerned with potential inflationary risks.
Summers is almost universally considered intellectually brilliant but tactless and abrasive, perhaps more prone to impulsive public comments. He famously alienated the Harvard faculty while he was university president with some musings over whether women might lack some capacity to excel in the upper reaches of the sciences.
|
|
|
By James Politi in Washington
Richard Fisher, president of the Federal Reserve Bank of Dallas, is about as outspoken as it gets when it comes to officials at the US central bank. And in Portland, Oregon on Monday - as he spoke to a conference of state retirement administrators - he waded into the heated battle to succeed Ben Bernanke as the next Fed chairman.
His main message seemed to be that the Fed did not need a "prima donna" at its helm – which naturally led to speculation about whether he was referring to Larry Summers, the former treasury secretary, or Janet Yellen, the current vice-chair, who are the two leading candidates for the post.
According to the Oxford Dictionaries, one definition of "prima donna" is "a very temperamental person with an inflated view of their own talent or importance". And with that, it looks like Mr Fisher might have been taking a veiled dig at Mr Summers. Though he is known as a brilliant and engaging economist, Mr Summers also has a reputation for being a little on the arrogant side. Conversely, Ms Yellen is seen as more understated and humble, along the lines of Mr Bernanke, whom Mr Fisher praised for being "self-effacing".
|
|
|
August 16, 2013 | Economist's View
DrDick -> bakho...
This really gets to the heart of the problem. Our democracy did not just happen to get broken. This is the result of a deliberate, decades long disinformation campaign by movement conservatives as an outgrowth of the Goldwater campaign which established the vast network of rightwing think tanks, media outlets, and the rest. They realized that conservative policies are vastly unpopular on their merits and that they could only win elections by lying and deception.
BigBozat -> DrDick...
Actually, the movement conservative disinformation campaign dates back to [at least] the Founding (in this country, anyway).
It has morphed and changed parties and transmuted its arguments in myriad ways... but it has existed long before Goldwater was even born.
Dryly 41 -> Anon 1...
I think you have to distinguish the Democratic wing of the Democratic party and the Wall Street wing of the Democratic party. Clinton, Rubin, Summers, Ludwig etc and Obama all come from the Wall Street wing.
Clinton and company abandoned the "strict supervision" of FDR, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford and Carter in favor of Harding, Coolidge, and, Hoover's laissez faire. In this Clinton and Obama have followed Reagan and the Bush family.
|
|
|
February 22, 2010 | Real-World Economics Review Blog
Alan Greenspan has been judged the economist most responsible for causing the Global Financial Crisis. He and 2nd and 3rd place finishers Milton Friedman and Larry Summers, have won the first–and hopefully last-Dynamite Prize in Economics.
They have been judged to be the three economists most responsible for the Global Financial Crisis. More figuratively, they are the three economists most responsible for blowing up the global economy.
Most than 7,500 people voted-most of whom were economists themselves from the 11,000 subscribers to the real-world economics review. With a maximum of three votes per voter, a total of 18,531 votes were cast. The poll was conducted by PollDaddy. Cookies were used to prevent repeat voting.
Dynamite Prize Citations
- Alan Greenspan (5,061 votes): As Chairman of the Federal Reserve System from 1987 to 2006, Alan Greenspan both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation.
- Milton Friedman (3,349 votes): Friedman propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of fantasy-based theories of economics and finance that facilitated the Global Financial Collapse.
- Larry Summers (3,023 votes): As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), Summers worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also helped Greenspan and Wall Street torpedo efforts to regulate derivatives.
|
|
|
"And the story behind it shows that Summers' character flaws matter."
Zero Hedge
Submitted by F.F. Wiley via Cyniconomics blog,
'Larry Summers for Fed Chair' proponents are working hard to reverse his generally poor reputation and seem to have gained some ground. They've tempted even Fed skeptics like me with reports that Summers doesn't believe much in quantitative easing. But his supporters are also making claims that don't stand up to the facts.
For example, some Summers fans have tried to rewrite history by claiming that his pre-2008 opposition to derivatives regulation was nothing more than an objection to CFTC Chair Brooksley Born's so-called "crude" proposals. In fact, Summers fought for legislation banning virtually all regulation for over-the-counter derivatives, not just the type favored by Born.
What's more, he continued to defend pre-crisis banking practices long after Born's 1999 resignation, as shown by his harsh dismissal of Raghuram Rajan's famous 2005 warning of rising financial sector risks. Summers even led the charge to discredit Rajan.
My reason for writing about Summers once again, though, isn't to discuss specific policies but to revisit the character issues that seem to follow him from job to job. And to explain why they matter.
Two weeks ago, I shared an account of White House officials being driven to wits' end by Summers' obsession with status symbols, such as personal chauffeurs and important-looking seating locations at presidential speeches. In another post a few months ago, I referred to his mantra that you should never admit mistakes.
Call me old-fashioned, but I think we should be wary of power-hungry egotists whose personal philosophy is to obscure the truth. And there's one more story – told in Ron Suskind's Confidence Men and then again in former FDIC Chair Sheila Bair's Bull by the Horns – that helps to explain why.
Both authors wrote extensively about the Obama administration's what-to-do-about-the-big-banks discussions in 2009. For much of the first half of that year, policymakers debated using the FDIC's resolution process or other methods to shift at least some of the burden of the financial crisis onto the right parties. By that, I mean bank shareholders, bondholders and executives, not taxpayers. Citibank was the test case, since it was horribly managed and surviving solely on a succession of Treasury Department bailouts.
How the banks preserved our toxic status quo
Unbeknownst to most of us in 2009, the battle lines in the debate were weighted strongly against Citi.
Treasury Secretary Tim Geithner was the bank's guardian angel, advocating relentlessly for its interests and fighting to block proposals its management didn't like.
On the other side: Summers, Bair, President Obama, former Fed Chair Paul Volcker (Obama's top independent economic advisor) and CEA Chair Christine Romer all wanted Citi to pay a steep price for its mismanagement. All five of these heavyweight policymakers wanted to restructure Citi as a prelude to a tougher approach to all of our mega-banks. And Bair was suggesting a prepackaged bankruptcy, in which the bank would continue to operate as a smaller entity after haircutting creditors, stripping bad assets, tossing out management and wiping out shareholders.
In other words, there were five top policymakers who wanted to strike a blow on behalf of taxpayers and just one – Geithner – defending Citi's management. (I'm not counting Citi's hopelessly captured regulators at the Fed and the Treasury Department's Office of the Comptroller of the Currency, since these organizations weren't part of Obama's inner circle.)
Against these seemingly insurmountable odds, how the heck did Geithner win?
My reading of Confidence Men suggests four reasons (the fourth repeated in Bull by the Horns):
- Rather than leading from the Oval Office, the president relied on his lieutenants to set direction. He never actively pushed them to restructure Citi even after explicitly stating that he wanted to see this happen.
- Geithner convinced the others that he was putting together a restructuring plan (which would require Bair's help), but never actually did so.
- Volcker had almost no influence because he spoke mostly with Obama and his role was informal.
- The FDIC was remarkably kept in the dark. Geithner, who had no interest in the regulatory process and knew little about bank resolutions, was in the driver's seat as Treasury Secretary. Neither he nor Summers told Bair, our foremost expert on these matters, that Obama favored a restructuring. Summers' decision to withhold information was especially damaging, since he and Bair stood on the same side of the debate. But this is apparently how Summers rolls, always working to elevate his own role while marginalizing other players.
Here's an excerpt from Confidence Men describing Summers' underhanded approach:
Bair got a call from Summers's office ... Summers was gracious and eager, particularly interested in discussing the basics of how a prepackaged bankruptcy might work on a bank like Citi. Bair ran through it.
Summers was circumspect. He didn't tell her that he and Romer were now, for the most part, in Bair's camp and that they'd be in a "showdown" Sunday with Geithner about the future of big banks like Citi. He asked how deep the hole was – the hole that some funds, from somewhere, would have to fill if the bank were shut down and reopened. She said it was about $600 billion tops, and explained the "intrinsic value" calculus.
...Without context, though, Bair couldn't really discuss how these cost estimates could shape options and policy. She just considered it an informational call and told Summers to call anytime.
And this is Bair's direct account of the same conversation (from her book):
It was a confusing conversation because his comments seemed completely opposite from what I was getting from Tim. Again, only later would I learn (by reading Ron Suskind's book) that Summers had been pushing to nationalize Citi and break it up. If only he had let me know, we could have worked with the White House to impose some accountability on the institution. It would have completely changed the political dynamic and the growing anger and resentment against the government's seemingly endless willingness to throw money at big institutions. The public justifiably wanted retribution. Citi should have been led to the pillory.
In other words, Summers refused to enlist Bair's support even as he needed her answers to basic questions. And he kept the reasons for his questions secret. Kind of like engaging your doctor in general discussion without revealing your symptoms or requesting an examination.
Ultimately, Geithner exploited Summers' poor teamwork to shield the big banks from any serious challenges to their government-sponsored chokehold on the economy. Geithner's success was one of our biggest failures. And the story behind it shows that Summers' character flaws matter. They're not harmless personality quirks, as his supporters would like you to believe. On the contrary, the man's humongous ego can stand in the way of policies that need to be enacted. In my opinion, this is inexcusable. It should rightly eliminate him from the Fed Chair discussion, and before you even consider his poor track record as a public figure.
On a related matter…
Congratulations are in order to India Prime Minister Manmohan Singh. In my earlier post on the Fed succession, I asked the following:
Why not appoint someone with a track record of getting things right, you ask? Someone like a Rajan – with a proven ability to think critically about economic theory, while foreseeing developments that more famous economists only recognize in hindsight?
Last week, Singh chose Rajan to be the next governor of the Reserve Bank of India, to replace the outgoing chief, Duvvuri Subbarao, on September 4.
In a world of fairness and accountability, there would have been a bidding war for Rajan's services. As it is, India's central bank will get a guy who saw the global financial crisis before the fact, whereas Obama's shortlist consists only of folks who've been blinded by the spectacularly flawed models of mainstream economic theory.
|
|
|
August 5, 2013 The Baseline Scenario | 31 Comments
The indefatigable Brad DeLong has devoted his energies to singlehandedly protecting Larry Summers from the Internet (although, he makes pains to say, he likes Janet Yellen almost as much). Although I'm letting most of the Fed chair sideline debate pass me by, DeLong and others have raised one issue that played an important symbolic role in 13 Bankers and, more generally, the historical background to the financial crisis: Brooksley Born's proposal to think about regulating OTC derivatives in 1998.
For those who don't know the story, it basically goes like this. Born, as chair of the CFTC, was worried about the risk posed by OTC derivatives, which were effectively unregulated at the time. On May 7, 1998, the CFTC issued a "concept release" asking for comments about the regulation of OTC derivatives. Summers, then deputy treasury secretary, along with Treasury Secretary Robert Rubin, Fed Chair Alan Greenspan, and SEC Chair Arthur Levitt, opposed Born, and they issued their own press release on the same day opposing the CFTC. Over the next several months they successfully blocked the CFTC from regulating OTC derivatives, convincing Congress to stop the CFTC from moving forward, a position that was enshrined in statute in the Commodity Futures Modernization Act of 2000.
Now that it is widely recognized that OTC derivatives needed to be regulated, this has been an uncomfortable bit of history for Summers et al. The current defense was put forward by an unnamed person and by DeLong:
One person close to the process described it this way: "The concern with Born's concept release back then was that CFTC jurisdiction rested on the contracts being futures contracts, and if they were futures contracts, they had to be exchange traded, and existing hedging contracts were not exchange traded (at the time they basically couldn't be), so there was a concern that the existing contracts would be void (illegal)." . . . Cal Berkeley professor J. Bradford DeLong, who has authored papers with Summers, Tweeted last night: "'Brooksley Born approach' made all existing derivatives contracts unenforceable. Very bad idea."
There are several problems with this defense.
First, this argument targets one possible outcome of Born's process, not the process itself-which is what Summers et al. shut down. The purpose of the concept release was "to solicit comments on whether the regulatory structure applicable to OTC derivatives under the Commission's regulations should be modified in any way . . . and to generate information and data to assist the Commission in assessing this issue." Born wanted to discuss the issue. Yet her opponents then-and now-jumped to the "worst" possible outcome (for them, or rather for certain market participants) and equated that with what Born was doing.
Second, that isn't how the law works. It was recognized at the time that OTC derivatives were in a legal gray area-hence the desire for "certainty" that was finally satisfied by the CFMA. If some activity is in a legal gray area, and you do it anyway, you can't simply assert that now the activity must be allowed by law because you are doing it. If the contracts you wrote, knowing they might not be enforceable, now become definitively unenforceable-well, tough luck. You can't dictate what the law is simply through your own actions.
Third, the argument proves too much. Again, Born was proposing to think about about whether and how OTC derivatives should be regulated. If that is a "very bad idea," then, by implication, OTC derivatives can never be regulated-because you have to think about regulating something before you can regulate it. Is that really a position that Summers and DeLong want to defend?
Fourth, if the problem is existing contracts, then there's an obvious solution: grandfather them. In fact, the concept release included this language:
"This release does not in any way alter the current status of any instrument or transaction under the CEA. All currently applicable exemptions, interpretations, and policy statements issued by the Commission regarding OTC derivatives products remain in effect, and market participants may continue to rely upon them."
It is true that that language applied to the release itself, not necessarily to any regulations that might have been issued later. But those regulations would have to go through the usual notice-and-comment process, and the other regulatory agencies would obviously be at the table. If Summers's real concern was past contracts, then that's something he could have negotiated with Born.* (And if she refused, then he could have gone to Congress, or to the courts.) That concern doesn't justify what happened.
Summers would be better off-at least as far as this Fed chair thing is concerned-simply admitting he was wrong, rather than trying to win a fifteen-year-old argument. At the end of the day, however, the whole Brooksley Born affair is a bit beside the point-if the question is trying to understand Larry Summers. The Summers camp thinks they can justify his anti-regulatory stance during the Clinton years by making Born look like an extremist; by implication, he was just a moderate.
But the Born affair (and, or course, the great "thirteen bankers" quote) is just one piece of evidence. We know that Summers opposed derivatives regulation. The report of the President's Working Group on Financial Markets with his name on it unanimously recommended providing "legal certainty" by definitively exempting derivatives from the Commodity Exchange Act. He was secretary of the treasury when the CFMA was passed. Robert Rubin said in his 2003 memoir (before he had anything to be embarrassed about), "Larry characterized my concerns about derivatives as a preference for playing tennis with wooden racquets–as opposed to the more powerful graphite and titanium ones used today." (Rubin now claims that he was in favor of derivatives regulation, although he didn't do anything about it.)
And it isn't as if Summers had some other, better proposal to regulate OTC derivatives. He was against it. That's the issue-not whether the legal status of derivatives contracts under the CEA somehow changed because of a concept release issued by the CFTC.
* This is what Levitt now says he wishes he had done.
31 Responses to The Lame "Uncertainty" Defense
Brad DeLong | August 5, 2013 at 9:15 am |Anon | August 5, 2013 at 1:03 pm |Touché…
Patrick R. Sullivan | August 5, 2013 at 1:05 pm |A little problem with your (and DeLong's facts). In 1992 - for the purpose of dealing with financial derivatives, that fell under the Commodity Exchange Act's definition of futures - the CFTC was given the legal authority to exempt certain contracts from regulation - and under Wendy Gramm promptly exempted the derivatives in question. There was no legal question as to whether these contracts fell under the jurisdiction of the CFTC. The only question was whether the CFTC would continue to exempt them entirely from regulation.
The statement "It was recognized at the time that OTC derivatives were in a legal gray area" is simply false.
[See comments here, http://economicsofcontempt.blogspot.com/2009/05/brooksley-born.html
"I don't actually think the financial industry was seriously disputing the CFTC's legal authority to regulate swaps. Rubin claimed that was his objection, and so did some people in the industry, but in reality they all knew that it wasn't a serious objection. (All the NY law firms, including mine, told them that the CFTC was well-within its jurisdiction.) It's kind of pathetic that Rubin claimed to be relying on a memo by Treasury lawyers that apparently never existed."]The uncertainty you reference is a myth created by by opponents of derivatives regulation. The fact that such a myth is cited as fact by educated people such as yourself and Prof. DeLong, who can be cited as experts by people who want to disseminate disinformation, is one of the reasons our financial system is in such bad shape.
Patrick R. Sullivan | August 5, 2013 at 1:19 pm |Oh, c'mon Brad, don't be a wimp. Kwak is misrepresenting what happened back in 1999.
Born was engaged in a power grab regarding foreign currency futures, and to a lesser degree interest rate swaps. Credit default swaps–the ogre, supposedly, in this financial crisis–aren't even mentioned in the 'Working Group' paper linked to above.
Nor was it a case of the OTC market being 'unregulated', just by whom;
'A criticism of OTC derivatives is that they can be used as a means to circumvent regulation. For example, institutional investors may be prohibited from investing in certain types of financial instruments but may be able to assume a nearly identical economic position by entering into a derivatives transaction. The Working Group is aware that the derivatives industry has been quite creative in tailoring particular products to achieve certain regulatory results that were not originally intended. As difficult as the task may be, the Working Group nonetheless believes that in most instances such "regulatory arbitrage" issues should be addressed by amending the underlying statutes and regulations that most closely pertain to the regulatory goal to be achieved, and should not be used as a basis for the imposition of an unwarranted regulatory regime on derivatives. For example, judgments about the authority of pension funds or state and local governments to enter into certain derivatives transactions should be made through the laws that directly govern such entities.'
The SEC and banking regulators make more sense here than an agency that was specifically set up to regulate soy beans and pork bellies, no?
Anon | August 5, 2013 at 1:50 pm |Anon, did you bother to read the Working Group paper?
'A cloud of legal uncertainty has hung over the OTC derivatives markets in the United States in recent years, which, if not addressed, could discourage innovation and growth of these important markets and damage U.S. leadership in these arenas by driving transactions off-shore.
Recognizing the important role that derivatives play in our financial markets, and the dangers of continued legal uncertainty, the Working Group has spent the past six months focusing on OTC derivatives and examining the existing regulatory framework, recent innovations, and the potential for future development. At the request of Congress and the Chairmen of the Senate and House Agriculture Committees, we have prepared the attached report, which reflects the consensus we have reached on a set of unanimous recommendations.'Note that, 'At the request of Congress….' The paper is quite specific as to what those uncertainties were.
Anon | August 5, 2013 at 5:43 pm |As Econ of Contempt, a long-term securities lawyer, indicates in his comment, such claims, asserted by proponents of financial deregulation, were "based on a memo by Treasury lawyers that apparently never existed".
Given Econ of Contempt's comments, apparently what was going on in the Working Paper report is a complete revision of a well-understood aspect of the law - for the purposes of promoting financial deregulation. Remember that every law is completely uncertain if you are allowed to start parsing the meaning of each word in the law anew, as if there were no existing body of interpretation.
Patrick R. Sullivan | August 5, 2013 at 6:13 pm |In Brooksley Born's own words:
"I was told by the secretary of the treasury that the CFTC had no jurisdiction, and for that reason and that reason alone, we should not go forward," Born says. "I told him . . . that I had never heard anyone assert that we didn't have statutory jurisdiction . . . and I would be happy to see the legal analysis he was basing his position on."
She says she was never supplied one. "They didn't have one because it was not a legitimate legal position," she says.
http://alumni.stanford.edu/get/page/magazine/article/?article_id=30885
It's interesting that no one who signed the Working Group paper that advocated for the CFMA had any legal training.
Patrick R. Sullivan | August 5, 2013 at 6:19 pm |You're citing an article from 2009; aka, hindsight. I'm asking for any reference by her to CDS BEFORE the 2008 financial crisis.
Moses Herzog | August 5, 2013 at 6:25 pm |From the CFTC's own website;
'February 25, 1997–In Dunn v. CFTC, the U.S. Supreme Court rules that foreign currency options are "transactions in foreign currency" for purposes of the Treasury Amendment exclusion to the Commodity Exchange Act, and, thus, that the CFTC has no jurisdiction over such transactions.'
Moses Herzog | August 5, 2013 at 6:59 pm |It is very ironic to me that although I often disagree, and vehemently disagree, with many of "EconomicsOfContempt" blogger's opinions and statements, it seems to me that of all the people above (including host James Kwak, whom I usually agree with about 75%+ of the time), it is "EconomicsOfContempt" who is the only one who seems to accurately remember history on this particular topic.
And please believe me, it really kills me to admit "EconomicsOfContempt" blogger is right about anything……
After Rubin, Greenspan, and Levitt threatened to beat her up after school if Brooksley dared to perform her job, and grab a year's worth of Brooksley's school lunch money if she meekly mumbled the words "swaps/derivatives regulation" in a public forum, Levitt is the only one of the 3 BULLIES of Brooksley Born, who was willing to say 3 words after 2008 made it abundantly clear: "I was wrong". No "easy feat" for your prototypical super-arrogant J-E-W (take Larry Summers as the baseline example).
Anon | August 5, 2013 at 8:25 pm |Excuse me, I should have said "the 4 BULLIES of Brooksley Born". I've been trying sooooooo hard to forget the supreme A-S-S HAT named Larry Summers, I nearly forgot for the time it took to post a comment.
Bruce E. Woych | August 5, 2013 at 9:20 pm |Most interesting. The DeLong tweet was debunked in real time by @dsquareddigest, and retweeted by DeLong.
Dan Davies @dsquareddigest 31 Jul
@delong that was total industry bullshit propaganda about the 98 concept release – if LS believed it at the time that's a real problemBruce E. Woych | August 5, 2013 at 9:32 pm |http://www.huffingtonpost.com/news/larry-summers/
Larry Summers Defended Enron…
Larry Summers Is Also Lousy At Crisis Management…
The Economy Is Awful and Larry Summers Should Not Be Fed Chair.
Derivatives and Steroids: Larry Summers Merits Same Fate as A-Roid
Summers' View on Monetary Policy Not So Hidden…
Larry Summers Is An Unrepentant Bully…
Obama Defends Larry Summers, Disses HuffPost In Capitol Hill MeetingDryly 41 | August 5, 2013 at 9:41 pm |Uploaded on Oct 17, 2009
Watch the full-length episode at http://video.pbs.org/video/1302794657 FRONTLINE | "The Warning" | PBS
Bruce E. Woych | August 5, 2013 at 9:58 pm |I read all these comments but I still can't see the social utility of these financial innovations. Do they contribute to productive economic growth? Or are they just gambling inside a bank? Could someone address these issues?
Bruce E. Woych | August 5, 2013 at 10:08 pm |Anon (above) Great link & very pertinent material @
http://economicsofcontempt.blogspot.com/2009/05/brooksley-born.html but the very first comment stands out: [quoted]Anonymous said…[to the Author]
"You're a lawyer. Presumably you understand that the issue Born was raising with that Concept Release was the CFTC's obligation under the law to reconsider its 1993 exemption of swaps contracts from regulation given the huge growth in the industry. The financial industry was objecting to the fact under the pre CFMA Commodities Exchange Act that the CFTC had clear legal authority to regulate swaps as it saw fit.
For more info on this you should read Born's 1998 Congressional testimony: http://financialservices.house.gov/banking/72498ftc.htm
and the recent Stanford profile where Born comments on the debacle: http://www.stanfordalumni.org/news/magazine/2009/marapr/features/born.htmlThe saddest thing about this story is that Born was a regulator who was serious about doing her job well - and the Concept Release is clear evidence of this. What regulations she would have proposed are unknowable - because she was prevented from doing the preliminary study that would have allowed her to design suitable regulations!"
[In reply the Author concedes]…
Economics of Contempt said…"You're right, and I meant to address that in my post, but I somehow forgot."
==============================================================
There seems to be a good deal of "forgetting" and re-shaping going on here. And I would laugh if it didn't make me sick to my stomach hearing Brooksley Born now accused of some simplistic revisionist "power grab" for standing firm against the insider power structure that existed at that time and for the most part in new snakeskin… to this day.Bruce E. Woych | August 5, 2013 at 10:10 pm |@Dryly 41 (hope this helps…from the Real News Network)
Quadrillion Dollar Derivatives Market 20 Times Global GDP
Bruce E. Woych | August 6, 2013 at 11:21 am |Critique:
Derivative Meltdown and Dollar Collapse
Annie | August 6, 2013 at 2:03 pm |Credit Derivatives: A Quick Chronological History
http://www.mindcontagion.org/derivatives/creditderivatives.html
http://www.mindcontagion.org/derivatives/hd2000.html
http://www.mindcontagion.org/derivatives/hd2003.html
http://www.mindcontagion.org/derivatives/hd2007.htmlBruce E. Woych | August 6, 2013 at 4:09 pm |http://en.wikipedia.org/wiki/Hurricane_Katrina
@Paddy, is that the *event* you're talking about?
"….when the crisis hit that collateral wasn't sufficient, and AIG wasn't liquid…."
Right, just when it went to "liquid", literally, that it became illiquid.
Seriously, what the hell kind of excuse is that to give for the first major city to bite the dust from climate change – that it's just a blip on your financial screen full of algorithms?
Does the word "delusional" even exist in your constant reconfiguration of the same 50 words to mean something different every time they're used?
Throw it in there – see what happens to the virtual control of conversation…
Just up for grabs in a way you'll never catch on to, Paddy….anyone can win.
But if you want some woman to football around, psychologically, why not the Governor of Louisiana at the time Katrina hit. She was so sincerely dumb when presuming on the protection of God without doing anything smart like "…get out and into higher ground…" that it seemed smart at the time.
Not fair what you are doing to Born and even worse, you are doing it using omission of the facts in the timeline.
Don't matter who got a piece of you, CIA, DEA, IRS, FBI, and on and on in the perpetual war machine, you go back to lay a trap for a different game. One in which they are the prey. Really sick sht out there, man. Zombies…
Blood lust for money – where do we go – in the MILLIONS – to get away from their reach? That's what everyone is asking….this is epic in it's re-arrangements of of tribes down the timeline to the "Now" we all have a piece of that molecule of time in this planet space…by the time you own it all, the way you got it all will destroy it all.
Go figure….
Dryly 41 | August 6, 2013 at 5:31 pm |http://www.arnoldporter.com/professionals.cfm?action=view&id=557
Arnold & Porter LLP
Brooksley Born is a retired partner of the firm, which she joined as an associate in 1965. She was the head of the firm's derivatives practice and represented domestic and international clients in legislative, litigation, regulatory, and transactional matters involving derivatives transactions and financial markets. Ms. Born also specialized in complex civil litigation and arbitration. She served on the firm's Policy Committee and chaired its Pro Bono Committee and Associates Evaluation Committee.From 1996 to 1999 she was chair of the US Commodity Futures Trading Commission (CFTC), the federal government agency that oversees the futures and commodity option markets and futures professionals.
Bruce E. Woych | August 6, 2013 at 5:45 pm |Perhaps Paddy would favor us with a recitation of the social utility of those wonderful financial innovations developed since the 1990′s, and enlighten us as to the role they played in causing the financial system to collapse after September 15, 2008 for the first time since October 1929 in the administration of Herbert Hoover. There was 25 per cent unemployment, one-third of the nation ill-housed, ill-clothed and ill-fed, soup lines, bread lines, Hoovervilles and brother can you spare a dime. Perhaps Paddy could tell us how we had a safe and sound financial system for over six decades until we deregulated and reverted to Harding, Coolidge and Hoover. Please, please tell us.
Bruce E. Woych | August 6, 2013 at 6:08 pm |The Untold Story: Brooksley Born, Larry Summers & the Truth …
http://www.imackgroup.com/mathematics/989981-the-untold-story-brooksley-born-larry...
Oct 5, 2012 … Larry Summers is attempting to re-write history at the expense of … and they might just find one critical point revealed in Mr. Cohan's article.
[PERTINENT EXCERPT]: Oct 5, 2012"As the western world wakes to the fact it is in the middle of a debt crisis spiral, intelligent voices are wondering how this manifested itself? As we speak, those close to the situation could be engaging in historical revisionism to obfuscate their role in the design of faulty leverage structures that were identified in the derivatives markets in 1998 and 2008. These same design flaws, first identified in 1998, are persistent today and could become graphically evident in the very near future under the weight of a European debt crisis.
Author and Bloomberg columnist William Cohan chronicles the fascinating start of this historic leverage implosion in his recent article Rethinking Robert Rubin. Readers may recall it was Mr. Cohan who, in 2004, noted leverage issues that ultimately imploded in 2007-08.
At some point, market watchers will realize the debt crisis story will literally change the world. They will look to the root cause of the problem, and they might just find one critical point revealed in Mr. Cohan's article.
This point occurs in 1998 when then Commodity Futures Trading Commission (CFTC) ChairwomanBrooksley Born identified what now might be recognized as core design flaws in leverage structure used in Over the Counter (OTC) transactions. Ms. Born brought her concerns public, by first asking just to study the issue, as appropriate action was not being taken. She issued a concept release paper that simply asked for more information. "The Commission is not entering into this process with preconceived results in mind," the document reads.
Ms. Born later noted in, the PBS Frontline documentary on the topic speculation at the CFTC was the unregulated OTC derivatives were opaque, the risk to the global economy could not be determined and the risk was potentially catastrophic. As a result of this inquiry, Ms. Born was ultimately forced from office.
This brings us to Lawrence Summers, the former Treasury Secretary of the United States and at the time right hand man to then Treasury Security Robert Rubin. Mr. Summers was widely credited with implementation of the aggressive tactics used to remove Ms. Born from her office, tactics that multiple sources describe as showing an old world bias against women piercing the glass ceiling.
According to numerous published reports, Mr. Summers was involved in. silencing those who questioned the opaque derivative product's design. "
SPECIAL ATTENTION TO PATRICK r. SULLIVAN;
" …A POWER GRAB? " ARE YOU ON Summers' PAYROLE? This is what Summers attempted to initiate against Brooksley Born to cover his tracks just last year! Are you working his talking points?
[Quoted Excerpt]
"Here some neutral opinion from the article above that may address the questions you raised above:
Mr. Summers comments in the William Cohen article are not only re-writing history to cover their tracks if the leverage implosion does occur, but they are trying to damage the reputation of a female pioneer whose only offense was pointing out appropriate issues with fundamental leverage issues that will likely impact all.Was this the First Warning Mr. Summers Ignored?
In addition to time spent fighting Ms. Born over transparency and risk management issues unregulated derivatives, Mr. Summers was also influential in the operation of the Harvard University pension fund. Sources deep in the derivative industry say that Mr. Summers was given a warning about the Collateralized Default Swaps (CDS) in which Harvard had invested. The CDSs were a structurally different product than what Ms Born warned against, but again carried many of the same fundamental derivative design flaws."
"This is the guy [Summers] that lost something like 20-30% of the Harvard endowment fund investing in CDOs–the very crap that Born would have been 'regulating.' Iris [Mack] warned Summers of this and she was summarily fired."
Please read the real history…and the entire article and stop acting out like an Irish Troll -- http://www.imackgroup.com/mathematics/989981-the-untold-story-brooksley-born-larry-summers-the-truth-about-unlimited-risk-potential/
|
|
|
Washington Post
Current and former Fed officials said that they see Summers as a Fed chair who would, in important ways, represent a shift back to the balance of power in the Alan Greenspan era, with decisions concentrated among the chairman and a few aides and the rest of the Fed policymakers expected to vote as they are told and go with the flow.
They particularly fear that Summers would be dismissive of the kind of sensibility that reserve bank presidents bring to the table eight times a year at the Federal Open Market Committee, the Fed's monetary policy arm. They, too, are economists, but they also spend much of their time speaking with business executives in their Fed districts, going to Chamber of Commerce-type events, and gathering anecdotal information about what is happening on the ground around the country. Summers is more drawn to theoretical analysis.
Summers also has a track record of being supremely confident in his own intellect, to the point of being dismissive of those with whom he clashes. Summers's impolitic remarks about women in the sciences may have been the immediate trigger for his resignation as president of Harvard, but it was his long-simmering tension with a large swath of the Harvard faculty that laid the seeds for his downfall.
|
|
|
delong.typepad.comGrueBleen
Hmmm. Kinda reminds me of a story I once heard about IBM: that it took a huge amount of data gathering and persuasion to get IBM to adopt a new, or changed, policy/strategy/tactic. But that once adopted, having been through an exhausting process of approval, it was all but impossible to stop it, even when circumstances had significantly changed.
Or, in short, "this was approved and supported by (ex)President, and economics guru Larry Summers, so it must be right for all time".
The price of fiscal success is eternal (and repeated, and systematic) vigilance ?
Full Employment Hawk:
Summers deserves to be bashed for being one of the main people responsible for Obama dropping the ball on the economy during his first two years, which resulted in the Republicans gaining control of the House in the 2010 election, putting them into a position to hamstring Obama since then.
As Obama's main economic advisor he should have made sure that the vacancies on the BOG be filled promptly with people who would take the Fed's mandate to seek maximum employment seriously. Not only were positions left vacant for over a year, but most of the people who were appointed have not shown any urgency to make moving the economy to full employment the Fed's overriding priority (since inflation is below target). And he failed to recommend against the reappointment of Bernanke, the Hamlet of monetary policy. In the area of fiscal policy he failed to support Romer in her recommendations for a larger fiscal stimulus, but, rather, stood in her way. And he failed to oppose and probably supported the Obama administration's disasterous switch in priorities from unemployment reduction to deficit reduction in 2010.
On the basis of this record, one can conclude that he is the wrong man for the job and that Yellen is a lot more qualified than he is.
|
|
|
July 24, 2013 | economistsview.typepad.com
Tim Duy:
save_the_rustbelt:Shock and Awe(ful), by Tim Duy: Yesterday's hot story from Ezra Klein that Larry Summers was the lead candidate for the top spot at the Federal Reserve was greeted with shock and awe(ful). I wish I could say that I was surprised, but at the end of last month I tweeted:
I often think we have prematurely declared Janet Yellen the front runner. We forget that politics will be in play. http://t.co/ghIPnl0kjj
My concerns were only reinforced when news broke last week of the campaign against current Vice Chair Janet Yellen. From Ezra Klein:
The favored parlor game of the political-economic complex right now is guessing who will replace Ben Bernanke as chairman of the Federal Reserve. The clear front-runner is Federal Reserve Vice Chairman Janet Yellen. But she's by no means a sure thing.
One important reason she's not - and I don't know another way to say this - is sexism, as evidenced by the whispering campaign that's emerged against her.
Yesterday, Klein declared Summers the front-runner:
People dismissed Summers's chances a month or two ago, but he's increasingly viewed as the leading candidate today - and opinions on this, for reasons I don't fully understand (though I suspect have to do with a bunch of elite trial balloons going up at the same time), have really hardened in the last 72 hours.
Klein lists a variety of reasons in favor of Summers, most important of which I think is that President Obama and his staff know and like Summers, while Yellen is a virtual unknown in White House circles. This is also the message of Washington Post reporter Zachary Goldfarb's tweet yesterday:
Larry Summers visited White House 14 times in past 2yrs. Janet Yellen visited once, records show. pic.twitter.com/ufFuVbrH7V
- Zachary A. Goldfarb (@Goldfarb) July 23, 2013Reaction was swift and fierce from some quarters of the blogosphere. Cardiff Garcia begins with a defense of Summers:
...Some of the mistakes of his past, such as his role in deregulating derivatives (the Brooksley Born episode) or the Harvard interest rate blowup, don't really tell us much about his capacity to guide macroeconomic stabilisation policy.
His more recent mistakes, specifically his failure to better advise Obama on the stimulus (should have been bigger) and housing policy (should have done more for people in foreclosure and underwater homeowners), included political considerations that are hard to untangle from his actual views.
before launching into his reasons for supporting Yellen, beginning with the most important:
The simplest reason is that she is more conventionally qualified for the job, boasting a much longer entry in her CV as a monetary policymaker.
Like him or hate him, Summers lacks Yellen's depth of exposure to monetary policy. If relative experience with monetary policy is a requirement for the job, Yellen clearly has the upper hand. Felix Salmon, not exactly a fan of Summers to begin with, sums up the situation:
...if Obama picks Summers, it won't be on the merits; instead, it will be on the grounds that Obama likes Summers, and is in awe of his intelligence. (Summers is, to put it mildly, not good at charming those he considers to be his inferiors, but he's surprisingly excellent at cultivating people with real power.)
Salmon then launches into an attack on Summers:
What's more, the move would be a calculated snub to bien pensant opinion. Never mind the utter shambles that Summers made of Harvard, or the way he treated Cornell West, or his tone-deaf speech about women's aptitude, or the pollution memo, or the Shleifer affair, or the way he shut down Brooksley Born at the CFTC, or his role in repealing Glass-Steagal, or his generally toxic combination of ego and temper - so long as POTUS likes Larry, and/or so long as Summers is good at working key Obama advisors like Geithner, Lew, and Rubin, that's all that matters.
Evidently, Salmon holds a grudge a bit longer than Garcia. Now, if only President Obama would shift his focus from Summers and Yellen to Ben Stein, then we would see some real fireworks from Salmon.
Mark Thoma has a more succint reaction:
Larry Summers is the Front-Runner? WTF?
Perhaps not all is lost. Back to Klein:
That's not to say Summers is anywhere near a sure thing. His confirmation would be far tougher than Yellen's, as Republicans will make him answer for the stimulus and the bailouts, and progressive Democrats have a list of grievances going back to financial deregulation in the Clinton-era. There's also the simple fact that appointing Yellen would break a significant glass ceiling - and do so in an administration that hasn't always been great about appointing women to top economic positions. And Summers continues to be a polarizing figure: Those who like him love him, but those who don't like him really don't like him.
That said, one gets the feeling that this is not a sudden decision. Instead it is one that has been building for weeks, at least since June 29, when I began to get nervous about the assumption of Yellen as a front-runner. I suspect that if the position has hardened within the White House as Klein suggests, it is because Obama has made his choice and it is time for everyone to get on board.
I have to say that if Yellen is not the pick, I will be disappointed. I think she the best qualified candidate for the job, and agree with the pro-Yellen arguments of Garcia, Salmon, and Bill McBride. I am very concerned about Summer's disposition to be a de-regulator, especially after we see that the Federal Reserve, in its infinite wisdom, gave permission for investment banks to openly manipulate commodity markets. Does anyone see Summers pushing back at that kind of regulation, or getting on board? I don't think that he is the kind of person to take the words of Adam Smith to heart:
The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Bottom Line: Nothing is certain until the announcement is made and the Senate takes its turn, but it is looking like the White House is pushing to make Larry Summers the next Federal Reserve Chairman. The curse of the Vice Chair would then live on.
Just give the job to Robert Rubin and cut out Larry the middle man.
anne:
anne -> anne...I am very concerned about Summer's disposition to be a de-regulator, especially after we see that the Federal Reserve, in its infinite wisdom, gave permission for investment banks to openly manipulate commodity markets....
-- Tim Duy
[ http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html
July 20, 2013
A Shuffle of Aluminum, but to Banks, Pure Gold
By DAVID KOCIENIEWSKIRegulators have allowed banks to buy companies that trade in commodities, resulting in huge profits for the banks and billions in higher costs for consumers. ]
Any Federal Reserve executive could have argued against this policy, but to my knowledge no executive including Janet Yellen so much as discussed the policy publicly.
Yellen last spoke about commodity prices in April 2011. She did not specifically address that policy.
http://www.federalreserve.gov/newsevents/speech/yellen20110411a.htm
Darryl FKA Ron -> beezer...Nice Adam Smith quote. Smith has a bunch of these sprinkled throughout the Wealth of Nations. Conservatives, of course, don't remember them very often.
That was a great Adam Smith quote. I got me interested WoN, where I had not been before. Sounds like Smith would have disagreed with Schumpeter on consolidating firms into monopoly rent seeking behemoths.
pgl:
Bloix:It could be worse. Had Romney won last year - the discussion would be whether it would be Glenn Hubbard or John Taylor.
kharris:"It could be worse." The motto of the Obama administration.
don:This is at least in part an outgrowth of the Republican war on women. If women voters had anywhere else to go, snubbing a well qualified woman for an arguably less well qualified guy would be stupid politics. As it is, the White House can turn its thoughts to political considerations other than women's votes in making this choice. In this way, the Republican war on women may succeed, producing a major casualty.
Bloix -> don...Summers is arrogant and unlikable, but he is intellectually head and shoulders above Yellen. If things get really, really bad, I would much rather see him at the helm.
Yes, Summers makes brilliant mistakes. And he's so fast, he makes more of them than anyone else.
pgl -> Bloix...
Is this like the George W. Bush line "I get things done". Bush did get things done - very bad things (e.g., Iraq).
pgl -> don...
Summers - the thinking man's version of Paul Volcker. Volcker was arrogant and unlikeable as well. But some think Volcker was the best FED chair ever. I happen to disagree with them but ...
The Blorch -> pgl...
But... this idiot nominates me. He doesn't like me, he thinks I'm arrogant and he disagrees with me.
Mark A. Sadowski -> don...
mrrunangun -> don..."...but he is intellectually head and shoulders above Yellen."
WTF?!?
"Janet L. Yellen
.........
This author is among the top 5% authors according to these criteria:
1.Average Rank Score
2.Number of Works
3.Number of Distinct Works
4.Number of Distinct Works, Weighted by Simple Impact Factor
5.Number of Distinct Works, Weighted by Recursive Impact Factor
6.Number of Distinct Works, Weighted by Number of Authors
7.Number of Citations
8.Number of Citations, Discounted by Citation Age
9.Number of Citations, Weighted by Simple Impact Factor
10.Number of Citations, Weighted by Simple Impact Factor, Discounted by Citation Age
11.Number of Citations, Weighted by Recursive Impact Factor
12.Number of Citations, Weighted by Recursive Impact Factor, Discounted by Citation Age
13.Number of Citations, Weighted by Number of Authors
14.Number of Citations, Weighted by Number of Authors, Discounted by Citation Age
15.Number of Citations, Weighted by Number of Authors and Simple Impact Factors
16.Number of Citations, Weighted by Number of Authors and Simple Impact Factors, Discounted by Citation Age
17.Number of Citations, Weighted by Number of Authors and Recursive Impact Factors
18.Number of Citations, Weighted by Number of Authors and Recursive Impact Factors, Discounted by Citation Age
19.h-index
20.Number of Registered Citing Authors
21.Number of Registered Citing Authors, Weighted by Rank (Max. 1 per Author)
22.Number of Journal Pages
23.Number of Journal Pages, Weighted by Simple Impact Factor
24.Number of Journal Pages, Weighted by Recursive Impact Factor
25.Number of Journal Pages, Weighted by Number of Authors and Simple Impact Factors
26.Number of Journal Pages, Weighted by Number of Authors and Recursive Impact Factors
27.Number of Abstract Views in RePEc Services over the past 12 months
28.Number of Downloads through RePEc Services over the past 12 months
29.Number of Abstract Views in RePEc Services over the past 12 months, Weighted by Number of Authors
30.Number of Downloads through RePEc Services over the past 12 months, Weighted by Number of Authors
31.Breadth of citations across fields
32.Wu-Index "http://ideas.repec.org/e/pye21.html
Yellen has made the following substantive contributions to the field of monetary policy economics just in the past few years entirely apart from her many publications connected with the Federal Reserve:
- http://ideas.repec.org/h/hoo/bookch/4-13.html
- http://ideas.repec.org/a/pal/buseco/v46y2011i1p3-12.html
- http://ideas.repec.org/a/bpj/bejeap/v9y2009i3n3.html
Summers' last major contribution to the field of monetary economics was a research paper he coauthored with three other people nearly 20 years ago:
http://ideas.repec.org/a/eee/crcspp/v39y1993ip95-140.html
Yellen has delivered the following important speeches on monetary policy just in the past year:
- http://www.federalreserve.gov/newsevents/speech/yellen20130602a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20130416a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20130404a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20130302a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20130211a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20130104a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20121113a.htm
- http://www.federalreserve.gov/newsevents/speech/yellen20121011a.htm
Remember all the articles Summers wrote and the speeches he delivered in the past few years on monetary policy?
(Crickets chirping.)
Neither do I.
About the only thing I can find is this feeble grunting of a Reuters article which is over a year old:
http://blogs.reuters.com/lawrencesummers/2012/06/03/breaking-the-negative-feedback-loop/
In that column Summers says low interest rates mean easy money, so what's the point of doing more, which is a freshman type mistake in macroeconomics.
Peter K.:The outcomes of Dean Summers's policy recommendations, taken as a body of work, are among the best available illustrations of the fact that intelligence and wisdom are not at all the same thing. In a policy making position, intelligence without wisdom is seldom a formula for successful policy outcomes. David Halberstam wrote a good book or two on the subject.
Arrogance and pomposity linked to intelligence and debating skill can silence your opponents, but cannot make poor policy succeed.
don -> Peter K....@don above, nonsense. Trollery. No evidence.
The Extremely Effective Leak Campaign Against Larry Summers
By Matthew Yglesias | Posted Wednesday, July 24, 2013,I don't know whether Janet Yellen or Larry Summers will be the next Federal Reserve Chair, but I do know that Yellen's advocates (or Summers' enemies) inside the process have played things very cleverly over the past 24 hours. As of Sunday evening, I think all of Washington went to bed with the sense that Yellen was the prohibitive favorite and also that people were not particularly interested in this story.
But then yesterday afternoon someone put it out to Ezra Klein that things had changed and Summers had suddenly become the overwhelming favorite. Wording it that strongly is important, because that becomes news in a way that "actually Larry is still under consideration" would not. And putting it out there in the press in that way is really bad for Summers' chances of getting the job. After all, lots of people hate Larry Summers! Once "everyone tell the world how you feel about Larry Summers" becomes a legitimate topic, it turns out people don't feel good about him. David Dayen makes the financial reformers' case against Summers. Amanda Marcotte makes the feminist case against him. Noam Schieber says he has "dangerous blind spots" while Felix Salmon says a Summers pick would be "enormously disappointing on many levels." But not only does Summers have lots of liberal critics, conservatives don't like him either.
None of that means Summers won't get the gig, of course. Appointing Summers director of the National Economic Council cost Obama good will with liberals while gaining him none with conservatives, so he might well do it again with the Federal Reserve. But putting the Summers story out there strongly got the full-throated denunciations written while still giving Obama ample opportunity to back down and just make it look like these "Summers is the guy" stories were erroneous. The White House political people now get a full view of the fact that while Summers' former speechwriter Ed Luce thinks he's the best person for the job, few others feel that way. Personally, my view is that these criticisms of Summers are overstated and he'd do a fine job. But I also don't see any reason to think he'd do a better job than Yellen, and the idea of taking all this heat for the sake of Summers seems very odd to me. Clearly one major goal of the leaking is to clarify the extent to which that's the case-and it's been succeeding.
UPDATE: Kevin Drum gives Summers the thumbs down and Cardiff Garcia makes the case for Yellen. Matthew Klein at Bloomberg doesn't like Summers. All of which is to say the leaker is very effectively making the point that the media reaction to picking Summers will be bad.
------------------------------------How much does the White House care about the media reaction?
Mark A. Sadowski -> don...@don above, nonsense. Trollery. No evidence.
I suppose if you discount entirely the academic quality of their published works. (If you are unable to evaluate them yourself, there are plenty of rankings of academic economists available.)
don -> Mark A. Sadowski..."If you are unable to evaluate them yourself, there are plenty of rankings of academic economists available."
Out of 36,491 registered authors in economics Summers ranks 25, Romer 603 and Yellen 805.
http://ideas.repec.org/top/top.person.all.html
Personally I don't think there's that much difference between being in the top 2% or being in the top 0.1% in economics.
More importantly I think a ranking in monetary economics would be far more relevant and on that basis Summers wouldn't even come close to making the top 10%.
Mark A. Sadowski -> don...Thanks for the above. My own ranking is slightly above 3,000 in that service, but the intellectual power of the works of the two authors seems clear to me. I have no particular liking for Larry, or dislike for Janet - there is simply a difference in depth.
Mark A. Sadowski -> Mark A. Sadowski..."I have no particular liking for Larry, or dislike for Janet - there is simply a difference in depth."
Please be specific. Which of Summers' *monetary* economics works (preferably recent) displays this depth of which you speak?
Personally, having immersed myself in the monetary economics literature, including the works of both Romer and Yellen, the idea of a Summers' candidacy came as a complete shock.
Mark A. Sadowski -> Mark A. Sadowski...Here, let me give you an example of something relatively recent. This was published in 2006 and has been cited 48 times. I personally consider it a must read in monetary economics.
http://www4.fe.uc.pt/jasa/m_i_2010_2011/stabilizationpolicyreconsideration.pdf
Janet L. Yellen & George A. Akerlof, 2006. "Stabilization Policy: A Reconsideration," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 1-22, January.
Introduction:
"In 1936 Keynes's General Theory explained how fiscal and monetary policy could be used to end depressions. Since that time no developed country has ever seen a downturn on the scale of the 1930s. The General Theory was not just a how-to book on the avoidance of depressions. It was an argument for stabilization policy itself.The years since The General Theory have seen a revolt against Keynesian economics. In a revisionist mode, Milton Friedman argued that countercyclical policy cannot affect the average level of unemployment and output. Robert Lucas and Thomas Sargent (1979) went further, contending that it is not only impossible to increase average output; it is also impossible to stabilize it. More recently, Lucas (1987, 2003) has argued that policies to stabilize output, even if effective, would yield negligible welfare gains. Thus, stabilization policy should not be a macroeconomic priority.
Lucas's conclusion notwithstanding, stabilization policy has long been an explicit or implicit objective of monetary policy in most industrial countries, even including those countries with inflation targets. The volatility of output has, in fact, declined in most major industrial countries since the mid-1980s, and monetary policy arguably deserves at least partial credit.1 Mirroring practice, monetary policy research commonly takes it as "given" that, along with price stability, stabilization policy-the minimization of squared deviations of output around potential-is an appropriate policy objective.2 In this paper we explore the economic rationale for stabilization as a policy goal, concluding that it does, in fact, deserve high policy priority. We survey a large body of literature that critiques the validity of key assumptions in Lucas's argument. We also offer suggestive evidence that stabilization policy can significantly reduce average levels of unemployment by providing stimulus to demand in circumstances where unemployment is high but underutilization of labor and capital does little to lower inflation. A monetary policy that vigorously fights high unemployment should, however, also be complemented by a policy that equally vigorously fights inflation when it rises above a modest target level. The Federal Reserve Act thus wisely enunciated price stability and maximum employment as twin goals for monetary policy."
Now, let me show you what is probably her most important work in monetary economics. This was published in 1985 and has been cited 936 times.
http://isites.harvard.edu/fs/docs/icb.topic500592.files/akerlof%20yellen.pdf
Janet L. Yellen & George A. Akerlof, 1985. "A Near-rational Model of the Business Cycle, with Wage and Price Intertia", The Quarterly Journal of Economics, vol. 100, pages 823-838, Supplement
Abstract:
"This paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects. The individual loss to agents with inertial price-wage behavior is second-order in terms of the parameter describing the shock, while the effect on real economic variables is first-order. Thus, significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses."
anne -> Mark A. Sadowski...
Mark A. Sadowski -> anne...When possible, do suggest an application of the work in the paper. I am thinking this through as well.
Rational-expectations models frequently fail to fit key facts, but backward-looking models are subject to the Lucas critique. That is, while backward-looking models may fit the behavior of variables in the current monetary regime, expectations are likely to change if monetary policy changes. "Near-rational" expectations assumes agents reduce the costs of gathering and processing information by using only a limited set of information to forecast future variables.
Laurence Ball specifically cited Yellen and Akerlof (1985) in the following paper that shows that near-rational expectations actually fits the inflation data for both 1879-1914 and post-1960 better than either rational expectations or backward-looking models:
http://www.nber.org/papers/w7988
Near-Rationality and Inflation in Two Monetary Regimes
Laurence Ball
October 2000Abstract:
"Sticky-price models with rational expectations fail to capture the inertia in U.S. inflation. Models with backward-looking expectations capture current inflation behavior, but are unlikely to fit other monetary regimes. This paper seeks to overcome these problems with a near-rational model of expectations. In the model, agents make univariate forecasts of inflation: they use information on past inflation optimally, but they ignore other variables. The paper tests sticky-price models with near-rational expectations for two periods in U.S. history, the post-1960 period of persistent inflation and the period from 1879 to 1914, when inflation was not persistent. The models fit the data for both periods; in contrast, both rational-expectations and backward-looking models fail for at least one period."Dan Kervick:
Peter K. -> Dan Kervick...Garcia says
"...Some of the mistakes of his past, such as his role in deregulating derivatives (the Brooksley Born episode) or the Harvard interest rate blowup, don't really tell us much about his capacity to guide macroeconomic stabilisation policy."
Although Garcia comes down for Yellen, his comment here is a frequently made point. Could I suggest that this perspective shows some tunnel vision about the current fixation on unconventional stabilization policy and completely ignores a huge part of the Fed's job.
Probably the most important thing the Fed will do during the next chair's tenure is carry through the Dodd-Frank implementation. The Fed's role in that implementation is vast and decisive: implementation and supervision of capital requirements, more stringent requirements for systemically significant institutions, large bank resolvability, stress testing, the Volcker Rule, derivatives push-out, shadow bank regulation.
Look at what popped up this week: the Fed is responsible for the rules under which Goldman Sachs has been running its aluminum warehousing scheme.
If the Fed chair is a softie on regulation - and that appears to be Summers's track record - then all of the potential here for structural reform favoring stability and security will be watered down and lost. So Summers's record on Brooksley Born and related issues is 100% relevant to what the next Fed chair will be called on to do.
Dan Kervick -> Dan Kervick...It's Time For Politicians To Stop Pretending Monetary Policy Doesn't Exist
By Matthew Yglesias | Posted Wednesday, July 24, 2013
The two big economic policy stories of the day are the president's speech on his vision for long-term economic prosperity and the president's decision about who he'll nominate to replace Ben Bernanke to run the Federal Reserve. Predictably-but very oddly-Obama didn't mention this decision at all in his speech.
Which is strange because it's not as if it's irrelevant. Obama clearly indicated an aspiration to accelerate the pace of job growth and takled about "new rules on big banks." Lots of elements of the government outside the Federal Reserve play a role in regulating banks, but the Fed is a major bank regulator. Lots of things that happen in public policy are relevant to job creation, but the Federal Reserve is the lead agency in macroeconomic stabilization. I don't expect politicians to dwell on monetary policy issues on a day-to-day basis, since on a day-to-day basis it's outside of their hands. But Elizabeth Duke's resignation from the Board of Governors creates a vacancy Obama needs to fill. Ben Bernanke is going to need to be replaced. And there's talk that Sarah Bloom Raskin is going to move to the Treasury Department as Deputy Secretary which would create another vacancy on the board. So there's a real question here worthy of presidential attention.
The official story as to why you don't hear about monetary policy from the president is that the Federal Reserve is supposed to be independent.
But no matter how strongly you believe in central bank independence, I don't think this really adds up. The Supreme Court is very much independent of the White House or of Congress. But that doesn't mean elected officials don't talk about Supreme Court cases or say things about their approach to judicial issues. On the contrary, it's pretty broadly recognized that the ability to appoint Supreme Court justices and shape the trajectory of the judicial branch is one of the president's most important powers. The Fed Chairman is one of the most powerful people on the planet, and Obama's going to nominate someone to fill the role. When he's giving big picture talks about his economic philosophy, he ought to say something about that.
------------And yet Dan gets mad when people discus the Fed and monetary policy. He insults bloggers and commenters who focus on monetary policy as being "neoliberal" and hating the common man.
So when I hear that Summers "has the confidence of the markets", an alarm bell goes off. It might mean that the markets expect Summers to go easy on the regulations.
kharris:
lark:Now let's not forget that Churchill was a serial flopper until his "finest hour". He got a bunch of people needlessly killed in his early military days. He was a complete disaster in his financial efforts. This abilities as a politician landed him a job when he had been able to learn from enormous failures.
I've tended to think of Geithner as potentially benefiting from Churchillian luck - inherit a disaster and show your stuff - but that hasn't really prove out. Summers has had more than one chance at disaster management and has had mixed results at best, but maybe he's better for the experience. Heck, it's only our national economy, why not experiment around a bit and see if Summers actually does have "the stuff"?
Eric Blair:Selection of Summers would show how little the Obama administration values labor and employment more generally. In that respect he is a true neoliberal with elite interests at heart.
bob mcmanus:Matthew Yglesias believes that this is part of a campaign to discredit Summers by highlighting just how widely he is disliked:
http://www.salon.com/2013/07/24/sexist_larry_summers_will_destroy_the_economy/singleton/
Summers has been around, if not instrumental, in the last three economic disasters.
A bad economy going into the 2016 election is the plan.
|
|
|
Jul 18, 2013 | Bloomberg
President Obama has only a few months to pick a candidate to replace Ben Bernanke as chairman of the Federal Reserve, and while the betting website Paddy Power has Fed Vice Chair Janet Yellen leading the pack at 1:4 odds, Larry Summers remains a strong contender at 11:2.
Despite an impressive resume that includes stints as Treasury Secretary and chief economist of the World Bank, there is a very good reason Summers shouldn't be in charge of monetary policy: He seems to have trouble with interest rates.
During the financial crisis, Harvard lost nearly $1 billion because of some unusual and ill-judged interest rate swaps that Summers implemented in the early 2000s during his troubled tenure as the university's president.
Interest rate swaps allow borrowers to lock in a fixed interest rate on floating-rate debt, which can be good to hedge against short-term uncertainty. The problem with Harvard was that Summers wanted to lock in interest rates for money that the university hadn't actually borrowed and wasn't planning on borrowing for a very long time.
There aren't a lot of ways to interpret this exotic instrument except as a bet that the future level of interest rates would be higher than the market pricing implied at the time. That bet was wrong, and Harvard lost a billion dollars. Anonymous finance blogger Epicurean Dealmaker puts it well:
"I have rarely encountered a corporate client who feels confident enough about both their absolute funding needs and current and impending market conditions to enter into a forward swap starting more than nine months into the future. Entering into a forward start swap for debt you do not intend to issue up to 20 years in the future sounds like either rank hubris or free money for Wall Street swap desks."
Why, back in 2004, did Summers feel so confident that interest rates were going to be much higher than they actually were? Reuters blogger Felix Salmon found one clue in a speech Summers gave in October of that year. Among other he things, Summers warned of the dangers created by the U.S. current account deficit and highlighted the seemingly absurd fact that short-term borrowing costs were lower than the rate of inflation. Perhaps Summers's experience with foreign-exchange crises in Asia and Latin America convinced him that something similar could happen in a country that borrowed in its own currency.
Not only was Summers wrong in 2004 about where interest rates would be -- he was willing to bet a lot of other people's money that he knew better than everyone else. The damage at Harvard was bad enough. Imagine what that sort of thing could do to the U.S. economy.
About Matthew C Klein
Matthew C. Klein writes for Bloomberg View about the economy and financial markets. He previously wrote for the Economist magazine and for its economics blog, Free Exchange.
|
|
|
Please let this blog and the accompanying video serve as an antidote to the idea Summers for Fed chair is a good idea. Or, more specifically, a reminder about how this "brilliant" man has been wrong, so often, on so many major issues. For example:
- Bank Deregulation: A protégé of Bob Rubin's, Summers helped spearhead the deregulation movement of the 1990s, featuring the repeal of Glass-Steagall in 1999. (Shortly thereafter, Rubin left Treasury to join Citigroup, the biggest beneficiary of that legislation.)
- Derivatives Reform: Summers was among the "wise men" of Washington who helped torpedo Brooksley Born's efforts to regulate over-the-counter derivatives in the late 1990s, as detailed in The Frontline documentary The Warning.
- Crisis Management: When the 'Asian Flu' hit in 1997, Summers was among the U.S. experts urging Asian countries to break up the banks, punish shareholders and generally take a hard line. In 2008, his advice to President Obama – who reportedly wanted to break up Citigroup – was much more industry friendly. (Could it be that Summers, who made millions at DE Shaw and from speeches after leaving government service, learned the lesson from Rubin and didn't want to bite the hands that would soon feed him?)
- Alan Greenspan: At Greenspan's final Jackson Hole confab in 2005, Summers famously – and aggressively – denounced Greenspan's critics as "Luddites." As the 2008 crisis clearly proved, critics like Raghu Rajan were absolutely right about the risks in the system and Summers was absolutely wrong about the benefits of "financial innovation" that he – and Greenspan – so proudly supported.
Ironically, Summers looks a lot like Alan Greenspan: another economist who blinded politicians with his much-ballyhooed "brilliance" and yet was pretty much wrong at every major step of the way.
"In short, Summers' record as an economic adviser has provided a trail of disasters that few can match," the CEPR wrote in 2012. "Does it make sense to give him yet another opportunity to do even more damage?"
At that time, Summers was reportedly in the running to lead the World Bank; as Fed chairman, his opportunities to do "even more damage" would be orders of magnitude larger. The fact that financial markets and the banking sector would welcome Summers as Fed Chair should give the rest of us pause, not comfort.
Memo to President Obama: Just say 'no' to the idea of Summers as Fed chair.
jack
Summers was right in there with Rubin and Greenspan years ago rewriting the laws that allow banks to speculate with capital other than their own. He was instrumental in getting Glass-Stegal repealed.....which led to the 2008 bank crash.
Summers not smart enough, or too available to bank lobbyists, to make the best decisions for the US money & banking sector.
summers is famous for not getting along with people......USA does not need a greedy bully making the country's monetary and banking decisions.....
Yellen
Jimmie
Larry Summers is a Slick Willie Worm.
Shelby
This is the guy that pushed congress to repeal "Glass-Steagal"
Tommy
A $1 billion mistake Larry Summers Put Harvard Near Bankruptcy, that's why Summers may be selected.
Appletree
"In short, Summers' record as an economic adviser has provided a trail of disasters that few can match," Pretty much par for the course these days....
nonamespecified
I can't believe Obama really would want Summers. If that is true, he has got to be the most naive and worst judge of character of any president in history.
|
|
|
October 3, 2010 | The Chronicle of Higher Education
The Obama administration recently announced that Larry Summers is resigning as director of the National Economic Council and will return to Harvard early next year. His imminent departure raises several questions: Who will replace him? What will he do next? But more important, it's a chance to consider the hugely damaging conflicts of interest of the senior academic economists who move among universities, government, and banking.
Summers is unquestionably brilliant, as all who have dealt with him, including myself, quickly realize. And yet rarely has one individual embodied so much of what is wrong with economics, with academe, and indeed with the American economy. For the past two years, I have immersed myself in those worlds in order to make a film, Inside Job, that takes a sweeping look at the financial crisis. And I found Summers everywhere I turned.
Consider: As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.
After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department-where he championed the law that made Citigroup's creation legal-became both vice chairman of Citigroup and a powerful member of Harvard's governing board.
Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency. During this time, Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)
Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a "full-blown financial crisis" and a "catastrophic meltdown."
When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a "Luddite," dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.)
Soon after that, Summers lost his job as president of Harvard after suggesting that women might be innately inferior to men at scientific work. In another part of the same speech, he had used laissez-faire economic theory to argue that discrimination was unlikely to be a major cause of women's underrepresentation in either science or business. After all, he argued, if discrimination existed, then others, seeking a competitive advantage, would have access to a superior work force, causing those who discriminate to fail in the marketplace. It appeared that Summers had denied even the possibility of decades, indeed centuries, of racial, gender, and other discrimination in America and other societies. After the resulting outcry forced him to resign, Summers remained at Harvard as a faculty member, and he accelerated his financial-sector activities, receiving $135,000 for one speech at Goldman Sachs.
Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations-quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.
Summers is unique but not alone. By now we are all familiar with the role of lobbying and campaign contributions, and with the revolving door between industry and government. What few Americans realize is that the revolving door is now a three-way intersection. Summers's career is the result of an extraordinary and underappreciated scandal in American society: the convergence of academic economics, Wall Street, and political power.
Starting in the 1980s, and heavily influenced by laissez-faire economics, the United States began deregulating financial services. Shortly thereafter, America began to experience financial crises for the first time since the Great Depression. The first one arose from the savings-and-loan and junk-bond scandals of the 1980s; then came the dot-com bubble of the late 1990s, the Asian financial crisis; the collapse of Long Term Capital Management, in 1998; Enron; and then the housing bubble, which led to the global financial crisis. Yet through the entire period, the U.S. financial sector grew larger, more powerful, and enormously more profitable. By 2006, financial services accounted for 40 percent of total American corporate profits. In large part, this was because the financial sector was corrupting the political system. But it was also subverting economics.
Over the past 30 years, the economics profession-in economics departments, and in business, public policy, and law schools-has become so compromised by conflicts of interest that it now functions almost as a support group for financial services and other industries whose profits depend heavily on government policy. The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money.
Related Content
Selected Skeptical Comments
judithryan43 - October 04, 2010 at 10:19 amAlthough there was a vote of no confidence in Summers' presidency at Harvard after he made the remarks about women, that was not what forced him to resign. His resignation came a year later, when faculty members became concerned about quite different issues--notably the Andrei Shleifer case--and a second vote of no confidence was scheduled (it did not take place because Summers resigned).
The Shleifer case is pertinent to the column above, because it has to do with money and ethics. Harvard University paid a huge sum of money to settle the lawsuit that the government had brought against Shleifer for his misconduct as a consultant in Russia. I believe that Shleifer paid a fine of $2 million out of his own pocket, while Harvard paid something like $26 million to settle the case.
rburns - October 04, 2010 at 11:00 am
I will be interested to observe the notice that is given to the documentary by the media that is so in love with the current government. I saw Mr. Feguson on Morning Joe today and though he did a great job of outlining the facets of Summers' shifty career and of the crimes of the bankers, he was more or less ignored--very little interest on the part of the "show's" cast. Summers and the others involved in these scandals have too much government and Wall Street clout at this moment to be easy to expose or at least for that exposure to get the attention it deserves. The media will pass over this with its usual easy style and focus on Washington's and Wall Street's importance to the rest of us--especially with the midterm elections so near. Perhaps with more bipartisan power in Congress we will see some of these issues examined in the open. We live in hope.
pdhazard - October 04, 2010 at 12:13 pm
The corruption of Academe is a disgrace. Fat cat economics will institutionalize peonage among most of our teachers, and contribute to the disappearance of the middle class that FDR's initiatives made possible. Reagan's fatuous commitment to make American safe for billionaries is a stupid, contemptible way to run an egalitarian democracy.Patrick D. Hazard, Weimar,Germany.
cosmopolite - October 04, 2010 at 12:14 pm
I have been very puzzled by the Obama administration's reluctance to engage the regulatory and institutional flaws that led to the 2007-08 financial sector meltdown. This article explains why; Obama's economic advisers are happy hookers.
We should all be suspicious of the public policy advice of any academic economist who retires with a net worth in 8 or more digits.
@heathertwo: I can confirm that my students seldom read the texts I assign.
@judithryan: I knew that Shleifer had been convicted of one charge in Federal court. I did not know that that conviction had not been overturned on appeal and that he had paid an ample fine. I am fascinated to read you say that Harvard paid $26M to settle its liability in the case. Shleifer and Summers were good friends, and Summers supported his friend throughout this scandal. That was ample reason for Summers to resign.
@recoveringmba: You wrote: "What we need is minimal regulation that puts the burden of losses on those that stand to benefit if things go well. What we have now is a corporate-government state with private benefits and socialized losses."
The current recession is the resulted from gross mismanagement and excessive optimism in the British and American mortgage businesses. Industry executives thought that because homeownership is a sacred cow, and because the subprime mortgages facilitated homeownership, the government would backstop losses if anything went wrong. When Lehman Brothers was allowed to fail, everybody suddenly realized that this expetation would not be realized, and the world financial system fell out of bed. We are still recovering from the broken bones.
trendisnotdestiny - October 04, 2010 at 12:24 pm
Yves Smith has an in-depth discussion in the book Econned (covering much of the rise of the economist class; determined to legitmate entrepreneurial analysis through mathematical prediction, however many of these models do not account for the psycho-social elements of human decision making in a complex and evolving culture....
Also, Dan Ariely discussed this in a more nuanced way (separating our economic and social selves in a culture looking to exploit the differentials of culture, class and practical economic decision-making...
Great Piece here, will see the movie also!
|
|
|
November 29, 2008
The appointment of Lawrence Summers as Barack Obama's top economic adviser may herald a U.S. version of the loans-for-shares fraud that financially pillaged Russia, leaving in its wake a politically powerful oligarchy.
Shielded by the credibility of a Harvard advisory team handpicked by Summers, Moscow saw a mid-1990s credit crisis used to shift the ownership of state-owned assets to a handful of Russians. At the time, Summers was serving as Under Secretary for International Affairs, the U.S. Treasury's senior financial diplomat.
When the government of Boris Yeltsin ran low on cash, advisers urged that funds be borrowed from oligarch-controlled banks. As collateral, Moscow pledged shares in state-owned oil companies, the crown jewels of the Russian economy.
When the loans defaulted, the shares were sold to those same oligarchs in rigged auctions. Portrayed as "privatization" by Summers and Harvard's accommodating advisers, Russians called it simply "mafia-ization." Mikhail Gorbachev estimates that the oligarchs stripped $1 trillion from Russia's struggling economy. With an Ashkenazi population of less than two percent, six of Russia's seven richest oligarchs qualified for Israeli citizenship.
Summers succeeded Robert Rubin as Treasury Secretary in 1999, marking their success in repealing Depression-era laws that banned the merger of banks, brokers, insurance firms and investment banks. A former co-chairman of Goldman Sachs, Rubin joined CEO Sanford Weill at Citigroup, the first financial institution to fully embrace the Rubin-led repeal.
At Rubin's urging, Citi thrived by bundling loans as securities (mortgages, credit card loans, auto loans, student loans, etc.) and selling them as collateralized debt obligations ("CDOs"). Meanwhile Summers championed the deregulation of financial derivatives, ensuring the globalization of losses from those securities. With "assets" of $2 trillion (largely troubled loans) and operations in 100 countries, Citi is now "too big to fail."
Rubin protégés advised Obama that taxpayers should assume responsibility for $306 billion of Citi's junk loans–$1,000 per American. Treasury's bailout funds will cover $5 billion and $10 billion will be paid by the Federal Deposit Insurance Corporation (funded by banks). Additional losses will be paid by the Federal Reserve printing money as needed–with all that implies for inflation and stagnation. Summers is the leading candidate to succeed Fed chairman Ben Bernanke in 2010.
Obama picked Tim Geithner as Treasury Secretary. A protégé of Henry Kissinger and then of Rubin and Summers, Geithner and Summers often vacation together. Known to wilt in the presence of Summers' notorious arrogance, Geithner will oversee bank shares given the government in return for the bailout.
In this funds-for-shares program, what happens if, as in Russia, the funds prove insufficient? If America's debt-laden economy continues its decline, does government become the owner? If not, to whom will those shares be sold?
Look to private equity firms adept at acquiring companies with little cash and lots of debt. Is that the political role being played by former Republican National Committee chairman Ken Mehlman? Mehlman serves as chairman of public affairs for Kohlberg Kravis & Roberts, the nation's leading leveraged buyout firm.
Americans have long shared a healthy aversion to concentrations of financial power. Was Mehlman hired to facilitate the bank consolidation we now see emerging? The Comptroller of the Currency announced in August that private equity firms could become banks–and acquire other banks. The bank bailout covers leveraged corporate loans, clearing their books to fund more leveraged buyouts.
If, as appears likely, today's vast pyramids of debt continue to collapse, into whose hands will control of the financial sector shift? With banking already consolidated in four major institutions–each too big to fail–the American counterpart to the Russian oligarchs could be the senior partners in private equity firms: Kohlberg, Kravis and Roberts plus Stephen Schwarzman at Blackstone Group, David Bonderman at Texas Pacific Group, David Rubenstein at Carlyle Group and Leon Black at Apollo Group.
In Russia, state-owned assets shifted into a few private hands–in response to a credit crisis–when advisers urged that Moscow assume debts it could not repay. Those assets were then sold for cents on the dollar. In America, banks may well migrate into the hands of a few private equity firms, leaving in their wake a trail of socialized debts as junk loans are upgraded to gilt-edged bonds backed by the full faith and credit of the U.S.–undermining the nation's credit standing worldwide.
As in Russia, both the advisers and the new owners qualify for Israeli citizenship. Summers had a hand in both bailouts. As President-elect Obama scrambles to stabilize the financial system, will his pledge of clarity and transparency include an account of how–and by whom–he was advised to capitalize a transnational Ashkenazi oligarchy?
|
|
|
He's back. Larry Summers is running hard to succeed Ben Bernanke as chairman of the Federal Reserve when Bernanke's term expires in early 2014.
This is not a great idea, for three main reasons.
The first is Summers' famous temperament. The problem is not just that he's less than sensitive to women. It's that he's a bully in general, cocksure of himself, using others as foils and prevailing by controlling the agenda.
Through several turns in a career marked by falling upwards, Summers' chief patron and sponsor, Robert Rubin, keeps assuring people that "Larry has changed." And Larry keeps not changing. It was the bullying more than the disrespect towards women that finally got him fired as president of Harvard.
Justice Oliver Wendell Holmes, Jr. famously said of Franklin Roosevelt, "a second-rate intellect but a first rate-temperament." Summers, with a towering intellect, is the reverse.
Interestingly, Ben Bernanke has remade the Federal Reserve into the most collegial body in its history. He has assigned individual governors to specialize in subject areas. He consults with his colleagues and encourages deliberation and consensus.
Alan Greenspan, by contrast, was a despot. The senior staff reported to him. Other governors were often out of the loop. There were deliberations on the Federal Open Market Committee, which sets monetary policy, but Greenspan ruled the roost and did the necessary horse-trading to make sure he had the votes. A Summers Fed would be Greenspan on steroids.
Under Bernanke, the regional Fed presidents have also been encouraged to speak their minds. William Dudley, president of the New York Fed, has pushed hard for more mortgage relief, influencing Bernanke's own thinking. It was the president of the Chicago Fed, Charles Evans, who ultimately persuaded Bernanke and other governors that the central bank should target a lower unemployment rate rather than obsess about non-existent inflation-thus fulfilling the long-established but long-ignored mandate of the Humphrey Hawkins Full Employment Act of 1978.
My reporting suggests that members of the Fed's Board of Governors and regional Fed presidents, who are thriving under Bernanke's leadership, would be appalled to have him succeeded by the dictatorial Summers. If it were cricket for Fed officials to testify against a nomination, several would.
The other logical candidate, fittingly enough, would be the first woman chair of the Federal Reserve Board. Janet Yellen, the current Fed deputy chair, is a widely respected economist, very much a part of the Bernanke team, and an outspoken advocate of more measures to strengthen job growth and the recovery. Previously, she was president of the San Francisco Fed Bank and chair of the Council of Economic Advisers under Clinton. The Council often functioned as a counter-point to the Rubin-Summers axis at the Treasury.
The second reason why Summers would be a poor choice to lead the Fed is that his advice as Obama's top economic policymaker was too conservative and often behind the curve. He was very much in the camp that wanted to prop up the big banks rather than clean them out and break them up. His view of the appropriate scale of stimulus spending was too low.
Bernanke, at the time, was pretty much in that camp, too. But Bernanke has shown a stunning capacity for growth, and is now the most important advocate of stronger recovery measures in Washington.
I have no idea whether Bernanke wants to step down as Fed chair and return to Princeton. If he wants to stay, President Obama should surely reappoint him. If Bernanke is up for a change, I suggested in a previous column that Obama should move Bernanke over to Treasury Secretary and move Janet Yellen up to Fed Chair.
There's a third good reason not to appoint Summers. It would represent the continuation of the Rubin dynasty into yet another era.
Robert Rubin, a fundraiser and adviser to senior Democrats since he persuaded Walter Mondale to run on an austerity platform in 1984, is the man who brought us the deregulation, the speculation, and the conflicts of interest that crashed the economy. Yet one Rubin protégé after another continues to occupy top levels of government in a reform administration.
Jack Lew, White House Chief of Staff, was a Rubinista. Michael Froman, who holds the top economic policy job at the National Security Council, was Rubin's assistant and later a managing director at Citi. Likewise Gene Sperling, who holds the job Rubin once held as head of the National Economic Council. Jason Furman, deputy director of the National Economic Council, ran Rubin's Hamilton Project. Tim Geithner, the Treasury Secretary, was Rubin's man. Obama's former head of OMB and Rubin's longtime ally, Peter Orszag, is now-where else-at Citi. And Larry Summers is Rubin protégé numero uno.
Enough!
Interestingly too, the very best people serving in economic posts in the current administration are those who did not get their jobs through the good offices of Robert Rubin. Bernanke was originally a Bush appointee-yet he is now to the left of most of the Rubin crowd. Former FDIC Chair Sheila Bair, the scourge of the Geithner Treasury and the Wall Street barons, was also a Republican. The current independent-minded chair of the FDIC, Martin Gruenberg, was Sen. Paul Sarbanes' chief of staff. Even Gruenberg's Deputy, Republican Thomas Hoeing, former president of the Kansas City Fed, is tougher on Wall Street than the Rubin bunch.
In fairness, there are some recovering Rubin people who have turned into tough and principled regulators, such as Gary Gensler, chair of the Commodity Futures Trading Commission. But they are the exception.
Summers made one previous run at the chairmanship of the Fed in mid-2009. But Obama, with the financial crisis still raging and Bernanke seen as a calming presence, chose to reappoint Bernanke.
Larry Summers has a very nice gig as Charles W. Eliot Professor at Harvard. He makes some money on the side via Wall Street connections. He could do a huge public service by staying put.
|
|
|
Google Groups
The modern power elites thrive by forgetting any regrettable past. This amnesia is easy at Harvard, where the legal fiduciaries operate in secret and need not answer for their acts. They are the antipodes of the selfless institutional servants who built Harvard and other great American enterprises, and they bear close watching. (Harry R. Lewis Larry Summers, Robert Rubin Will The Harvard Shadow Elite Bankrupt The University And The Country)Perhaps their worst crimes have been committed against their students who are indoctrinated rather than taught. In the middle of the 19th century, Mayer Amschel Bauer Rothschild prophetically said "The few who understand the system, will either be so interested from it's profits or so dependent on it's favors, that there will be no opposition from that class."
|
|
|
April 26, 2007 | Antiwar.com
Communism wounded Russia, grievously, almost irreparably – and Yeltsinism delivered the death blow. The legacy of Boris Yeltsin, who presided over what Paul Klebnikov described as "one of the most corrupt regimes in history," is, quite literally, the death agony of the Russian nation. As David Satter pointed out in the Wall Street Journal:
"Between 1992 and 1994, the rise in the death rate in Russia was so dramatic that Western demographers did not believe the figures. The toll from murder, suicide, heart attacks and accidents gave Russia the death rate of a country at war; Western and Russian demographers now agree that between 1992 and 2000, the number of "surplus deaths" in Russia–deaths that cannot be explained on the basis of previous trends–was between five and six million persons."
The Yeltsin era was marked by a precipitous fall in living standards, but some prospered. Given privileged access to "privatized" state property, the clique around Yeltsin amassed fantastic wealth. The one who perhaps profited the most was Boris Berezovsky, whose methods were described by Klebnikov:
"Using his access to the highest officials of the Russian government and his reputation as a close friend of the Yeltsin family, Berezovsky hammered away at the privatization projects that would put key state industries in his grasp."
Yeltsin's clique, which included his daughter, was known as "the Family" – not as in "family values," or the Partridge Family, but as in the Russian equivalent of The Sopranos. The rule of the commissars had been succeeded by the reign of the gangsters, criminal elements who seized control of the national economy and engineered a complete takeover of the state apparatus, not for any ideological motive or ostensibly "patriotic" purpose, but simply to enrich themselves. Their strategy made use of the "shock therapy" approach to privatizing the economy as advocated by Harvard professor Jeffrey Sachs. The process was set up to favor Yeltsin's courtiers, who paid rock-bottom prices in a rigged auction. The industrial base of the Russian economy was sold off for a song: the whole process amounted to a spree of looting such as hadn't been seen since the sack of Rome.
Yeltsin didn't seem to notice, which is hardly surprising, since he was drunk for most of his tenure in office. And in Yeltsin's Russia, vodka was the only commodity that was cheap and plentiful. If this was an effort to calm the roiling currents of post-Soviet politics and anesthetize the populace while the oligarchs made off with the nation's assets, it didn't entirely accomplish that goal. There was an anti-Yeltsin upsurge in 1993, and the Duma threatened to impeach the Russian president: in response, Yeltsin declared the parliament dissolved and sent in his tanks to take the building, which was ringed by tens of thousands of anti-Yeltsin demonstrators.
This is the guy who is now being hailed as a great democrat and admirable leader by the Clintons, two of the old crook's biggest enablers. Bill Clinton and his cronies funneled billions in American "aid" to Yeltsin 's kleptocracy, most of which disappeared down a rabbit hole and eventually wound up in the oligarchs' foreign bank accounts.
Putin is routinely blamed for the Chechen war, yet this too is part of the Yeltsin legacy. It was Yeltsin who started that war, invading Chechnya in 1994 to protect the interests of certain criminal gangs in Moscow and other major Russian cities, who had a falling out with their Chechen brethren in the homeland. Describing the group around Yeltsin who pushed for war, Gen. Aleksandr Lebed bitterly declared: "This is not the party of war. This is the party of business."
Having consolidated its hold on power, the Yeltsin clique, with Berezovsky's funding and support, proceeded to divvy up the spoils, including cementing their domination of the "private" media. Organized crime networks replaced the state security services as centers of power, with Berezovsky and his fellow oligarchs at the apex of it all. Using strong-arm tactics and engaging in not a few assassinations, the oligarchs – Berezovsky, Mikhail Khodorkovsky, Vladimir Gusinsky, and Leonid Nevzlin, among others – drove rival gangs out of business and established their economic and political supremacy.
The oligarchy decimated the economy, demoralized the Russian people, and dissolved the rule of law in the acid of corruption and criminality. Is it any wonder that Yeltsin's death is hardly being mourned in Russia? I would venture a guess that more than a few cups are being raised to his demise.
Understanding the Yeltsin legacy and its catastrophic effect on Russia is key to grasping the Putin phenomenon. Although the former KGB officer who rose from obscurity to become the most formidable Russian leader since Peter the Great owes his present job to Yeltsin, the Yeltsin clique didn't fare so well at the hands of their fallen leaders' designated successor. Putin turned against "the Family" and drove most of the oligarchs out of power and into exile, where they are even now scheming to make a comeback. The ersatz "privatizations" arranged under the previous regime were overturned, to a large extent, and the "entrepreneurs" of the Russian Mafia were reined in, if not eliminated entirely, to the point where they no longer threatened the state's monopoly on coercion. The reintegration of formerly state-controlled assets into the "private-public" arrangements mapped out by the Putin administration is widely seen in the West as evidence that Russia is "backsliding." Similarly, the takeover of major mass-media outlets by pro-Putin businessmen is cited as proof that Putin represents a new "authoritarianism." Yet all that has happened is the passing of power from the oligarchs to the latter-day czarists of Putin's United Russia party.
Gregory Yavlinsky, the liberal parliamentary leader, had this to say about Yeltsin's regime:
"The government that was formed was without any clear ideology. It was neither red, nor white, nor green. It was based solely on personal greed. You got a system that was corporatist, oligarchic, and based on monopolized property rights and semi-criminal relationships."
With the oligarchic and semi-criminal elements purged by Putin, what remains is the corporatist structure, which is now in different hands. Railing at the Russian president from their posh places of exile in Londongrad, Switzerland, and the French Riviera, the oligarchs' indictment of Putin boils down to one principal complaint: they are no longer in power.
Flush with cash, and intent on revenge, exiled oligarchs such as Berezovsky pour their money into phony "human rights" front groups that regularly denounce Russia's "reversion" to authoritarianism. Some, like Andrew Illarionov of the Cato Institute, go so far as to accuse Russia of launching a military bid to regain its lost empire and advise the West to "consider itself in a new Cold War-like era."
The goal of this rather motley crew is to restore Yeltsinism without Yeltsin, but the oligarchs and assorted "dissenters" – ranging from Eduard Limonov and his National Bolsheviks to Illarionov and chess-champion-turned-politician Gary Kasparov – have little support outside the editorial offices of Western newspapers and U.S. government agencies engaged in "democracy promotion." The "color revolutions" that occurred in former Soviet satellites such as Ukraine and Kyrgyzstan have faded to black, and Putin's popularity in Russia has so far foiled the oligarchs' attempts to subvert the country from within. Berezovsky has to content himself with calling for the violent overthrow of the Russian government from his palatial London headquarters, hoping that the professional regime-changers in Washington and London will lend a sympathetic ear and, perhaps, some material support.
In the meantime, however, with the ill-gotten gains of several oligarchs stashed in Swiss bank accounts and sloshing around Londongrad and Washington, there are plenty of think-tank presidents who wouldn't mind getting a cut of that particular action. Expect the propaganda assault on Putin's Russia to get more vociferous and the drumbeat to "do something" about the rising "threat" of Russia to get louder and more serious.
Yeltsin's legacy to Russia – poverty, privation, and a renewed adversarial stance by the West – is the "gift" that just keeps on giving.
... ... ...
|
|
|
Economist's View
The highlight of the first evening's proceedings was a conversation between Harvard's Larry Summers, till recently President Obama's chief economic advisor, and Martin Wolf of the Financial Times. Much of the conversation centered on Mr. Summers's assessments of how useful economic research had been in recent years. .... Mr Summers was ... measured, refusing to be drawn into making blanket statements for the sake of being controversial. (He's tried that and found it doesn't always go down well, he quipped. Later, he added that he was "one of the few people who went to Washington to get away from politics".) But in its own way, his assessment of recent academic research in macroeconomics was pretty scathing.
For instance, he talked about all the research papers that he got sent while he was in Washington. He had a fairly clear categorization for which ones were likely to be useful: read virtually all the ones that used the words leverage, liquidity, and deflation, he said, and virtually none that used the words optimizing, choice-theoretic or neoclassical (presumably in the titles or abstracts). His broader point-reinforced by his mentions of the knowledge contained in the writings of Bagehot, Minsky, Kindleberger, and Eichengreen-was, I think, that while it would be wrong to say economics or economists had nothing useful to say about the crisis, much of what was the most useful was not necessarily the most recent, or even the most mainstream. Economists knew a great deal, he said, but they had also forgotten a great deal and been distracted by a lot.OhNoNotAgain -> beezer...
cm -> OhNoNotAgain...Exactly. And, even when there is hyperbole, it's in the right direction (towards the truth).
The field of economics is so bizarre to someone like myself in the field of software development. Software development, as a profession, has long ago accepted the fact that human beings are doing the development and, subsequently, there will, be bugs and design issues. Therefore, much of the last 20 years has been spent on improving quality through automated testing and build systems that systematically verify software before it is released.
Economics seems to be too intertwined with money and politics and is too easily hijacked for other purposes, moving it completely away from being systematically verifiable. To use the software analogy, it would be like the large and fictional "software maintenance developers' association" encouraging bugs in software in order to swell their ranks, with the parallel decline in the public opinion of the entire software development profession in general.
Paine:"it would be like the large and fictional "software maintenance developers' association" encouraging bugs in software in order to swell their ranks"
You don't say. It is more likely that a different force is at work, at least in corporate software groups - the "bug trackers, process architects, and program managers guild" that derives its employment from having to manage a steady stream of various "issues". Where I have some insight, it seems a number of your "maintenance developers" are trying to join *that* guild instead.
Some genius some where on the blogs apropos the lacunae in the contemporary main stream Theortical paradigm said [that] in the long run everything becomes part of the neoclassical canon
But we live in a series of short runs
The copernuicus Ptolemy observation
Ought to suggest to all of us just how penetrating and concentrating Lary's evil mind can be. Went to Washington to escape politics. The man can fly circlers around say Paul krugman or Joe stgilitz. He reminds me of Oppenheimer. I'd put him in charge of any poli Econ manhattan project if I could trust the filthy bastard
Robert Waldmann
Great minds think alike. Especially if they are quoting each other without giving credit. I strongly doubt the claim that the Ptolomaic model outperformed the Copernican model. A model of simple circular orbits around the Sun is almost exact (the orbits of visible planets are barely eccentric at all). Copernicus's model (which definitely had more epicycles than Ptolomy's) outperforms the simple circles model
Whether a Ptolomaic model outperformed Copernicus's model, that possibility was mentioned (as a guess not a claim of fact) by N Gregory Mankiw roughly 25 years ago.
Of course, Prof. Mankiw wasn't discussing DSGE. He was discussing the rational expectations revolution prominently featuring the Lucas supply function. By a very odd coincidence, the Lucas supply function is about to turn 50 (it was presented by Muth in 1961). Oddly, it doesn't seem to be more useful for forecasting than the IS-LM model just yet.
The logic appears to be that something must be a revolutionary advance, because it gives worse predictions than preceding models. It will not be possible to find an example from the history of science as it actually happened.
Of course, Summers has no respect for DSGE models. He was just adding Ballance http://bit.ly/eiy9po . This is the man who once told me (and I quote)
"You know my view. In the history of economic theory, the day in which they came up with the idea of the utility function wasn't an especially good day."
He also once said
"Real analysis. Isn't that mostly about the difference between less than and less than or equal to ?"
Kievite:
I am not sure that actual result of Larry Summers both academic and political can be viewed positively.
His activity with the current administration was part of selling the house to financial oligarchy practiced by Obama administration. In general Obama administration record is a real shame if we compare it with Roosevelt administration handing of the crises. And Larry was a part of the problem not a part of the solution.
And I think Paine is naive to see him superior to Paul Krugman and, especially, to Joe Stiglitz. In a way Larry meteoritic rise was the story of nepotism. In a mandarinate that sure is US economic profession that's a tremendous help for any person in climbing to the top. Neither Krugman nor Stiglitz has had those boosters attached. Also Stiglitz was always an independent thinker. Krugman is more corrupt and stands somewhere in between Summers and Stiglitz.
His activities with Harvard endowment characterize him as in certain way, no matter how we interpret them. His role in economic rape of Russia and subsequent defense of criminal behavior of Andrei Shleifer also characterize him in certain way. His role in Brooksley Born's affair is shameful. He really acted as a hired killer. His stint in hedge fund D. E. Shaw also characterize him in a certain way.
All those mentioned activites suggest that he is not an academic, he is a corrupt political hack within the academy, typical Harvard Mafiosi, and always was. What appeals to him is not the progress of science but money and personal power. And economic is just a tool for achieving this power. No more no less...
I see him no less corrupt then Mankiw.
|
|
|
Naked capitalism
Q: Is it really plausible that economists threaten top banks that in the absence of some kind of payoff, they will change the theories they teach in a direction that is less favorable to the banks?
A: There are certainly cases in history of the following sequence:
a. Economist E espouses views that are less favorable to certain special interest groups S. Doing so threatens the ability of S to extract rent from the public.
b. Later, E changes his view, thereby withdrawing the prior threat.
c. Still later, E is paid large amounts of money by representatives of S in exchange for services that do not appear particularly onerous.For example, let E = Larry Summers and let S = the financial services industry. In 1989 E was (a) a supporter of the Tobin tax, which threatened to reduce the rent extracted by S. This threat was apparently later withdrawn (b), and in 2008 E was paid $5.2 million (c) in exchange for working at the hedge fund D. E. Shaw (an element of S) for one day a week.
However, it is naturally more difficult to witness the negotiations in which specific threats were appeased with specific future payouts. This is a problem that also bedevils Public Choice theory, in which it is likewise difficult to show exactly how a particular politician is remunerated in exchange for threatening businesses with anti-business legislation. The theory assures us that such negotiations occur, although they are difficult to observe directly. Perhaps further theoretical advances will help us to close this gap.
Q: Isn't it offensive to assume that economists, for motives of personal gain, shade their theoretical allegiances in the directions preferred by powerful interest groups?
A: How could it ever be offensive to assume that a person acts rationally in pursuit of maximizing his or her own utility? I'm afraid I don't understand this question.
|
|
|
Jan 10, 2011
"So here is the evidence for an American plutocracy of a narrow and discrete but hardly harmless sort. Wall Street seduced the economics profession not through overt corruption, but by aligning the incentives of economists with its own. It was very easy for academic economists to move from universities to central banks to hedge funds - a tightly knit world in which everyone shared the same views about the self-regulating and beneficial effects of open capital markets. The alliance was enormously profitable for everyone: The academics got big consulting fees, and Wall Street got legitimacy. And it has kept the system going despite the enormous policy failures it has generated, not to exclude the recent crisis."
-Francis Fukuyama, The American Interest, January 2011Larry Summers' path to the Obama administration, and his record within it, are symptomatic of a new American plutocracy, and his new job at Harvard will keep the gears of corruption greased.
Summers rose to power under the protective wing of Wall Street and Democratic Party mogul Robert Rubin. He aggressively advanced Rubin's program of financial deregulation and faithfully rescued his cronies when deregulation went wrong. Despite the economic catastrophes these policies have contributed to, Summers and other Rubinites have continued their political ascendancy in recent years, filling top positions in the Obama administration.
Obama's economic program, developed almost entirely by Rubin's proteges, has received widespread popular condemnation for bailing out Wall Street while leaving Main Street out in the cold. Summers has become a defining symbol of the latest sold-out administration within a sold-out system of government. His departure from the White House is more a reflection of this public anger than a personal career choice.
But strategic sensitivity is not change. Summers' exit does not significantly diminish Rubin's shadow over the White House, nor does it mark an end or pause in the vicious cycle of today's crony capitalism. Obama has replaced Summers with a less notorious Rubinite, and the Harvard research center Summers will now direct provides a name-brand intellectual cover for, not an alternative to, the dangerously insular politics his career has thus far embodied.
The Road to Obama is Paved with Rubin
"A relatively senior figure on Wall Street said to me years ago that many of the most important business relationships he had were with the people he met through his other activities. He had found that his business and non-business lives fed each other to the benefit of both."
-Robert Rubin, Harvard Business School Commencement, 2000Summers' arrogant personal style is known to be politically toxic, so he's been fortunate to have Robert Rubin as a guardian angel easing his way to political stardom. Rubin is what you might call a Wall Street godfather. He joined Goldman Sachs in 1966 and rose to co-CEO and then co-chairman before joining the Clinton administration in 1993 as the first ever director of the National Economic Council, the same position Summers is leaving from now. Summers, a lower level Treasury official at the time, had already endeared himself to Rubin in the 80s, consulting to Goldman Sachs and then working with Rubin on the Dukakis campaign. When Rubin rose to Secretary of the Treasury in 1995, Summers became his deputy.
While running Treasury over the next six years, the two, along with Federal Reserve Chairman Alan Greenspan, were chiefly responsible for the neoliberal economic reforms that allowed banks to market and trade derivatives without oversight or transparency, combine in dangerous ways, take excessive risks, and recover losses when big loans to companies and foreign governments went sour. During the Asian Financial Crisis of 1997-1998, Time Magazine famously labeled the three "The Committee To Save he World", which is now a running joke because financial deregulation allowed big banks to almost destroy the world ten years later.
When Rubin left Treasury in 1999 to become Chairman of the Executive Committee of Citigroup, he persuaded President Clinton to name Summers as his replacement. Citigroup was a new banking conglomerate made possible by laws Rubin and Summers supported and implemented at Treasury, and it paid Rubin over $100 million in the next ten years.
Another new business model Rubin and Summers made possible was Enron. Rubin had known Enron well through Goldman Sachs's financing of the company, and recused himself from matters relating to Enron in his first year on the Clinton team. He and Summers went on to craft policies at Treasury that were essential to Enron's lucrative energy trading business, and they were in touch with Enron executives and lobbyists all the while. Enron meanwhile won $2.4 billion in foreign development deals from Clinton's Export-Import Bank, then run by Kenneth Brody, a former protege of Rubin's at Goldman Sachs.
Soon after Rubin joined Citigroup, its investment banking division picked up Enron as a client, and Citigroup went on to become Enron's largest creditor, loaning almost $1 billion to the company. As revelations of massive accounting fraud and market manipulation emerged over the next years and threatened to bring down the energy company, Rubin and Summers intervened. While Enron's rigged electricity prices in California were causing unprecedented blackouts, Summers urged Governor Gray Davis to avoid criticizing Enron and recommended further deregulatory measures. Rubin was an official advisor to Gov. Davis on energy market issues at the time, while Citigroup was heavily invested in Enron's fraudulent California business, and he too likely put pressure on the Governor to lay off Enron. Rubin also pulled strings at Bush's Treasury Department in late 2001, calling a former employee to see if Treasury could ask the major rating agencies not to downgrade Enron, and Rubin also lobbied the rating agencies directly. (In all likelihood he made similar attempts in behalf of Citigroup during the recent financial crisis.) Their efforts ultimately failed, Enron went bust, thousands of jobs and pensions were destroyed, and its top executives went to jail. It's hard to believe, but there was some white-collar justice back then.
Over the years Rubin's connections and financial experience had made him an influential figure at Harvard, his alma mater. He helped oversee Harvard's endowment before joining Treasury and had been a key fundraising link to big donors on Wall Street and in the Democratic Party. When Clinton's second term ended in 2001, Rubin lobbied to get Summers the job of Harvard president, and then joined Summers on Harvard's governing board the next year.
Summers' presidency at Harvard was plagued with scandals, including some that didn't come to light until years after he left, including his decision to invest a large part of Harvard's endowment in risky interest rate swaps that ultimately lost the school more than a billion dollars. While his personal admonishment of professor Cornel West for recording a rap album made headlines, Summers quietly consulted with a hedge fund founded by Rubin proteges Brody (see above) and Frank Brosens, and after being forced out of Harvard in 2006 he began touring Wall Street more frequently, and made $5 million a year working one day per week at hedge fund D.E. Shaw.
Summers also starting showing up around the Hamilton Project, which Rubin had just founded with hedge fund manager Roger Altman. Altman was another Clinton official who had come from Wall Street, following billionaire Peter Peterson from Lehman Brothers to Blackstone Group, and he left Washington to found a major hedge fund in 1996. The Hamilton Project is housed in the Brookings Institution, a prestigious corporate-funded policy discussion center that serves as a sort of staging ground for Democratic elites in transition between government, academic, and business positions. The Hamilton Project would go on to host, more specifically, past and future Democratic Party officials friendly to the financial industry, and to produce a stream of similarly minded policy papers. Then-Senator Obama was the featured political speaker at Hamilton's inaugural event in April 2006.
Summers joined major banking and political elites on Hamilton's Advisory Council and appeared at many Hamilton events. During a discussion of the financial crisis in 2008, Summers was asked about his role in repealing Glass-Stegall, the law that forbade commercial and investment banking mergers like Citigroup. "I think it was the right thing to do," he responded, noting that the repeal of Glass-Stegall made possible a wave of similar mergers during the recent financial crisis, such as Bank of America's takeover of Merrill Lynch. He was arguing, in effect, that financial deregulation did not cause the financial crisis, it actually solved it. "We need a regulatory system as modern as the markets," said Summers - quoting Rubin, who was in the room. "We need a hen house as modern as the food chain," said the fox.
A year after co-founding the Hamilton Project, Rubin was named Co-Chairman of the Council on Foreign Relations (CFR), another policy discussion group as prestigious as Brookings but bipartisan and internationally focused, replacing CFR chair Peter Peterson and cementing Rubin's dominance in the top echelon of policy elites. Rubin's son Jamie, became a major Wall Street fundraiser for Obama during these years - Wall Street was Obama's biggest source of early cash - and although Rubin tepidly endorsed Hillary Clinton in 2007, many of Rubin's proteges, including Summers, became top advisors to Obama's presidential campaign and later to his administration. Rubin continued to hold a top position at Citigroup up until the bank almost went bust from its subprime mortgage investments but was saved by a government bailout engineered by the Bush administration and candidates Obama and McCain in September 2008. Michael Froman, a close friend and advisor to Obama who had worked as Rubin's chief of staff for many years, was also a top executive at Citigroup at the time of the bailout.
Better than the Great Depression
"An awful lot of thoughtful people think … if you project out twenty years … the period that we're in right now is going to look like the deterioration of the American economy, both in absolute terms and relative to other parts of the world."
-Robert Rubin, The Politics of Message, 1989Summers, Froman, and other Rubinites from the Clinton team - including Tim Geithner, Gene Sperling, Jason Furman, Neal Wolin, Jack Lew, and Gary Gensler - reunited in the Obama administration, as countless writers have documented in detail. Other Obama officials from outside Rubin's network also came from Wall Street. Together, and in collaboration with their contacts in the private sector, they crafted an economic recovery plan that quickly restored financial profits through backdoor bailouts, and eventually corporate profits more generally, but failed to remedy the jobs and housing meltdown:
2008 2010 Bank profits 128 billion 367 billion* Corporate profits 1.25 trillion 1.66 trillion* Underemployed people
21 million 25.7 million Foreclosures since 2009 - 3.4 million * annualized from Q3 2010 As Obama's top economic advisor, Summers was responsible for much of it, and he became iconic of a White House that made frequent populist odes to change but rehired all the old Wall Street cronies and operated by Wall Street's "out of touch" logic from day one. That defenders have been forced to measure Summers' success against the Great Depression is indicative of his unpopularity as well as the administration's tone deafness to the deepening economic insecurity of the middle class, much of which is experiencing a depression.
In a bigger sense, the decades-long dance of Rubin and Summers in and out of Washington has become emblematic of a second Gilded Age that wouldn't even measure well against the first one from a century ago. Much of the public has come to view the Obama Administration as the latest round in a quickening game of musical chairs, played by the same old politicians who owe their fortunes or their careers to the same financial institutions that destroyed the economy, each round further consolidating their unaccountable power, each round bringing fresh disillusionment.
Words like "plutocracy", "oligarchy", "kleptocracy", and even "banana republic" are quickly gaining traction in political discourse. The Fukuyama quote at the top of this article comes from a new issue of The American Interest Magazine devoted to the question, "Are Plutocrats Drowning Our Republic?", and here's a small sampling of other recent ones:
"Millions of Americans have awakened to a sobering reality: they live in a plutocracy, where they are disposable." (Bill Moyers)
"Government has been disabled or captured by the formidable powers of private enterprise and concentrated wealth." (William Greider)
"America has been busy 'building a bridge to the 19th century' - that is, to a new Gilded Age." (Frank Rich)
"Never before has the United States looked so much like a country of the rich, by the rich, and for the rich." (Andy Kroll)
"What kind of a country do we aspire to be? Would we really want to be the kind of plutocracy where the richest 1 percent possesses more net worth than the bottom 90 percent? Oops! That's already us." (Nicholas Kristof)
Elites still speak seriously about "public service", but fewer people buy it. As big business feeds more top executives into government positions, floods elections with more money, and gets away with more costly and egregious crimes, it's easy to see that public interest is being replaced by private profit as the driving force in politics. This process is a vicious cycle, since the effects it produces - concentrated wealth and political power - are also its causes.
Society's Most Challenging Problems
"The great research universities of America are a tremendous economic resource for the country."
-Robert Rubin, June 4, 2008Trillion-dollar back scratching at the intersection of business and government has become one of the most widely recognized and resented problems in modern politics. You might think, then, that a Harvard research center founded to "advance the state of knowledge and policy analysis concerning some of society's most challenging problems at the interface of the public and private sectors" would place priority on restoring some accountability to American democracy. You might think that Summers' move to such a center would mark a turn away from the influence of money towards the integrity of critical research and debate.
Think again. Private profit is undermining the legitimacy of academic institutions as well, and recent studies of conflicts of interest and disclosure in the economics profession have demonstrated how pervasive the quiet flow of money in the academy can be. Summers is still highly respected as an academic in the mainstream, even though he has earned millions from speaking and consulting to banks in recent years. That's partly because Summers, like most economists, doesn't disclose potential conflicts when he publishes economic articles or opinion pieces. Of course, he has an incentive not to: his Wall Street ties, milked in private, are good for power and money, but threaten his public reputation as an intellectual and public servant. What's incredible is that many leading economists, who spend their days thinking about the mechanics of incentives and self-interest, don't even seem to know what a conflict of interest is. Charles Ferguson's excellent documentary, Inside Job, illustrates this phenomenon in interviews with top economists at Columbia and Harvard who served in the White House and Federal Reserve. Ferguson's talk with Glenn Hubbard, Bush's first NEC director and architect of the Bush tax cuts, is particularly revealing:
FERGUSON: Do you think that the economics discipline has, uh, a conflict of interest problem?
HUBBARD: I'm not sure I know what you mean.
FERGUSON: Do you think that a significant fraction of the economics discipline, a number of economists, have financial conflicts of interests that in some way might call into question or color –
HUBBARD: Oh, I see what you're saying. I doubt it. You know, most academic economists, uh, you know, aren't wealthy businesspeople.
…
FERGUSON: I'm looking at your resume now. It looks to me as if the majority of your outside activities are, uh, consulting and directorship arrangements with the financial services industry. Is that, would you not agree with that characterization?
HUBBARD: No, to my knowledge, I don't think my consulting clients are even on my CV, so –
FERGUSON: Uh, who are your consulting clients?
HUBBARD: I don't believe I have to discuss that with you.
FERGUSON: Okay. Uh, uh –
HUBBARD: Look, you have a few more minutes, and the interview is over.
…
FERGUSON: Do they include other financial services firms?
HUBBARD: Possibly.
FERGUSON: You don't remember?
HUBBARD: This isn't a deposition, sir. I was polite enough to give you time; foolishly, I now see. But you have three more minutes. Give it your best shot.
The faculty at the Mossavar-Rahmani Center for Business and Government (CBG), which Summers will now direct, probably wouldn't have better answers than Hubbard. The CBG is a part of the Harvard Kennedy School, a graduate school for government policy makers that houses policy research and discussion groups, much like Brookings and CFR. The Center was founded in 1982 and lengthened its name in 2005 when Bijan Mossavar-Rahmani, an oil man, and his wife Sharmin, a Goldman Sachs executive, gifted the Center $15 million.
Corporate cash pays for every program under the CBG. Bijan previously spent almost a decade as a top executive at Apache Corporation. Apache and its founder, Raymond Plank, are major donors to the Center's Consortium for Energy Policy Research (CEPR) at Harvard, funding its faculty chair, Professor William Hogan. CEPR itself, whose stated goal is "to address the grand challenge of the 21st century: to develop secure, safe, clean, and affordable sources of energy to power world economic growth for present and future generations while protecting the environment from the impacts of global climate change", is primarily funded by Shell Corporation.
Another program at the Center, the Corporate Social Responsibility Initiative, is sponsored by nefarious corporate abusers like Chevron, Coca-Cola, and Microsoft, as well as Walter Shorenstein, a recently deceased billionaire real estate developer and one of the biggest Democratic donors over the past half-century. The CSRI apparently sees nothing problematic in taking Coca-Cola money and producing polished reports about Coca-Cola's model social responsibility record in Africa while corporate watchdog Global Exchange has named Coca-Cola as a "most wanted" human rights violator, a leader in "the abuse of worker's rights, assassinations, water privatization, and worker discrimination." In Africa, "by regularly denying health insurance to employees and their families, Coca Cola has failed to help stop the spread of AIDS in Africa. The company is one of the continent's largest private employers, yet only partially covers expensive medicines, while not covering generic medicines at all." Chevron, another of the CSRI's original funders, is also on Global Exchange's most wanted list, "guilty of some of the worst environmental and human rights abuses in the world."
The Harvard Environmental Economics Program (HEEP) is similar. Primarily funded by Shell and Enel, Italy's privatized national energy company, as well as the Duke Energy fortune, the program lists a council of advisors full of executives from Duke Energy, ConocoPhillips, Enel, Energy Future Holdings, Lehman Brothers, Morgan Stanley, and Barclays. One advisor, William K Reilly, was EPA administrator under Bush, runs a private equity firm, sits on several energy company boards, and recently co-chaired the BP Oil Commission.
It should come as no surprise at this point that the Health Care Delivery Policy Program's sponsors included industry giants Aetna, Blue Cross Blue Shield, Merck, and Stryker.
How do these people defend such obvious conflicts of interest? The case of another CBG project, the Harvard Electricity Policy Group (HEPG), is instructive. HEPG is also chaired by CEPR's Professor Hogan, and is funded by dozens of energy companies with a good deal of common financial interest in electricity policy. Ten years ago HarvardWatch wrote about Harvard's role in promoting Enron-backed energy deregulation in its report, "Trading Truth", noting that Enron was a major contributor to HEPG while "much of the research agenda of the HEPG [centered] on deregulation of the electricity market" - the central component of Enron's fraudulent business model. Hogan authored numerous studies, sometimes in collaboration with a consulting group that received funding from Enron, arguing against market manipulation as a cause of the California Electricity Crisis, and against price caps as a solution, positions that were proven wrong but highly favorable to Enron. We now know from Enron emails that the company was moreover planning to take professor Hogan and others on an "energy deregulation road tour" across the country to persuade other states to adopt the California model.
In response to the HarvardWatch report, Hogan and HEPG's executive director argued in response that Enron was only one among many funders, that HEPG didn't take official positions on policy, that many of Hogan's conclusions about the California electricity market had contradicted Enron's. All of that is true, and that's why the Center's structure works. It's also why the Brookings Institution and CFR have emerged in recent decades as the government and media's favorite sources of new political solutions. Corporate-friendly proposals that arise organically from discussions between government and business elites brought together within old institutions funded by a long list of corporate and wealthy individual donors are much more politically viable than those coming directly from a bank lobbyist, an oil company, or a group closely affiliated with one. Corporations don't dictate specific views, they nurture hundreds of views within a safely constrained spectrum and run with what works best.
The conflicts of interest at CBG are pervasive, but not ubiquitous, so there are always counter-examples for Hogan to cite. Many events and research projects don't interest the companies funding them, and those that do are not always favorable. Current Senior Fellows include bankers from Goldman Sachs, Morgan Stanley, Lehman Brothers, Wells Fargo, and Salomon Brothers, but there are many others from academia, government, or elsewhere in the private sector. The Center has hosted dozens of events promoting obvious corporate talking points, as well as events with more diverse and critical views.
But how many of CBG's hundreds of faculty, fellows, or events have ever substantially undermined the interests of the Center's sponsors, and how many have advanced them? If a CBG program was mostly critical of a sponsor, would it stay funded? If the Center's sponsors created the same research center with the same faculty and staff outside of an academic institution, would it have the same credibility? Would CBG academics ever push for corporate social responsibility rules that would hurt Coca-Cola's bottom line?
Harvard, like any university, is always in search of money to add to and expand its programs. Its fundraising offices contantly reach out to wealthy alumni and their companies about possible donations and what they might fund. Harvard faculty, facing cutbacks and job insecurity, need resources and attention to defend and advance their careers, and are attracted to positions backed by a fresh flow of big money. Big business, on the other hand, is constantly looking for the most effective PR its charitable giving can buy and new ways to strengthen its influence over government policy. Meanwhile, currently serving politicians and their staff are especially receptive to policy reforms backed by their corporate friends and donors but credible to the public. Finally, elites entering and exiting government need transitional work, more prestigious education for their resumes, and opportunities to network and test new ideas in a competitive but collegial environment.
These four needs converge in the form of academic policy institutes like the Center for Business and Government. This system works well for Harvard, for its faculty, for corporate donors, and for government elites - so long as the influence of money remains obscured by the open nature of the institution. To the CBG and its architects, "society's most challenging problems at the interface of the public and private sectors" don't include corporate capture, which plagues the Center itself. The primary challenge for the CBG in the 21st century is rather to construct a benign intellectual cover for a new era of blatant crony capitalism, keeping the sleazy networks at the center of the corporate-government universe well lubricated but invisible to the public.
Larry Summers has his job cut out for him. He might want to keep his hedge fund work to one day per week.
|
|
|
zero hedge
William Black continues with his campaign to not only bring sanity and transparency to an administration wrapped in secrecy, legacy cover ups and fraud, but to finally do what had to be down two years ago: bring down the big banks, force a balance sheet restructuring at the TBTFs, and force a systemic reset which is the only thing that could bring the much promised "change for good" to this country. " Don't talk about doing the right thing -- do it -- and do it to a major contributor. Don't do it because it's a contributor, but because a bank that commits tens of thousands of frauds should immediately be placed in receivership." We once again hope that more people like Bill Black (if not he himself) will decide to run for president, and make the difficult choices necessary to begin the impossible task of truly fixing the mess this country finds itself in.
No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem, originally appearing in Huffington Post
I passed up the obvious title: "Heckuva Job Larry!" That was the moment of President Obama's appearance on The Daily Show with Jon Stewart that set all Americans cringing. Yes, he really said that Summers "did a heckuva job." The candidate that was gifted the opportunity to run against the legacy of one of the worst presidents in U.S. history has, as president, used Bush as his role model to continue many disastrous policies. It was strangely fitting that he would channel Bush's infamous praise ("Heckuva job Brownie") for the FEMA chief who failed New Orleans so badly in the hurricane.
President Obama understandably wishes to focus attention on the economic disaster he inherited from President Bush. But Jon Stewart's question to him, which led to the president's gaffe, correctly asked about the message that Summers' appointment sent about the administration's commitment to fundamental change.
Summers had financial red ink on his hands at the time he was appointed. He was Rubin's chief minion in the successful effort to defeat effective financial regulation and supervision. (Yes, the effort was bipartisan and the Republican leadership shares in the guilt.) Summers was not simply wrong, but also arrogant and brutal, in blocking effective regulation at the SEC and the Commodity Futures Trading Commission. Summers was made rich by Wall Street in one of those sordid consulting arrangements designed to buy influence and reward past and future favors.
President Obama's appointment of Summers as his chief economic advisor made the administration's overall response to the crisis predictable. (Robert Kuttner gives a detailed explanation of the policies that Rubin's protégés championed in his new book, A Presidency in Peril.) The response would follow the disastrous Japanese model that has harmed their economy and damaged their integrity. The dominant characteristics can be summarized quickly: (1) the government would act for the benefit of the largest financial firms and their CEOs, even when they directed massive frauds, by (2) engineering a cover up of the banks' losses and the CEO's misconduct; (3) the administration would use the fictional reports generated to conduct the cover up to declare victory (due to their brilliance); and (4) the same strategy would impair the recovery. (For more on the cover up, see here and here.)
The strategy was also an assault on integrity, the rule of law, and the core precepts of the Obama campaign for president. This is why we warned from the beginning that the cover up could enrage the nation and make him a one-term president.
********
President Obama on Wednesday night told Jon Stewart that the administration had resolved the crisis for a pittance -- vastly less than their measure of the costs of resolution in early 2009. He also claimed that the administration deserved credit for preventing a second Great Depression.
The first claim is too good to be true. Ask yourself the key analytical question: Does the administration claim that the crisis proved far worse or far better than its original estimates? Look at the administration's initial estimates about employment or its initial views about how deep the fall in housing values, and how quick their recovery, would be? The administration has repeatedly emphasized that the housing and employment crises are significantly worse than initially forecast. That means that their initial loss estimates should have proven significantly too low. The losses should be much greater than their initial estimates.
Losses on homes are not driven only by employment and housing values. Mortgage fraud causes dramatically greater losses. How much mortgage fraud did the administration initially estimate? That's almost a trick question, for the administration rarely uses the "F" word (fraud) and gave no evidence at the time of its initial estimates that they took into account fraud losses. Since the time of the administration's initial loss estimates it has become indisputable that fraud was endemic in liar's loans and that liar's loans were not simply enormous, but also far more common than was originally reported. We have discovered since the administration's initial loss estimates that it was common for the SDIs to lie about the liar's loans they originated, sold, and purchased. Fannie, Freddie, Lehman and many others falsely called their liar's loans "prime."
What else could affect losses on liar's loans and CDOs backed by liar's loans? The failure of the secondary market meant that sales of CDOs and packages of liar's loans had to be individually arranged. Has the secondary market in nonprime mortgages been restored since the administration's initial cost estimates? No. That is important because the administration initially claimed that the secondary market's collapse was a temporary liquidity problem. The administration anticipated that the secondary market would soon reemerge. It died more than three years ago. With any luck it will never be resurrected. Once more, the changes since the time of the initial loss estimate should have led to greater losses than the administration's initial estimate.
This leaves us with two analytical puzzles. First, since the administration's anti-regulators have spent nearly two years carefully not looking at the liar's loans and determining their true value and the true incidence of fraud, how is the administration estimating losses without the facts necessary to make estimates? Second, ignoring the first problem for the moment, what miracle made virtually all the losses disappear -- at virtually no cost to the public -- even though every aspect of the administration's initial loss estimates proved too optimistic? Logically, the losses should be far greater. For the administration's claim to have any merit they must have discovered the ultimate "silver bullet" that slays $2 trillion in losses. So what is it -- and how did it save $2 trillion? It certainly wasn't their brilliant negotiation of the TARP terms. Any commercial lender that provided such an unlimited guarantee would have cut a far better deal.
There was no silver bullet. The administration made the losses disappear the old-fashioned way -- with fictional accounting. I have already explained how the administration allowed the Chamber of Commerce, American Bankers Association, and the Fed to enlist the Congress to extort FASB to pervert the accounting rules so that most of the SDIs' losses disappeared. The Fed also took over a trillion dollars in toxic, largely fraudulent collateral -- and carefully avoided conducting due diligence to discover either the value or the fraud incidence of the collateral. In essence, the Fed took the toxic stuff off the balance sheets.
Creating fictional numbers and hiding losses at the Fed doesn't reduce losses. Unfortunately, it increases real losses. First, it leaves the looters in charge, lets them pay themselves enormous bonuses, and lets them cause greater losses. Recall George Akerlof's and Paul Romer's title -- Looting: the Economic Underworld of Bankruptcy for Profit. They showed that even without a bailout the fraudulent CEO could grow wealthy by destroying "his" bank. With a bailout -- and the Bush and Obama administration's de facto grant of impunity and an unlimited guarantee to the SDIs -- the CEOs can loot without it leading inevitably to bankruptcy. This has made banking an even more criminogenic environment for accounting control fraud and will cause recurrent, intensifying crises.
Second, accounting cover ups prevent markets from clearing. That prolongs the recession. Japan shows how severe this problem can become.
Third, integrity is important. I really shouldn't have to explain this. It depresses me that I have to argue that it is wrong to lie. Our democracy, our economy, our society, and our souls depend on restoring our integrity and the rule of law. Randy Wray and I have proposed a step that would demonstrate the president's complete repudiation of Summers' strategy and a return to the rule of law: Place Bank of America in receivership for its tens of billions of dollars in fraudulent loans and its multitude of foreclosure frauds. Don't talk about doing the right thing -- do it -- and do it to a major contributor. Don't do it because it's a contributor, but because a bank that commits tens of thousands of frauds should immediately be placed in receivership.
The president told Jon Stewart he was hamstrung by tradeoffs. He said he could not place an SDI in receivership because it could cause 100 banks to fail. Randy and I explained the absurdity of this claim in our two-part essay. Receiverships do not cause one hundred banks to fail. The receiver would continue the bank's operation and pay the checks. Why are 100 banks supposed to fail when their correspondent bank ties remain functional, the checks clear, and the ATMs work? This parade of horribles has never happened.
The administration claimed that it was vital that the Dodd-Frank bill provide it with receivership powers so that it could close a future Lehman without causing cascade failures. Now, the president tells us that he refused to follow the Prompt Corrective Action law and close insolvent SDIs because some official lied to him and told him that operating (not closing) a bank through a receivership would cause 100 banks to fail? That's why Obama has allowed the SDIs to operate with impunity and provided them with an unlimited federal guarantee? And he, a skilled lawyer, cannot see the contradiction in Treasury -- his Treasury -- claiming that the Dodd-Frank bill's grant of receivership powers would prevent such cascade failures?
h/t Mike
Dburn
I never thought I would say it, but we need more and better Lawyers.
erik
Courageous lawyers. Not more! We need someone who will stand up to this atrocity of fraud. We need more William Blacks in this world.
Obama might as well be Bush for god sake. What good is it to have a smart president when they make dumb decisions? Supporting Summers is just embarassing. Obama is either clueless or spineless.
We need an independent president.
NOTW777
so you think obama is smart in all 57 states?
knukles
What? He admits he's not so smart in the other 3?
Bob
We've got the lawyers. Unfortunately, the banks are working night and day to sucker homeowners into ill-advised refi's to head off a fatal mass Show Me The Note movement that would blow them and their criminal enterprise out of the water.
Why are we at ZH allowing this to happen?
Technichel :
Smart? I would recommend that you research his college days. That will cure your idea that he is smart. The only thing he is capable of is speaking with a teleprompter. That does not take brains.
Azannoth :
Jon Steward soft ball question did more harm to Obama's credibility than the accusations of his harshest critics
SheepDog-One:
Yep, when Jon Stewart gives his disaproval of Obama, you know its over.
Something very big is set to pop here, and its not going to be pretty at all.
Azannoth :
Any criticism that comes from the Republicans or Libertarians against Obama, he can just shrug off the Left won't listen, but when one of their own 'prists' asks a low ball question jokingly at that, and gets a 'Fuck the Little People' answer well, game over
Bob :
There's the so-called "left" represented by the sell-outs at moveon.org, and then there is the core "Progressive" constituency, which Barry has permanently lost.
It's over for Barry. He can only do the right thing for his remaining 2 years. Or not.
What a damning legacy for the first African-American President if he doesn't do a 180 now.
zaknick:
He's not a true black American. His family didn't suffer the depravity of slavery, Jim Crow or had his neighborhood turned into a war zone by the ethnic cleansing "war on drugs"
He's not dumb at all, just captured (probably even created) by the fascists. A true Manchurian candidate. To think my family and I voted for him ,worked our butts off making calls and volunteering.
Bastards.
Bob:
A black boy who grew up by the name of "Barry" in a white family headed by a grandmother who was a bank branch manager. In Hawaii.
Then he went to Harvard.
sodbuster:
If William Black isn't careful, he's liable to have a "sudden" massive, fatal coronary.
Obama a "skilled" lawyer? Liar, yes, lawyer, no.
Bob:
Black is clearly at peace with his fate, whatever it might be. Better to have died with integrity than to have lived forever in corruption.
Especially since living forever is not an option.
Turd Ferguson :
"Better to have died with integrity than to have lived forever in corruption."
+++++
theXman:
The "Change" candidate Obama turned out to be just another elitist who perpetuates our fraudulent economic model.
the rookie cynic:
What we needed was a reincarnation of "Old Hickory" Andrew Jackson. Speaking of the central bank of his day he said:
"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!
Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves."
What we got was "Ole' Pussy Willow" Obama.
Popo :
Obama's cluelessness was stunning. He actually made the case that things were much better than he thought they'd be. Excuse me Mr. Obama, but the entire world witnessed your administration underestimate the severity of this crisis at every turn.
We also heard you say that you didn't get elected to make "fat cat bankers" rich. Well... hello?
Obama is the worst kind of empty suit: Powerless and seemingly unaware of his failures and the dangers ahead.
And his defense of Summers will go down in history as an incredibly stupid move.
Azannoth:
That guy is Completey lost without a teleprompter
FEDbuster:
He has used his teleprompter in meetings with as few as five people, WTF?
luster :
http://www.acronymfinder.com/Statistics-on-Depository-Institutions-(FDIC)-(SDI).html
the rookie cynic:
I think this is Mr. Black's version of TBTF. He calls them Systemically Dangerous Institutions.
Ancona:
Obama has proved himself to be exactly the things he campaigned against. He has bestowed millions on the corruptocrats who bought him the White House, and done nothing to stem the systemic fraud and criminal actions of the bankers who put us here. In fact, he hired the most corrupt of them all to be in his cabinet, then hired forty five or so unconstitutional "czars", to further invade our lives.
Rather than bring transparency to the process, he has encouraged obfuscation and evasion. Rather than allow the American People to have a reasonable amount of time to read and try and understand the health care bill, it was rammed up our asses without so much as a week to read it over. None of our congress critters could have possibly read this monster, much less gained an understanding of what each of the provisions would do down the road [butterfly effect and bulldozer effect].
This man has lost all credibility in the eyes of the majority in this nation, and will fall hard in 2012.
Pat Hand
This man has lost all credibility in the eyes of the majority in this nation, and will fall hard in 2012.
But that's just not true. His approval rating this week is 49%. He's lost credibility with some of the nation (and never had any with Republicans to begin with) but the bulk of the middle & lower class still love him.
The "czar" thing is wingnuttery - Bush & Clinton all had about as many "czar"s. It's just a release point for anger, not a real issue
http://www.usfinancialpost.com/obamas-presidential-approval-rating-hits-...
nedwardkelly
Obama has proved himself to be exactly the things he campaigned against.
In other words, Obama is a politician. Just like those before him, just like those that will come after him.
lynnybee :
thank god someone is ripping LARRY SUMMERS apart -- now, can he also rip ROBERT RUBIN apart, too -- ROBERT RUBIN needs to flee to his castle somewhere out of the country & live happily with all the cash / bullion that he's got in his secret account. NEVER IN MY LIFE HAVE I SEEN SUCH AWFUL PEOPLE AS LARRY SUMMERS & ROBERT RUBIN. (+ Clinton ) .
I used to be scared, but, I am now hopeful that if we could get WILLIAM K. BLACK, DYLAN RATIGAN, KARL DENNINGER & MAX KEISER in a "dream team" we'll survive this mess .
put these s.o.b.'s in jail ....... for the greater good, please jail them .
John McCloy :
I still believe that the elites have information which they are using to control the "President" into acting precisely as they desire. One of these items is his alleged affair with Vera Baker which appeared for one day only in the middle of debates over financial reform/Fed Audit/Return of Glass-Steagall.
This story was trotted out for one day and one day only with accusations of a video potentially existing from a hotel during his time in the Senate. As soon as they ensured that the President would stay quiet on the Lincoln Amendment/Fed Audit/Glass Steagall they put it back in the box.
Whos owns the National Enquirer?
http://www.politico.com/blogs/bensmith/1007/The_Clintonite_who_owns_Nati...
Who attended the Bilderberg meetings in 2008,2009 & 2010? Same guy.
http://bilderberg2010.com/dolce-hotel-2010-location-sitges-spain/leaked-...
-Michelle- :
Vera Baker is a cover scandal for the real one. Search "Man Country" and hillbuzz.org. Or just click: http://hillbuzz.org/2010/04/30/leave-vera-baker-alone-she-did-not-have-a...
Gimp:
P.J. O'Rourke said it best on Bloomie yesterday - "We now have a smarty pants ivy leaguer as president who has no clue on how to be a president".
HOPEY CHANGEY THINGY
Psquared :
I wonder sometimes if Obama has been co-opted. Maybe he does not like the daily grunge of President because his hands are tied. On the campaign trail he can be his own man, but back in Washington he is under the thumb of the oligarchs.
Turd Ferguson:
Close. He's nothing but a puppet for the Soros-led global socialists. A useful idiot, as Lenin would say. "Discovered" just a short 10 years ago, walking the streets of southside Chicago as an "organizer". Quickly promoted through the state legislature to the US Senate. Now he's POTUS? Nope, he's nothing but a puppet receiving his daily talking points through his teleprompter.
What I fear is what happens when "they" decide he's no longer useful.
George Washington
If William Black is pointed Attorney General, then I will know that things are right in the world ...
bronzie :
"We once again hope that more people like Bill Black (if not he himself) will decide to run for president, and make the difficult choices necessary to begin the impossible task of truly fixing the mess this country finds itself in."
I remember thinking along these lines way back when Ross Perot was running for President - and here we are 18 years later and the only thing that has changed is that the criminals running this country have gotten even more brazen than they were then
Rick64:
William Black a true patriot. Uncorruptable.
Tarheel:
But...But..But Barry, the junior congressman from Chicago who didnt present a single bill and was better known as a community organizer, promised us that we would have transparency!?! He said we would be able to view a bill online 7 days before it was voted on!
SteveNYC:
Oh, when you said "tears Larry Summers apart" I though you meant literally.....I had my hopes up!!
Amsterdammer :
To post a tribute to your two
best financial detectives, Bill
Black and George Washington:
Foreclose on the Foreclosure Fraudsters, Part 1: Put Bank of America in Receivership
http://www.huffingtonpost.com/william-k-black/post_1115_b_772820.html
http://www.huffingtonpost.com/william-k-black/post_1115_b_772820.html
|
|
|
The Chronicle of Higher Education
The Obama administration recently announced that Larry Summers is resigning as director of the National Economic Council and will return to Harvard early next year. His imminent departure raises several questions: Who will replace him? What will he do next? But more important, it's a chance to consider the hugely damaging conflicts of interest of the senior academic economists who move among universities, government, and banking.
Summers is unquestionably brilliant, as all who have dealt with him, including myself, quickly realize. And yet rarely has one individual embodied so much of what is wrong with economics, with academe, and indeed with the American economy. For the past two years, I have immersed myself in those worlds in order to make a film, Inside Job, that takes a sweeping look at the financial crisis. And I found Summers everywhere I turned.
Consider: As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.
After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department-where he championed the law that made Citigroup's creation legal-became both vice chairman of Citigroup and a powerful member of Harvard's governing board.
Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency. During this time, Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)
Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a "full-blown financial crisis" and a "catastrophic meltdown."
When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a "Luddite," dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.)
Soon after that, Summers lost his job as president of Harvard after suggesting that women might be innately inferior to men at scientific work. In another part of the same speech, he had used laissez-faire economic theory to argue that discrimination was unlikely to be a major cause of women's underrepresentation in either science or business. After all, he argued, if discrimination existed, then others, seeking a competitive advantage, would have access to a superior work force, causing those who discriminate to fail in the marketplace. It appeared that Summers had denied even the possibility of decades, indeed centuries, of racial, gender, and other discrimination in America and other societies. After the resulting outcry forced him to resign, Summers remained at Harvard as a faculty member, and he accelerated his financial-sector activities, receiving $135,000 for one speech at Goldman Sachs.
Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations-quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.
Summers is unique but not alone. By now we are all familiar with the role of lobbying and campaign contributions, and with the revolving door between industry and government. What few Americans realize is that the revolving door is now a three-way intersection. Summers's career is the result of an extraordinary and underappreciated scandal in American society: the convergence of academic economics, Wall Street, and political power.
Starting in the 1980s, and heavily influenced by laissez-faire economics, the United States began deregulating financial services. Shortly thereafter, America began to experience financial crises for the first time since the Great Depression. The first one arose from the savings-and-loan and junk-bond scandals of the 1980s; then came the dot-com bubble of the late 1990s, the Asian financial crisis; the collapse of Long Term Capital Management, in 1998; Enron; and then the housing bubble, which led to the global financial crisis. Yet through the entire period, the U.S. financial sector grew larger, more powerful, and enormously more profitable. By 2006, financial services accounted for 40 percent of total American corporate profits. In large part, this was because the financial sector was corrupting the political system. But it was also subverting economics.
Over the past 30 years, the economics profession-in economics departments, and in business, public policy, and law schools-has become so compromised by conflicts of interest that it now functions almost as a support group for financial services and other industries whose profits depend heavily on government policy. The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money.
Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. This is now, literally, a billion-dollar industry. The Law and Economics Consulting Group, started 22 years ago by professors at the University of California at Berkeley (David Teece in the business school, Thomas Jorde in the law school, and the economists Richard Gilbert and Gordon Rausser), is now a $300-million publicly held company. Others specializing in the sale (or rental) of academic expertise include Competition Policy (now Compass Lexecon), started by Richard Gilbert and Daniel Rubinfeld, both of whom served as chief economist of the Justice Department's Antitrust Division in the Clinton administration; the Analysis Group; and Charles River Associates.
In my film you will see many famous economists looking very uncomfortable when confronted with their financial-sector activities; others appear only on archival video, because they declined to be interviewed. You'll hear from:
Martin Feldstein, a Harvard professor, a major architect of deregulation in the Reagan administration, president for 30 years of the National Bureau of Economic Research, and for 20 years on the boards of directors of both AIG, which paid him more than $6-million, and AIG Financial Products, whose derivatives deals destroyed the company. Feldstein has written several hundred papers, on many subjects; none of them address the dangers of unregulated financial derivatives or financial-industry compensation.
Glenn Hubbard, chairman of the Council of Economic Advisers in the first George W. Bush administration, dean of Columbia Business School, adviser to many financial firms, on the board of Metropolitan Life ($250,000 per year), and formerly on the board of Capmark, a major commercial mortgage lender, from which he resigned shortly before its bankruptcy, in 2009. In 2004, Hubbard wrote a paper with William C. Dudley, then chief economist of Goldman Sachs, praising securitization and derivatives as improving the stability of both financial markets and the wider economy.
Frederic Mishkin, a professor at the Columbia Business School, and a member of the Federal Reserve Board from 2006 to 2008. He was paid $124,000 by the Icelandic Chamber of Commerce to write a paper praising its regulatory and banking systems, two years before the Icelandic banks' Ponzi scheme collapsed, causing $100-billion in losses. His 2006 federal financial-disclosure form listed his net worth as $6-million to $17-million.
Laura Tyson, a professor at Berkeley, director of the National Economic Council in the Clinton administration, and also on the Board of Directors of Morgan Stanley, which pays her $350,000 per year.
Richard Portes, a professor at London Business School and founding director of the British Centre for Economic Policy Research, paid by the Icelandic Chamber of Commerce to write a report praising Iceland's financial system in 2007, only one year before it collapsed.
And John Campbell, chairman of Harvard's economics department, who finds it very difficult to explain why conflicts of interest in economics should not concern us.
But could he be right? Are these professors simply being paid to say what they would otherwise say anyway? Unlikely. Mishkin and Portes showed no interest whatever in Iceland until they were paid to do so, and they got it totally wrong. Nor do all these professors seem to make policy statements contrary to the financial interests of their clients. Even more telling, they uniformly oppose disclosure of their financial relationships.
The universities avert their eyes and deliberately don't require faculty members either to disclose their conflicts of interest or to report their outside income. As you can imagine, when Larry Summers was president of Harvard, he didn't work too hard to change this.
Now, however, as the national recovery is faltering, Summers is being eased out while Harvard is welcoming him back. How will the academic world receive him? The simple answer: Better than he deserves.
While making my film, we wrote to the presidents and provosts of Harvard, Columbia, and other universities with detailed questions about their conflict-of-interest policies, requesting interviews about the subject. None of them replied, except to refer us to their Web sites.
Academe, heal thyself.
Charles Ferguson is director of the new documentary Inside Job and the 2007 documentary No End in Sight: The American Occupation of Iraq.
judithryan43 - October 04, 2010 at 10:19 am
Although there was a voe of no confidence in Summers' presidency at Harvard after he made the remarks about women, that was not what forced him to resign. His resignation came a year later, when faculty members became concerned about quite different issues--notably the Andrei Shleifer case--and a second vote of no confidence was scheduled (it did not take place because Summers resigned). The Shleifer case is pertinent to the column above, because it has to do with money and ethics. Harvard University paid a huge sum of money to settle the lawsuit that the government had brought against Shleifer for his misconduct as a consultant in Russia. I believe that Shleifer paid a fine of $2 million out of his own pocket, while Harvard paid something like $26 million to settle the case.
cosmopolite - October 04, 2010 at 12:14 pm
I have been very puzzled by the Obama administration's reluctance to engage the regulatory and institutional flaws that led to the 2007-08 financial sector meltdown. This article explains why; Obama's economic advisers are happy hookers.
We should all be suspicious of the public policy advice of any academic economist who retires with a net worth in 8 or more digits.
@heathertwo: I can confirm that my students seldom read the texts I assign.
@judithryan: I knew that Shleifer had been convicted of one charge in Federal court. I did not know that that conviction had not been overturned on appeal and that he had paid an ample fine. I am fascinated to read you say that Harvard paid $26M to settle its liability in the case. Shleifer and Summers were good friends, and Summers supported his friend throughout this scandal. That was ample reason for Summers to resign.
@recoveringmba: You wrote: "What we need is minimal regulation that puts the burden of losses on those that stand to benefit if things go well. What we have now is a corporate-government state with private benefits and socialized losses."
The current recession is the resulted from gross mismanagement and excessive optimism in the British and American mortgage businesses. Industry executives thought that because homeownership is a sacred cow, and because the subprime mortgages facilitated homeownership, the government would backstop losses if anything went wrong. When Lehman Brothers was allowed to fail, everybody suddenly realized that this expetation would not be realized, and the world financial system fell out of bed. We are still recovering from the broken bones.
trendisnotdestiny - October 04, 2010 at 12:24 pm
Yves Smith has an in-depth discussion in the book Econned (covering much of the rise of the economist class; determined to legitmate entrepreneurial analysis through mathematical prediction, however many of these models do not account for the psycho-social elements of human decision making in a complex and evolving culture....
Also, Dan Ariely discussed this in a more nuanced way (separating our economic and social selves in a culture looking to exploit the differentials of culture, class and practical economic decision-making...
Great Piece here, will see the movie also!
cosmopolite - October 04, 2010 at 12:37 pm
Pay close attention to what this article reveals about Martin Feldstein and AIG, Glenn Hubbard and Capmark, Frederic Mishkin and Richard Portes on Icelandic banking, Laura Tyson and Morgan Stanley,
I did not know that finance industry directorship pay as much as 250-350K/year.
The allegiance of Summers and Geithner to Democratic party and to progressive ideas is no more than a coat of paint. These and others of their ilk are in bed with the financial industry and have done very well by it. Summers is a hypocrite: he does the bare minimum to make himself appointable by Democratic administrations, then advances a GOP agenda. If Summers were an avowed GOP or libertarian intellectual, he would have fewer friends in high places, and his rise in academia would have been more difficult.
Pay close attention to the Summers-Robert Rubin connection.
"Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)" This is very disturbing.
I do not blame financial derivatives traded on exchanges for the 2008 meltdown. I do blame AIG's credit default swaps and the securitization of subprime mortgages, with the blessing of the rating agencies and worst of all, of Fannie and Freddie, who at one time held 500B of subprime mortgage-backed securities.
"Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a "full-blown financial crisis" and a "catastrophic meltdown."
Prophetic words.
"When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a "Luddite," dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector." Summers has yet to pay a price for being catastrophically wrong here.
"Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations."
Rolling Stone recently published a long investigative piece coming to the same conclusion. The White House is filled with Republican wolves wearing Democratic fleeces.
"Starting in the 1980s, and heavily influenced by laissez-faire economics, the United States began deregulating financial services. Shortly thereafter, America began to experience financial crises for the first time since the Great Depression. The first one arose from the savings-and-loan and junk-bond scandals of the 1980s; then came the dot-com bubble of the late 1990s, the Asian financial crisis; the collapse of Long Term Capital Management, in 1998; Enron; and then the housing bubble, which led to the global financial crisis. Yet through the entire period, the U.S. financial sector grew larger, more powerful, and enormously more profitable. By 2006, financial services accounted for 40 percent of total American corporate profits."
The Obama administration has not seen fit to challenge this Wall Street empire in any way. Given the above, it is astounding that Lehman was allowed to fail.
"Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. This is now, literally, a billion-dollar industry." This is very true and thank you for shining a light in this corner.
Meanwhile, what goes begging nowadays? The notion of fiduciary duty to one's depositors and stockholders.
walkerst - October 04, 2010 at 03:22 pm
Just to clarify - it is not the case that all of academe does not require professors to report outside activities or income. I've worked as a faculty member at several academic institutions, and by and large, they did require disclosure. Harvard doesn't require disclosure (and I did work there, though in an academic staff position), but the City University of New York and the University of Toronto in Canada, where I've also worked, both required an annual disclosure of all outside activities, affiliations, and work, whether compensated or uncompensated. I think the difference is that Harvard is a private institution, and can do mostly as it pleases, as long as it complies with law. Public institutions have far more strictures, in my opinion.
lexalexander - October 05, 2010 at 09:23 am
It's no longer left vs. right, and it may not even be large corporations vs. the rest of us. The biggest conflict now is banksters, specifically, against the rest of us. And the banksters are winning.
|
|
|
Decline of the Empire
It has been announced that Larry Summers, director of Obama's Economic Council and the unholy spawn of the Prince of Darkness, will be returning to Harvard at the end of this year. And why not? His work is done. Barry Ritholtz says good riddance-
Summers is the former Clinton Treasury Secretary, mentored by Robert Rubin. As such, he was one of the chief architects of the crisis. In addition to believing all of the usual foolishness about efficient markets, he bought into the radical deregulation arguments pushed by the free market absolutists.
Summers was Treasury Secretary when Glass Steagall was repealed. Instead of speaking out against the irresponsible Gramm–Leach–Bliley Act (Financial Services Modernization Act of 1999), he actively supported it. Instead of explaining to the public how Glass Steagall prevented Wall Street crises from spilling over into Main Street for 65 years, he rolled over for Citibank.
The repeal of Glass Steagall was not a cause of the crisis, but it allowed the net damage to be far far worse than it would have otherwise been. And it was emblematic of the corporate takeover of the legislative process. For a fee (campaign donation) you could write your own regulations. How could that ever go wrong?
Even more ruinously, Summers oversaw the passage of Commodities Futures Modernization Act of 2000 that exempted financial derivatives from all regulatory oversight. The CFMA made the AIG collapse not only possible, but likely. It helped to set up both Lehman and Bear Stearns. CFMA allowed AIG FP to write over $3 trillion in derivatives, reserving precisely zero dollars in case an underwritten derivative needed to be paid...
Barry characterizes Obama's hiring of the Usual Suspects as a mistake-
During the Bush administration, we saw the bailouts of Bear Stearns, Fannie & Frediie, AIG, Citigroup, Bank of America, Merrill Lynch, Morgan Stanley, Goldmasn Sachs, etc. The new White House lacked the will or the understanding or the nerve to break with those Bush policies. That was their ultimate error. Instead of imprinting the failures of the prior administration on his predecessor, Obama decided to adopt them, making them their own. Huge mistake.
OK, I want to make some crucial distinctions which I hope everyone will take to heart. Obama's hiring of Larry Summers was not a mistake. That characterization implies an error in judgment. There was no such error. Summers, Geithner and the rest were hired to maintain the status quo. And this they did. The phrase "extend and pretend" has been used to describe the accounting rules banks use to hide their losses. Americans generally do not understand that Extend And Pretend is an apt description of all Imperial Behavior & Policies.
There was never a chance Obama would repudiate the power of Finance in politics. Ah, some of you will say, Dave thinks there's a conspiracy. But that's wrong too, there is no conspiracy. There is only Right Thinking and Wrong Thinking. The former supports and advances Imperial agendas. The latter buys you a one-way train ticket to nowheresville. Barry Ritholtz is closer to the truth than he knows when he says-
Summers was incapable of saying, let's repeal the Glass Steagall Repeal; lets overturn CFMA. Most humans have a hard time saying: "My bad, let's just reverse the error and start over." By putting into senior positions the people who helped create the mess, we ended up with a defense of the decision making that [preceeded Obama] instead of a fresh approach. This was not change we could believe in - it was simply more of the same.
Sure, people have a hard time admitting they made mistakes, but there was never any chance of a "fresh approach" as Ritholtz and the rest of us wanted. Repealing Glass Steagall to let loose a hoard of predatory bankers was not a mistake, it was a policy which Wall Street bought & paid for.
The issue is not whether the Son of Satan will admit he made a mistake. Instead, the issue is whether the Empire will acknowledge its fundamental Corruption. Rest assured, that admission of guilt will never happen. Extend And Pretend means more of the same now and in the future. I was being facetious when I wrote the president a letter asking him to level with the American people. Admitting the moral bankruptcy of past & present Imperial policies is not on the agenda.
If those Inside the Beltway started admitting "mistakes" there would be no end to it. And here are the "mistakes" we made under W, and here are the "mistakes" we made under Bill Clinton, etc. It would go on and on. Oh, yeah, implementing policies that allowed 1% of Americans to own 25% of the wealth was a mistake. Sorry, our bad!
The history of the exercise of Imperial Power is not littered with confessions of wrongdoing. If you were to ask Obama, Summers or Geithner point-blank whether protecting bankers has undue influence on their decision-making, they would be indignant, they would vehemently deny it. They would talk about what is politically possible and what is not. They would say that a half-way measure that doesn't fix a problem is better than nothing at all, and so on.
And from their own point of view, they would be completely sincere. The human mind is an amazing thing. Vast swathes of reality can simply be blanked out. Or, it's I'll scratch your back and you scratch mine, which is related to what Mark Twain wrote-
You tell me whar a man gits his corn pone, en I'll tell you what his 'pinions is
Self-serving bias is easily, unknowingly disguised and thus remains unacknowledged. Truly, the mind is a wonder to behold.
If we characterize Obama's policies as mistakes, we are already defeated. In so doing, we have completely failed to understand what's going on in Washington. Psychologically, this mischaracterization stems from our need to feel like we control our own destiny, that we live in a Democracy, that voting matters, and all the rest. But as I've said, for those Inside the Beltway only maintaining the Imperial status quo matters.
One of the reasons I write this blog is to destroy the pretence that everything is on the up and up, to show that the Emperor has no clothes. I think it best for all of us if we deal with the reality of our Imperial Extend And Pretend instead of playing the elaborate, irrelevant, insane games that obfuscate that reality. I was watching the PBS NewsHour the other day. They were covering fraud in an election in Afghanistan. They assumed I cared. They went to great lengths to tell the story, with live interviews from Kabul, an earnest follow-up discussion of the true meaning of the story, the whole bit.
Why in hell would any American living outside Washington D.C. care about a fraudulent election in Afghanistan? I mean, do we look like we give a shit? I think you can see the problem here. Goodbye Larry Summers, we eagerly await your Right Thinking replacement.
Update
The very heart of the administration's failings at a presidential economic town hall.
|
|
|
September 22, 2010 | Economist's View
The other day, Andrew Leonard of Salon's How the World Works said in response to a post that appeared here on, as he put it, Republican plans to "Erase the last two years and return to the good old days of George W. Bush":I was struggling to find words to express my Monday morning dismay at this breathtakingly ambitious agenda for making America great again by repeating exactly the same mistakes that screwed the country up, but Mark Thoma, a professor of economics at the University of Oregon, beat me to it (posting shortly after midnight!).My turn. I was trying to figure out how to say that appointing a CEO as head of the CEA plays into Republican charges that Obama is anti-business, but Andrew Leonard beat me to it:
The awesome stupidity of replacing Larry Summers with a CEO, by Andrew Leonard: If the Obama administration appoints a corporate executive to replace Larry Summers as National Economic Council director then the White House fully deserves the thumping it will get in November.The ostensible reason for this colossal misunderstanding of the current political situation, sourced to anonymous administration officials, is that the White House wants "to allay the business community's doubts about administration policies."This is nonsense. The only way for Obama to "allay" the so-called business community's "doubts" would be to join with Republicans in seeking a repeal of bank and healthcare reform, abandon his efforts to raise taxes on the wealthy, and fire Elizabeth Warren. By the definition currently employed on the opinion pages of the Wall Street Journal, anything to the left of Ayn Rand or Jim DeMint is "anti-business." The bleating from Wall Street executives who feel bullied and demonized only proves one thing: Anything less than their total freedom to pursue profit free of all government restraint is utterly unacceptable -- no matter what the consequences for the country at large.Macroboy:
Summers is not so great... I dont have much of an opinion regarding who should replace him, but I do know that Summers was not great - part of that 'free market knows best crowd' who almost destroyed the global economic system. Probably not Tim Geithner as he is cast from a similar mould.
Michael Turner:
Everybody likes to quote Summers on Friedman opining thus:
"... any honest Democrat will admit that we are now all Friedmanites."
They never seem to get this part of the same piece:
"Milton Friedman and I probably never voted the same way in any election. To my mind, his thinking gave too little weight to considerations of social justice and was far too cynical about the capacity of collective action to make people better off. I believe that some of the great challenges we face today, like rising inequality and global climate change, require that the free market be tempered instead of venerated. And like any economist, I have my list of areas where I believe Mr. Friedman oversimplified or was simply wrong."
Just as most glibertarians never hear that Friedman once called the New Deal "absolutely necessary" and that his methods (as did those of most economists) drew very strongly from Keynes.
Cynthia:
Evidently, Summers didn't believe John Maynard Keynes when he famously said, "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done." Otherwise, he would have known that repealing the Glass-Steagall Act of 1933 is a recipe for economic disaster.
Then again, I've come to believe, and I'm very much not alone in believing this, that Summers and other bankster enablers committed premeditated murder on our economy. There is no other way to explain how they ended up even richer following the financial meltdown.
Think about it: had Summers and other bankster enablers unintentional melted down the financial markets, they would have jumped out of high-story windows to their death, as many bankers did following the Great Crash of 1929. Instead, they got away with the financial equivalent of murder because they bought off not just one, not even two, but all three branches of government. So rather than being behind bars were they belong, or even executed as the Chinese do to their financial criminals, they are not only walking the streets as free men, but, even worse, they're strutting down the halls of power as very powerful men!
Believe me, when the truth comes out about this, and eventually it will, the American Empire will go down in history as the most corrupt Empire of all times, beating out the Roman Empire.
kthomas:
"Believe me, when the truth comes out about this, and eventually it will, the American Empire will go down in history as the most corrupt Empire of all times, beating out the Roman Empire."
I don't believe you.
We might go down as corrupt, yes. I'd say we will mostly be remembered for our wastefulness and our lack of responsibility.
Cynthia:
Wastefulness and irresponsibility usually come with corruption, so don't be so quick to count out my prediction.
cm:
Not to dispute your prophecy, but I think this is similar to the "grass is greener on the other side" but in opposite (?) - you are probably not imagining how corrupt everybody else is or has been.
But in your defense, so to speak, one probably has to figure in how enlightened the nation (or its best mainstream thinkers) ever has been, where the US probably ranks fairly high. With emphasis on "mainstream" - every nation or empire has had its intellectual cream, but in many cases it wasn't broadly recognized within the nation. (Possibly another rhyme on the grass beyond the fence - foreign thinkers are given more of a pass than the homegrown "nest befouling" variety.)
|
|
|
Grasping Reality with Both Hands
The job of Assistant to the President for Economic Policy has two components:
mister6:
- Making sure that the President hears and considers the arguments, and makes an informed decision.
- Making sure that everybody thinks that the president has heard and considered their arguments, and made an informed decision, and that they are valued and respected members of the team who are being given due influence and deference.--and also to make sure that the president hears everybody's arguments and makes an informed decision.
Neal:
Given the lack of coherent public announcements and direction from the WH up to this point I would think Larry has not done 1) or 2).Deja-VuWhat IS the current WH policy on the economy? What ARE the specific plans to remedy the situation? In this case generalities and penny-ante programs do NOT cut it at this time. IF the policy options ARE restrained by political opposition why has there been no FORCEFUL and CONCERTED program to call out that opposition and the consequences of their do-nothing stand?
Failure--complete and utter failure.
Three options: they have no clue what to do or they don't have the spine to push for what they want to do or what they want to do is so uncertain as to outcome that they don't want to have a record of pushing for it.
A lot of rats leaving the ship these days.
Johnny AppleseedDear Prof. De Long,
I see that you don't believe that President Obama is a disaster, that financial reform has completely failed, that the gains from healthcare reform will, for the most part vanish in the implementation phase, gamed away by the insurance companies and their lobbyists.
I've always been struck by your forbearance towards the Democrats, the same people who finished deregulating finance, deregulating telecomms, abolishing welfare, shipping America's industrial base overseas, NOT nationalizing the banks instead of bailing them out, NOT banning exotic derivatives, NOT requiring all OTC derivatives to clear through exchanges, etc. etc. etc. and on and on and on.
Summers has played a very important role in ensuring President Obama's economic policies were weak and ineffective, and yet, to you he's somehow okay? I don't understand that at all.Not to impugn your integrity, but the only reason I can think of for your kindness towards the Democratic Leadership Council is that you still hope to get appointed to some economic post in the administration.
Do you have any response at all to this?
Sincerely,
Deja-VuP.S. If you or one of your dastardly minions deletes this post, then you have shown yourself to be anti-Enlightenment and fully deserving the opprobrium Adam Smith(among many others) would heap upon you, were he(or they) alive today.
P.P.S. I would ask you to bear in mind that you're a member of a completely discredited and intellectually bankrupt field: economics. A little humility is in order, I think.
This post is much too kind to Larry Summers. Summers has been too focused on GDP growth rather than jobs.
Shouldn't there be a #3 on the list: provide the President with sound macroeconomic policy analysis and recommendations.PeakVT:I think your own blog demonstrates that Larry's been mediocre at best on #3.
"The Obama administration is going to be weaker as a result of his forthcoming departure." This is nuts. Summers clearly aligns himself with Wall Street and has since he helped de-regulate Wall Street in 2000. His failure to include Romer's recommendation for a larger stimulus was a significant failure in judgment. Obama was not served well by either Summers and Geithner during the financial reform process, and reappointing Bernanke in light of his obvious disinterest in unemployment is causing and will cause suffering among people not of the class you and Henderson are members. (And then there are Bernanke's views on Social Security.) All three should go and Obama should find some economic advisers who are not in the ex-Clintonite club of crypto-Republicans.CT MikeI have to say that I am fairly surprised by your stance. Barry Ritholtz has been ripping both Summers and Geithner for some time now. His post today summarized my feelings on these two far more eloquently than I could so I'll just post the link: http://www.ritholtz.com/blog/2010/09/summers-good-riddance/ I'm curious to know how you (or other supporters of Summers/Geithner) would respond to these arguments.Ken Houghton:"Only one public shouting fight in the halls of the West Wing in two years is... quite good, really." You're misreading this. Summers "threw an elbow," as John Q noted, when he didn't present Romer's estimate as even a consideration.Given his position and personality, there should have been public shouting at least once a quarter. That there was only one in two years indicates that everyone =knew= he wasn't doing (1), so there was no point in believing (2). Ron Susskind's book on Christina Romer's time at the White House would be amazing.
|
|
|
September 22, 2010 | naked capitalism
I have no punditical stake in the outcome. I am no admirer of Summers. I don't know the man; I am not an angry alumnus of Harvard rending my crimson garments and keening over the financial and ideological travesties associated with his tenure as President of my alma mater. I have heard him speak once or twice; in both instances I thought myself to be listening to the smartest man in room, certainly in the speaker's opinion. Henry Ford famously observed that history is bunk, which is my view of economics (and economists) generally. Summers is right at the top of the list of America's best-known economists, and therefore, in my eyes at least, is guilty by association.
Oddly enough, none of this bears on my view as to the reasons for Summers' departure. I think he is leaving because he has done what he came to do. I think he was hired to do a job, has done it with all the admirable consistency, duplicity and proficiency that such a job requires, and now both he and his employer agree that all would best be served by Summers' moving on to do the same thing elsewhere. It's a classic American theme: In a troubled town, a gunfighter of reputation is hired by the mayor and his circle to deal with the problem. He does so, hands in his star and rides on, leaving his bailiwick in the condition his patrons wanted. In this instance, the problem dealt with was a bunch of noisy would-be reformers wanting to clean up the place. Think of Summers in the Jack Palance role in "Shane." The question is: will Alan Ladd ever show up?
I think Larry Summers was tasked with making sure the kind of backlash that in 1933 unleashed Ferdinand Pecora on Wall Street didn't happen in 2009. I think Larry Summers was tasked with marginalizing Paul Volcker, who could thus serve the new administration as moral window-dressing without actually causing trouble. I think it was understood from the outset that any meaningful economics program must involve taking Wall Street to the woodshed, and that this must not be allowed to happen. I think Larry Summers, skilled in the ways of the Washington equivalent of Dickens's "Circumlocution Office" (in Little Dorrit), saw to it that it did not.
One of the most famous of modern quotations comes from Lampedusa's The Leopard, when the old prince's fiery nephew Tancredi tells his uncle, "In order for things to stay the same, everything must change." But change is as change does. In our time, where talk is deemed equivalent to action, Tancredi might have said, especially had he been a high-ranking Wall Street executive, "In order for things to remain the same, it is only necessary to talk about change."
As in "I am the Candidate of…."
I think Summers, with a deftness that would be admirable were it not so repellent in its long-term effects, in what it has cost this nation, saw that change was talked about, but not initiated. The talk was talked, but the walk was never walked.
That's what Summers came to do, in my opinion, and that's what he did. If, in November, he actually leaves the White House, he can with pride and justice flaunt a banner that reads "Mission Accomplished." On few mortals is such greatness showered.
readerOfTeaLeavesEdwardoWonderfully savage writing. His description of Summers calls to mind a passage from "The Merchant of Venice":
There are a sort of men, whose visages
Do cream and mantle like a standing pond;
And do a willful stillness entertain,
With purpose to be dress'd in an opinion
Of wisdom, gravity, profound conceit;
As who should say, I am Sir Oracle,
And when I ope my lips, let no dog bark!
The glitter on Larry Summers is, indeed, not gold.
Nor even brass.NotTimothyGeithner"I think Summers…saw that change was talked about, but not initiated. The talk was talked, but the walk was never walked."
Indeed, just like his Commander-in-Chief.
CynthiaAh, Larry Summers, I wonder what his conversations with Ken Lay before they lobbied Governor Grey Davis for energy deregulation entailed.
michaelAs US Secretary of the Treasury in the Clinton Administration, Larry Summers worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also worked with Greenspan and Wall Street interests to torpedo efforts to regulate derivatives. This is why he came in third place just behind Milton Friedman and Alan Greenspan, in the contest to win the Dynamite Prize in Economics (see link below).
Keep in mind, Summers helped blow up the economy not by accident, but by design. And before he did this he made certain that Uncle Sam would bail the banksters back into prosperity. This wouldn't have been so bad had some of this prosperity trickled down to the rest of us. But no, Summers and other bankster enablers like Tim Geithner and Ben Bernanke made certain that all the prosperity from the bank bailouts remained firmly in the hands of the banksters. This has caused the gap between our rich and poor to widen to a point where our middle class is now hanging by a thread. And when this thread finally breaks, rest assured that Summers and all of his bankster friends will be celebrating with glee.
This is why Summer has never been, nor will he ever be, a friend of the Democrats. And he can pretend all he wants that he is a friend of theirs, but there is nothing he can do to make them believe this!
A.LizardWell, the only good news is that this is not sustainable.
Without meaningful reforms the next global financial collapse will be within the next few years, not after another 80 years. The "noisy would-be reformers" will have another chance then.I wish Harvard much fun with this POS.
well, that's one of "Obama's Three Stooges of Finance" down, with Bernacke and Geithner to go.
The GOP proposal to replace Summers with someone who's more Wall Street friendly is a non-starter, given that there is no such person.
Summers has served America just as well as he served Lithuania when that nation's government was imprudent enough to hire him to provide economic advice. (their economy got so much worse afterwards that their suicide rate doubled… i.e. "Mission Accomplished".
I think Summers' next job should be to provide economic direction to some nation whose government we *really* want to destabilize.
|
|
|
This was only part of the financial deal cutting between the banks and Clinton and Congress. A year later Summers in tandem with then Texas GOP senator and Chair of the Senate Banking Committee Phil Gramm rammed through another "financial modernization" measure. This one took the wraps off government regulations that checked banks, insurance companies and brokerage houses from dumping billions into financial swaps (speculation) on commodities such as oil and food staples. The rationale was the same as that given for getting rid of Glass-Steagall and that was to keep the financial institutions as full profit centers with minimal to no government oversight accountability or investor, depositor and shareholder accountability.The predictable quickly happened with the regulatory gloves off commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies could do whatever they wanted when it came to investing in each other's businesses and marching in lock step with each other's financial operations.
The implosion of Wall Street directly resulted from the questionable policies that Summers and Rubin rammed through, and Geithner backed. Even in the face of the financial crisis, the troika gave no sign of backing away from their belief that failing financial institutions must be propped up with massive amounts of taxpayer dollars, that the industry can police itself, and that Wall Street still hold the key to economic recovery. The final financial reform law reflects much of that thinking.
The harsh criticism Geithner and company's prescription for sustained recovery haven't shaken President Obama's resolve to stay their course. And the drumbeat attack on him from the GOP and rightwing bloggers, talk jocks, and tea party leaders as a closet socialist have made him even more cautious about doing and saying anything that can even remotely be construed as anti-business.
The call for Geithner and Rubin to go, though, will continue loud and long. The real and perceived misery level of the middle-class appears likely to continue to rise and the clamor for Obama to be even more aggressive in tackling the economic malaise will rise too. Geithner and Rubin could be the next to go.
|
|
|
September 22nd, 2010 The Big Picture
The good news: Summers is gone Jan 1 (no word yet on Geithner).
The bad news? I am not sure what (if any) impact this will have on the administration's economic policies.
To review: Summers is the former Clinton Treasury Secretary, mentored by Robert Rubin. As such, he was one of (many) architects of the financial crisis. In addition to believing all of the usual foolishness about efficient markets, he bought into the radical deregulation arguments pushed by the free market absolutists.
Summers was the Treasury Secretary when Glass Steagall was repealed. Instead of speaking out against the irresponsible Gramm–Leach–Bliley Act (Financial Services Modernization Act of 1999) that allowed the Financialization of America to progress, he actively supported it. Instead of explaining to the public how Glass Steagall had prevented every Wall Street crisis since the Great Depression from spilling over onto Main Street, he rolled over for Citibank.
Understand that the repeal of Glass Steagall was not a cause of the crisis. But, it allowed the net damage to be far greater and extend far wider than it would have otherwise been. From a libertarian perspective, it was emblematic of the corporate takeover of the legislative process. For a hefty fee (aka campaign donation) you could pretty much write the regulations that covered your own industry. How could that ever go wrong?
Summers oversaw the passage of the even more ruinous Commodities Futures Modernization Act of 2000. The CFMA exempted all financial derivatives from any and all regulatory oversight. The CFMA not made the AIG collapse possible, it made it highly likely. It helped to set up both the Lehman and Bear Stearns' collapses. The CFMA allowed AIG FP to write over $3 trillion in derivatives, reserving precisely zero dollars in case these insurance policy-like obligations had to be paid out.
Failing upwards: When Obama appointment the Rubin duo of Summers and Geithner, it a perverse reward for a job done poorly. The two were creatures of the banking system, and were unlikely to do anything that threatened the existing order. Even worse, it created a dynamic where the new administration was committed to defending the policies that helped to contribute to the crisis in the first place. Instead of To Hell with the Banks, Save the Banking System, we got the exact reverse. This was Rubin's lasting gift to the Obama White House: A third term for George W. Bush's economic policies. When Obama becomes a one-termer, it will be his own fault for following this horrific economic advice.
Summers was incapable of saying, let's repeal the Glass Steagall Repeal; lets overturn CFMA. Rather than fix what was broken, he stayed committed to the same bad ideas that led to crisis and collapse. Most humans have a hard time saying: "My bad, let's just reverse the error and start over." By putting into senior positions the people who helped create the mess, we ended up with a defense of the decision making that proceeded, instead of a fresh approach. Summers was a defender of the status quo. This was not change we could believe in - it was simply more of the same.
The Bush administration gave us the bailouts of Bear Stearns, Fannie & Frediie, AIG, Citigroup, Bank of America, Merrill Lynch, Morgan Stanley, Goldmasn Sachs, et. al. The hope that a new White House would change the course was quickly dashed by the new old Economic team. Obama lacked the will or the understanding or the nerve to break with those Bush policies. That was his ultimate error. Instead of imprinting the failures of the prior administration on his predecessor, instead of making Bush own what he in fact did, Obama wrongly adopted them. Thus, he made the bailouts in large part his own. Huge mistake - and one that was inevitable with Summers large and in charge of White House Economic policy.
The Obama White House correctly forced the insolvent automakers into bankruptcy reorganization. They should have done the same with the insolvent banks and investment firms. That was impossible with the banker's boys running the White House economic policy: The Rubin/Summers/Geithner team made sure that did not happen.
As Allan Meltzer stated, "Capitalism without failure is like religion without sin-it just doesn't work." The change people voted for never appeared, and the Summers led economic team gave us two more years of Bush bailout policies. For that humongous error, his departure is a welcome change.
~~~
UPDATE: September 22, 2010 10:34am
To put this into context of Wall Street:
Whenever a new portfolio manager takes over an older, under-performing fund, the first thing he does is jettison all of his predessor's mistakes. Why own the prior manager's problems? If you decide these names are attractive at a later date, well then, he can own them on his own terms, metrics, methods, etc.
But if you were to put the original manager back in charge, he will not be able to disown those prior errors. His cognitive biases are likely to prevent him from acknowledging the same problems he created. This is why project leaders are removed, military commanders get relieved, CEOs get fired. A clean sweep is all but impossible with the prior management. This is human nature.
PERMALINK | COMMENTS (42)
Chief Tomahawk :
Worthy of a Harvard seminar BR! Hope they give you a ring to book a speaking engagement regarding their soon-to-return DC insider/boomerang. I wonder whether Summers will hook Harvard up with another $1.8 trillion dollars worth of risky investments for it's endowment fund (afterall, the place is still standing)??? http://www.boston.com/news/local/massachusetts/articles/2009/11/29/harvard_ignored_warnings_about_investments/?page=1
call me ahab :
excellent post-
Obama could have (and should have) made some bold moves regarding the banks- but delegated (Reagan anyone?) the decisions on that to those who were supposedly the experts-
colossal blunder- (much like starting a land war in Asia)
scottsabol :
Its a shame that the majority of the public is ignorant on the basics of economics to understand what the repeal of Glass-Steagall and the passage of the Commodities Futures Modernization Act setting the stage for what has happened since then.
Most still attempt to whittle it down to the same "higher taxes, big government" or "lower taxes, less government" rhetoric.
Maybe a change will do some good in the long run. Only time will tell. I bet Geithner is gone by the end of the year.
chartist :
This is my main problem with the Ivy league: they perpetuate crony capitalism.
call me ahab :
here's an image everyone can relate to including Harvard Alumni and students (who lost billions in their endowment fund)-
http://www.truthdig.com/images/reportuploads/solongsummers_399.jpg
and following on MEH's theme- Surprise, Surprise,Surprise- your money's gone!!! (and why was he picked by Obama again . . .call me dense)
wally :
"For a fee (campaign donation) you could write your own regulations."
Exactly! Laws for sale. That's where we are today.
davefromcarolina :
The question, of course, is whether Summers will be replaced by someone not tied to Rubin. Do you suppose that's within the realm of the possible?
crazicanuck :
I don't think it was 'a lack of nerve', I think it was a lack of votes. Were/are the US politicians amenable to the policies you suggest? The Obama admin wanted to go beyond partisanship. Geintner and Gates are examples of an effort to go beyond partisanship. Any effort at compromise means that any policy will be compromised. You are saying that Obama was wrong to try at non partisanship? He should of said "Bush was an idiot and I will not have any Republicans or officials from the Bush era in my admin"? Obama compromises have failed.
Americans blame Obama for the mess they are in now and want to return to the 'good times' under Bush. If that is true then Obama can, effectively, do nothing.
TakBak04 :
Good Post, BR, reminding us of why we should celebrate Summer's exit.
Problem is…who will replace him? I saw Erin Burnett (CNBC) this a.m. pushing three CEO's who she said were her suggestions. Erin is a member of Council on Foreign Relations, so assume either they or some other interest gave her those names. I don't know why I have hard time believing she did her own research to come up with the names she did, and sorry I didn't write them down…believe it was former CEOs of Deer, Continental Airlines, and someone who had something to do with a GE division.
Would it be a good idea to have al former CEO to replace Summers? Some would say better a person with business experience than another Ivy League Economist… I'm not so sure.
number2son :
crazicanuck,
The answer is no. Obama should have been a leader. A man who does not seek consensus for consensus-sake, but provides a clear and decisive way forward that inspires others to follow. Someone who truly had the best interests of the entire country as his guiding principle. Instead we have a meek corporate middle-manager and can now look forward to even more horrible leadership from whoever the right-wing noise machine throws up on the ballot in 2012.
dead hobo :
BR pondered:
The bad news? I am not sure what (if any) impact this will have on the administration's economic policies.
reply: ------ Probably none. As another poster above stated, Obama lacks leadership. If he had any leadership abilities, it would not matter who held the job or whether Summers was there or not. The rest of the Democrats ooze failure at their most core level. No meaningful change will be proposed, discussed, initiated, or implemented. Summers replacement will be an empty suit and leave no footprints other than to support whatever new spending initiatives bubble to the top. Republicans would be no different in results, only in tactics.
The Fed will support economic bloat by printing money and causing commodities to be priced out of the range of affordability. The only measured inflation will come from 2md round effects from asset inflation due to commodity price increases since commodity prices aren't counted as inflation by the Fed. The rest of the economy will be in deflation due to the high cost of commodities and lack of demand due to lack of jobs and lack of disposable income, all because commodities are so expensive.
carleric :
It is a sad but true fact that Larry Summer's reputation is dwarfed by his abysmal record of continued failures…..he is in the same camp with Bernanke, Geithner, et al…educated far beyond his ability to comprehend….or just another bewildered neo-Keynesian…
Lugnut :
"When Obama appointment Summers (and Geithner), it he was perversely represented a reward for a job done poorly."
BR, add this to your list of things to edit. Otherwise excellent post
ashpelham2 :
I agree with all points stated in the blog, Mr. Ritholtz. I'd also like to second the comment about how Americans should get a good understanding of what caused them to lose their jobs and lose their livelihoods, and that it wasn't "more taxes, more government" or "less taxes, less government".
Instead, it was the NASCAR jackets that our lawmakers should be wearing right now, that show what industries and what companies specifically paid for them be there. If we all understood which side of the aisle some of these hacks we call politicians were on, voting would become a very different exercise, every 2 years. Instead of just checking the box "R" or "D", people would have to know who the candidates are, that are going to appoint corporate puppets like Summers, and stop RE-electing pols who will say one thing, and do the exact opposite.
Here's to "change" we can believe in……
Marcus :
Summer's leadership at Harvard was the main reason the school lost over $12B. He was the main advisor for over a trillion in wasted spending in DC. I wonder what new mischief Larry is up to? I want to put the company he joins.
Breezy :
BR You were too charitable. Summers has a long history of being brilliant on things that don't matter, but an unbroken history of making very bad choices/decisions/recommendations on the big important decisions.
Your list of his big failures is good, but that list is much longer. I question those who think his departure won't help. Isn't he a consummate gate-keeper who prevented all good ideas from reaching the President? Won't his successor allow at least some sound economic ideas get to Obama?
Mike in Nola :
BR – Great post, but lots of typos. You should get someone else to proofread it.
Your quote on capitalism and religion points out the problem pervading the US today in both spheres, typified by the rise of the Joel Osteen-type ministries. God loves you and wants you to be successful. Never a mention of the necessity to be good and obey the commandments or atone for wrongdoing. It's as it if the congregation were all bankers and God was Ben Bernanke or Tim Geithner.
Greg0658 :
"Here's to change we can believe in…… Instead of just checking the box R or D"
how about – instead of people – we get to vote on issues – run by people – who we can throw the bum & law out – in 45 days – after we become unhappy with the law they wrote *
* ah but business will be running round chasing changing policies – ah then get it right the 1st time – write what you really think the people will stick with
IT can happen in this super connected day … but but but I do worry what the Americans will choose for a few years (or decades) after and then I do believe in masses wanting it "just right"
lalaland :
Just to be clear – after TARP, the Obama administration should have forced the banks through bankruptcy? I don't think that would be constitutional, and maybe a Republican could get away with it with severe bruising, but as a Dem that would literally destroy the party.
Dems reputations are already anti-business, and forcing solvent companies (they would claim they are solvent you know – Fuld STILL does, for example) through bankruptcy would have resulted in impeachment proceedings.
Marcus :
Summer is not leaving until January, safely after the mid-term elections. The real question to ask: Who will replace Summer and what will they do?
The leading contenders are:
Anne Mulcahy – former chief executive at Xerox. Laura Tyson – Clinton era Chair of the Council of Economic Advisors. Diana Farrell – Summers deputy and heir apparent. Alan Blinder – Princeton's version of Larry Summer.
Just look at the history of Xerox and you have the answer for Mulcahy. Farrell is part of the Summer team and will not get the nod for all the reasons in Barry's update (She can't disavow mistakes of the past.). Blinder is more of the same, an Ivy League theorist.
Which leaves one reasonable candidate – Laura Tyson. She would be my pick too.
rickety rick :
since summers and rubin worked for president clinton it seems logical to me to more accurate to call this the "4th term of william j. clinton's economic policies. "
plenty of blame to share for the whole mob of them.
Mike in Nola :
lalaland: I think he could have gotten away with it. After all, Main St. who has the votes, hates Wall St. Populism will sell in this environment. Good example was FDR's fear of Huey Long during the great depression.
Chief Tomahawk :
"This is why project leaders are removed, military commanders get relieved, CEOs get fired."
Except in the case of the Chicago Cubs!
obsvr-1 :
September 22nd, 2010 at 12:00 pm Marcus : September 22nd, 2010 at 10:54 am
Summer is not leaving until January, safely after the mid-term elections. The real question to ask: Who will replace Summer and what will they do?
@Marcus : The leading contenders are:
Anne Mulcahy – former chief executive at Xerox. Laura Tyson – Clinton era Chair of the Council of Economic Advisors. Diana Farrell – Summers deputy and heir apparent. Alan Blinder – Princeton's version of Larry Summer.
Just look at the history of Xerox and you have the answer for Mulcahy. Farrell is part of the Summer team and will not get the nod for all the reasons in Barry's update (She can't disavow mistakes of the past.). Blinder is more of the same, an Ivy League theorist. Which leaves one reasonable candidate – Laura Tyson. She would be my pick too.
-- Reply
Laura Tyson - puck - Remember she was hanging with the boys (Rubin, Summers) in the Clinton era (1995 – 1996, Chairman, National Economic Council 1993 – 1995, Chairman, President's Council of Economic Advisors) See her resume below**, too much acedamia, looks alot like Summers, been there tried that. Another candidate is being reported, Dick Parsons, current chairman of Citi. Do we really want to consider someone who supported Rubin and presided as chairman of the board during the Citi implosion ???
Heaven help us that a better list will emerge.
**Laura Tyson's Positions Held
At Haas since 1990 2008 – present, S. K. and Angela Chan Chair in Global Management 2007 – 2008, Professor, Haas School of Business 2002 – 2006, Dean, London Business School 1998 – 2001, Dean, Haas School of Business 1997 – 2001, Principal, Law and Economics Consulting Group 1990 – 2001, Professor, Haas School of Business 1977 – 2001, Professor, Department of Economics, UC Berkeley 1995 – 1996, Chairman, National Economic Council 1993 – 1995, Chairman, President's Council of Economic Advisors 1990 – 1992, Director of the Institute of International Studies, UC Berkeley 1988 – 1992, Director of Research, Berkeley Roundtable on the International Economy, UC Berkeley 1974 – 1977, Assistant Professor, Department of Economics, Princeton University
tcdiaz :
The wealth of an individual can be measured by the time and work accumulated during employment. The wealth of a nation is measured by the sum of the population's wealth as a whole…
The 78 million baby boomers represent trillions invested in the market. Their accumulated wealth has eroded. GOT RETIREMENT? NOT…We have all worked and invested in the American Dream. We are the enablers of Commerce.
The policy makers, new world order, and the Wall Street Icons have tested the financial stamina of our system to the brink of collapse. The illusion of 5%, 8%, 10%, 15%, return is just that. Illusion. C D rates are 1.4%, that's reality Some one went to jail recently for something called A PONZI SCHEME? I think Goldman was fined $600 million for selling credit default swaps they made billions on. The congressional committee spanked them and moved on. It would be nice if the money collected be distributed to the individuals that had (lost) money invested in the housing funds. The former safe long tem investment….GREED for a lack of a better word is a BAD THING. Most of middle class are just bottom feeders.
Here is my stimulus Idea for the day. The IRS rebate $100,000 to every taxpayer to spend. We are Painting a pretty picture with a decaying canvas.
obsvr-1 :
someone to add for consideration:
Simon H. Johnson
Ronald A. Kurtz (1954) Professor of Entrepreneurship Professor of Global Economics and Management
http://mitsloan.mit.edu/faculty/detail.php?in_spseqno=198
He is far more realistic and critical in review of the causes, resolution and remedies for handling financial industry and economic issues.
See the current TARP report and his input/assessment, page 114. http://www.sigtarp.gov/reports.shtml (download on the left)
Mannwich :
September 22nd, 2010 at 12:55 pm Excellent post, BR!
Elizabeth :
Excellent. You nailed it. Thanks for this.
Obama's entire economic policy now seems to be predicated on the idea that the repayment of the TARP money will show how accountable his administration is. Instead, the bailout and cynical back-patting that has occurred around the "repayment," has made Americans more angry, because we know that the following is true: the TARP bailout caused the unemployment rate to soar, while the top management of TARP-recipient institutions (and their trading partners) pocketed the money.
Our family lived this: my small-town-banker husband was one of 42,500 people laid off by B of A in 2008-09 (he worked in a small, profitable private banking office), when $50 Billion of TARP money was flowing to that institution. A large portion of this TARP money went to top management in terms of bonuses and salaries increases. At the same time, this management began to conduct massive layoffs. They were mainly conducted in smaller markets across the country where B of A was able to get under the 100-person layoff reporting requirement–we have a list of hundreds of people in small (but profitable) offices in the Northwest who were let go in Feb. 2009. So, now every time I hear that another $1 million TARP money is repaid, I know that happened simply because dozens or perhaps hundreds of people lost their jobs a year or so earlier, causing profits and stock price to go up temporarily, which in turn was used to "repay" the TARP money.
Just look at the numbers of layoffs of other TARP-recipient banks that are now repaying: Citi: 50,000, JP Morgan, 9,200, etc. There is a perfect correlation: TARP money flows in and is largely pocketed by upper management whose pay packages increase, layoffs begin, earnings and stock price jumps temporarily, money gets repaid. End result: unemployment up, money accrues to highest net worth individuals. This is a policy that Summers, Geithner, Rubin and Paulson engineered–and Volcker was not allowed to influence. Who Obama marginalized is even more telling than who he enabled.
That is what the American people are angry about: at the end of the day, they know they they paid $1 trillion, but are far worse off. Obama has deservedly lost our trust: what he says doesn't line up with with his actions or what people are experiencing, and they know they've been conned. (Full disclosure: I voted for him.)
Cynic_FA :
Summers: Good Riddance – Geithner: Round up the peasants with pitchforks
Summers role was economic advisor, Geithner's role is economic implementer. I think that Timothy has a way bigger share of the blame for the failure to develop and implement economic policy. saw that he managed to force of Herb Allison with a claim that Herb was at fault for the bank bailotu.
Fact is that Geithner was head of the New York Fed, so he was responsible for failure to get banks to pull back from risk, failure of banks to raise capital in 2007, failure of regulators on Lehman repo 105, illegal payment of $30 billion to JP Morgan for Bear Stearns, decision to crush Lehman, payment at 100% for AIG debt including his buddies at Goldman, and failure to include responsible lending and bonus control as part of early TARP payback.
And, like BR says Geithner is the top tax collector who doesn't pay his own taxes. How about a little pinata bashing with Tim Geithner in the box?
obsvr-1 :
Summers Out, Could Geithner and Rubin Be Next?
http://www.huffingtonpost.com/earl-ofari-hutchinson/summers-out-could-geithne_b_734693.html
|
|
|
Apr 4, 2009 | Salon.com
White House officials yesterday released their personal financial disclosure forms, and included in the millions of dollars which top Obama economics adviser Larry Summers made from Wall Street in 2008 is this detail:Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . .
Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.
That's $135,000 paid by Goldman Sachs to Summers -- for a one-day visit. And the payment was made at a time -- in April, 2008 -- when everyone assumed that the next President would either be Barack Obama or Hillary Clinton and that Larry Summers would therefore become exactly what he now is: the most influential financial official in the U.S. Government (and the $45,000 Merrill Lynch payment came 8 days after Obama's election). Goldman would not be able to make a one-day $135,000 payment to Summers now that he is Obama's top economics adviser, but doing so a few months beforehand was obviously something about which neither parties felt any compunction. It's basically an advanced bribe. And it's paying off in spades. And none of it seemed to bother Obama in the slightest when he first strongly considered naming Summers as Treasury Secretary and then named him his top economics adviser instead (thereby avoiding the need for Senate confirmation), knowing that Summers would exert great influence in determining who benefited from the government's response to the financial crisis.
Last night, former Reagan-era S&L regulator and current University of Missouri Professor Bill Black was on Bill Moyers' Journal and detailed the magnitude of what he called the on-going massive fraud, the role Tim Geithner played in it before being promoted to Treasury Secretary (where he continues to abet it), and -- most amazingly of all -- the crusade led by Alan Greenspan, former Goldman CEO Robert Rubin (Geithner's mentor) and Larry Summers in the late 1990s to block the efforts of top regulators (especially Brooksley Born, head of the Commodities Futures Trading Commission) to regulate the exact financial derivatives market that became the principal cause of the global financial crisis. To get a sense for how deep and massive is the on-going fraud and the key role played in it by key Obama officials, I highly recommend watching that Black interview (it can be seen here and the transcript is here).
This article from Stanford Magazine -- an absolutely amazing read -- details how Summers, Rubin and Greenspan led the way in blocking any regulatory efforts of the derivatives market whatsoever on the ground that the financial industry and its lobbyists were objecting:
As chairperson of the CFTC, Born advocated reining in the huge and growing market for financial derivatives. . . . One type of derivative-known as a credit-default swap-has been a key contributor to the economy's recent unraveling. . .
Back in the 1990s, however, Born's proposal stirred an almost visceral response from other regulators in the Clinton administration, as well as members of Congress and lobbyists. . . . But even the modest proposal got a vituperative response. The dozen or so large banks that wrote most of the OTC derivative contracts saw the move as a threat to a major profit center. Greenspan and his deregulation-minded brain trust saw no need to upset the status quo. The sheer act of contemplating regulation, they maintained, would cause widespread chaos in markets around the world.
Born recalls taking a phone call from Lawrence Summers, then Rubin's top deputy at the Treasury Department, complaining about the proposal, and mentioning that he was taking heat from industry lobbyists. . . . The debate came to a head April 21, 1998. In a Treasury Department meeting of a presidential working group that included Born and the other top regulators, Greenspan and Rubin took turns attempting to change her mind. Rubin took the lead, she recalls.
"I was told by the secretary of the treasury that the CFTC had no jurisdiction, and for that reason and that reason alone, we should not go forward," Born says. . . . "It seemed totally inexplicable to me," Born says of the seeming disinterest her counterparts showed in how the markets were operating. "It was as though the other financial regulators were saying, 'We don't want to know.'"
She formally launched the proposal on May 7, and within hours, Greenspan, Rubin and Levitt issued a joint statement condemning Born and the CFTC, expressing "grave concern about this action and its possible consequences." They announced a plan to ask for legislation to stop the CFTC in its tracks.
Rubin, Summers and Greenspan succeeded in inducing Congress -- funded, of course, by these same financial firms -- to enact legislation blocking the CFTC from regulating these derivative markets. More amazingly still, the CFTC, headed back then by Born, is now headed by Obama appointee Gary Gensler, a former Goldman Sachs executive (naturally) who was as instrumental as anyone in blocking any regulations of those derivative markets (and then enriched himself by feeding on those unregulated markets).
Just think about how this works. People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting. When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal. Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government. Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced. This corruption is so tawdry and transparent -- and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity -- that it is mystifying that it is not provoking more mass public rage.
All of that leads to things like this, from today's Washington Post:
The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials. . . .
The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials. . . .
In one program, designed to restart small-business lending, President Obama's officials are planning to set up a middleman called a special-purpose vehicle -- a term made notorious during the Enron scandal -- or another type of entity to evade the congressional mandates, sources familiar with the matter said.
If that isn't illegal, it is as close to it as one can get. And it is a blatant attempt by the White House to brush aside -- circumvent and violate -- the spirit if not the letter of Congressional restrictions on executive pay for TARP-receiving firms. It was Obama, in the wake of various scandals over profligate spending by TARP firms, who pretended to ride the wave of populist anger and to lead the way in demanding limits on compensation. And ever since his flamboyant announcement, Obama -- adopting the same approach that seems to drive him in most other areas -- has taken one step after the next to gut and render irrelevant the very compensation limits he publicly pretended to champion (thereafter dishonestly blaming Chris Dodd for doing so and virtually destroying Dodd's political career). And the winners -- as always -- are the same Wall St. firms that caused the crisis in the first place while enriching and otherwise co-opting the very individuals Obama chose to be his top financial officials.
Worse still, what is happening here is an exact analog to what is happening in the realm of Bush war crimes -- the Obama administration's first priority is to protect the wrongdoers and criminals by ensuring that the criminality remains secret. Here is how Black explained it last night:
Black: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion - a trillion is a thousand billion - $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine.
These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...
Moyers: What do you mean?
Black: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator. . . .
The Great Depression, we said, "Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?" Where's our investigation?
What would happen if after a plane crashes, we said, "Oh, we don't want to look in the past. We want to be forward looking. Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. . . .
Moyers: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
Black: Absolutely.
Moyers: You are.
Black: Absolutely, because they are scared to death. . . . What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.
Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.
Moyers: Even though Goldman Sachs had a big vested stake.
Black: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society.
This is exactly what former IMF Chief Economist Simon Johnson warned about in his vital Atlantic article: "that the finance industry has effectively captured our government -- a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises." This is the key passage where Johnson described the hallmark of how corrupt oligarchies that cause financial crises then attempt to deal with the fallout:
Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or-here's a classic Kremlin bailout technique -- the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk-at least until the riots grow too large. . . .
As much as he campaigned against anything, Obama railed against precisely this sort of incestuous, profoundly corrupt control by narrow private interests of the Government, yet he has chosen to empower the very individuals who most embody that corruption. And the results are exactly what one would expect them to be.
* * * * *
I was on the Moyers program last night after the Black interview -- along with Amy Goodman -- discussing the media's role in this establishment corruption (that segment can be viewed here), and yesterday morning I was on C-SPAN's Washington Journal with the primary topic being this blatant, sleazy oligarchical control of both the Executive and legislative branches (which can be seen here).
UPDATE: Just to get a sense for how propagandistic, sycophantic and fact-free are the most extreme Obama worshippers in our "journalist" class, consider this recent article from The New Republic's Noam Scheiber in which he urged the White House to "free its economic oracle" -- Summers -- and defended and praised Summers on the ground that "his exposure to Wall Street over the years has been limited." As Jonathan Schwarz asks, citing the massive compensation on which Summers engorged himself by feeding at the Wall Street trough last year: "I wonder what would have constituted 'significant' exposure to Wall Street? Maybe if he'd worked for D.E. Shaw full time? (Amazingly, Summers was paid $5.2 million for a part-time position.)"
|
|
|
January 4, 2010 | The Baseline Scenario
This morning at the American Economic Association (AEA) meeting in Atlanta, I was on a panel, "Global Financial Crises: Past, Present, and Future," with Allen Sinai (the organizer), Mike Intriligator, and Joe Stiglitz.
The Wall Street Journal's RealTime ran a summary of my main points: growth in 2010 may be faster or slower – depending on how lucky we get- but, either way, the most serious problem we face is that 6 banks in the U.S. are now undeniably (in their own minds) Too Big To Fail.
Reckless and mismanaged risk-taking is the sure outcome. But don't take my word for it – read Larry Summers's 2000 Ely Lecture to the AEA. The best line is on p.13, "[I]t is certain that a healthy financial system cannot be built on the expectation of bailouts" (American Economic Review, vol. 90, no. 2; access through your library).
A number of participants asked for a copy of my slides – please use this version (in addition there was some other material that will appear shortly in 13 Bankers, so we're not putting it on the web yet).
NemoSo has Summers changed his mind, or did he never believe his own words?
Serious question.
Russ
He believed in imposing every kind of austerity upon any country small enough to bully who was in the position America is in now.
But now that it's America in that same position, he advocates doing the exact opposite of every thing he ever demanded for the weak.
He's just a gutter bully, plain and simple, and a perfect example of how the powerful demand that those less powerful live up to practices and "ethics" they themselves don't live up to and never intend to live up to.
So he hasn't changed his mind, it's just that what he advocates is directly proportionate to the power of the recipient.
If America somehow "recovered" and we got back to business as usual, and a few years down the road a smaller country got into this kind of difficulty, he'd be right back imperiously demanding the harshest structural adjustments.
maynardGkeynes
btravenMight not the difference be that the US is not similarly situated in this regard?
A country with the world's largest economy, the reserve currency, and debt instruments that sell at negative interest rates in times of crisis, is not exactly in the same position as say, Mexico.
RussPlease! There is and was absolutely no reason to bail out any financial institutions. It's all about grift and graft and the regulators and legislators aiding and abetting the robbery of the citizenry by the banksters.
The government could have become the lender of last resort sooner rather than later, as spared us all the "highway robbery" and moral hazard of pumping insane amounts of money into TBTFs. I mean, come on, the Geithner stealth move on Christmas eve is essentially the last step to the complete nationalization of the mortgage market. Mmm…so tell me why we needed to pump money into the financial sector? Oh yeah, so they could pump the market and give themselves monstrous sized bonuses!
As it has been said, if an organization is too big to fail, it is too big to exist. These "banks" and their shareholders and creditors should have been left alone to crash or wither, and the government should have covered depositors and transitionally provided loans (well underwritten loans). Instead, the public coffers are stacked with massive debt, while the banksters laugh their a##es off as they take off in their Lear jets.
maynardGkeynesMight not the difference be that the US is not similarly situated in this regard?
That's what I said: America will automatically play the vicious, hypocritical bully to whatever extent it retains the power to do so.
But don't worry, the US is headed Mexico's way. As Simon's excellent article said, it's a banana republic. It's a zombie still staggering only on inertia by now.
(I only used the example of a "recovered" US for the sake of argument.)
Though perhaps some of the worst could have been averted if they had imposed austerity at the TOP where it belongs. But the reason cancerous oligopolies are doomed is because they cannot do such things. They're structually maladaptive beyond redemption.
Indeed America might have been better off if there had been someone to play some kind of disciplinarian role. It might have been forced to compromise with reality and, god forbid, morality, at least to some extent.
@Russ, I also think that what they did with those countries was unfair. My only point was that imposing the same type of austerity on the US economy like they did with Korea, etc. would be an even bigger error, as it would cause a lot of harm not only in the US, but in poorer countries that trade with us.
On the other hand, we can't go on this way for much longer without bankrupting ourselves, and also I think that the system is seriously imbalanced in favor of the corporate state.
Simon Johnson's slide show alludes to the corporate over-grazing of the commons, which could lead to its own destruction. Can anything stop it before that? Reason to worry, because the political system is completely captured at this point.
|
|
|
December 14, 2009
Two leading White House economic advisors – Larry Summers and Christina Romer – are giving very different views on the economy.
As Fox news summarizes:
"Everybody agrees that the recession is over," said Larry Summers, director of the National Economic Council.
"Of course not," countered Council of Economic Advisers Chairwoman Christina Romer in a separate interview when asked if the recession is a thing of the past …
Romer appeared to be more politically sensitive to [the high unemployment rate], reflecting Obama's recent statement that he won't rest until all Americans who are looking for work can find jobs again.
Based on the "official definition," the economy has, "at least in terms of GDP, reached that point" where the recession has ended, she said. But given high unemployment which could go even higher, Romer offered a different response when asked if the recession was over "in your mind."…
Summers appeared to cite such forecasts in explaining the stages of economic recovery. He referenced the fact that unemployment dropped from 10.2 percent to 10 percent last month and predicted more solid trends toward recovery next year.
"Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be," he said on ABC's "This Week." "These things happen in stages. First, GDP goes up. That has happened. Then, hours that are worked by workers who already have jobs go up. That's starting to happen. Then employment goes up. We got very close to that this year, this month, with only 11,000 jobs lost. And then unemployment starts to come down. So these problems weren't made in a month or a year, and they are going to take a substantial time to solve.
At first glance, Summers' argument sounds convincing … GDP has been growing, and jobs lag the general economy.
However, as Paul Volcker explained to Spiegel this weekend, the growth in GDP is an illusion. Specifically, the economy is actually shrinking, and the only growth is from what the Fed has poured into the economy:
SPIEGEL: The US has not yet instituted any kind of reform policy. What we see is the government and the Federal Reserve pouring money into the economy. If one looks beyond that money, one sees that the economy is in fact still shrinking.
Volcker: What should I say? That's right. We have not yet achieved self-reinforcing recovery. We are heavily dependent upon government support so far. We are on a government support system, both in the financial markets and in the economy.
Moreover, Romer is right that unemployment might increase. Indeed, Summers has created a rising tide of unemployment in America which threatens to stall any lasting economic recovery for a while.
Indeed, many leading economists believe that America has permanently lost jobs under Summers' watch.
Summers is out of touch with reality. He lost billions at Harvard due to his blindness about the riskiness of derivatives.
As I wrote in February:
Summers is the guy responsible for:
- Allowing the banks to carry extraordinary levels of debt, thirty-to-one fractional reserve banking margins
- Ensuring that derivatives were not regulated, and that AIG could operate as a giant hedge fund
- Repealing New Deal era legislation which separated investment banks from commercial banks, insurers and stock brokers, and which kept companies from becoming "too big to fail"
As a 1999 New York Times article entitled "Congress Passes Wide-Ranging Bill Easing Bank Laws" quotes Summers as saying:
"Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Treasury Secretary Lawrence H. Summers said. "This historic legislation will better enable American companies to compete in the new economy."
As I pointed out in April:
On Friday, Summers basically said we should continue to do the exact same things which got us into this mess because:
All crises must end. The "self-equilibrating" nature of the economy will ultimately prevail, although that may take massive one-off government actions. Such a crisis happens only "three or four times" per century, so taking on huge amounts of government debt is fine; implicitly, we will grow out of that debt burden.
Um . . . sorry to break it to you there Larry, but a group of economics professors has recently demolished the "self-equilibrating economy" theory:
If one browses through the academic macroeconomics and finance literature, "systemic crisis" appears like an otherworldly event that is absent from economic models. Most models, by design, offer no immediate handle on how to think about or deal with this recurring phenomenon. In our hour of greatest need, societies around the world are left to grope in the dark without a theory. …The implicit view behind standard models is that markets and economies are inherently stable and that they only temporarily get off track. The majority of economists thus failed to warn policy makers about the threatening system crisis and ignored the work of those who did. …
The confinement of macroeconomics to models of stable states that are perturbed by limited external shocks and that neglect the intrinsic recurrent boom-and-bust dynamics of our economic system is remarkable. After all, worldwide financial and economic crises are hardly new and they have had a tremendous impact beyond the immediate economic consequences of mass unemployment and hyper inflation. This is even more surprising, given the long academic legacy of earlier economists' study of crisis phenomena … This tradition, however, has been neglected …
And when economist James Galbraith spoke at a recent panel on the causes of the financial crisis, the first thing he listed as the main cause of the crisis was "The idea that capitalism … is inherently self-stabilizing" …
Summers [is] like a guy swearing that the Sun really does revolve around the Earth and that the current orbit is just a temporary aberration . . . and that if we just wait a little while, "everything will return to normal".
As I pointed out in September, Summers has totally misunderstood the multiplier effect.
He must be replaced with someone whose allegiance is to America as a whole, and not solely Wall Street.
As Congressman DeFazio put it:
[Obama] is being failed by his ec[onomic team ... We may have to sacrifice just two more jobs [Summers and Geithner] to get millions back for Americans.
Anon :
""We will get out of the crisis by encouraging exactly the kind of behaviors that "previously we wanted to discourage" two years ago. It is "this insight, this view" particularly with regard to leverage (overborrowing, to you and me) that "undergirds the policy program in the United States.""
http://baselinescenario.com/2009/04/27/larry-summers-new-model/#more-3466
How does he say something like this without 100,000 people showing up outside his office the next day sharpening a guillotine?
RW :
It's nice spin that Obama is not being well served by his economic team, but I see little evidence for that. The big banks & wall street firms were his biggest contributors. He appears to anyone not invested in making excuses for him to be merely what his detractors claimed: a corrupt Chicago machine politician who was promoted well above his competence because of his politically useful racial background and skilled use of the teleprompter.
In Chicago those who pay, play. Why is anyone surprised that he's making his benefactors rich at our expense? What would Daley do? Blago? Jessie Jackson? These are his real role models. He's acting as expected.
bobh:
We need a more sophisticated instrument for measuring intelligence that will put an end to the idea that Larry Summers is anything but a self-promoting mediocrity.
jake chase:
You don't get along without going along. What rises to the top is scum.
Uncle Billy Cunctator :
More about Volcker please. Summers has been cast as the villain and Volcker as a hero. We need to look very carefully at our heroes.
i on the ball patriot:
You all deserve to be fucked - hard - as long as you keep this two party fantasy theater alive with your votes and attention.
No perception, no balls, no freedom.
Deception is the strongest political force on the planet.
Rickstersherpa:
So everyone here will be overjoyed when Sarah Palin is President, Lynn Cheney is reprising her Dad's role as co-President/chief operating officer of the Government, Mitch My Heart is as large as pea McConnell is Senate majority leader, and Tan Boy John Boehner is Speaker with Larry Kudlow as Treasury Secretary? Yep, we will see real reform then. Social Security will be turned into a slush fund for Wall Street and Medicare a slush fund for health insurance companies. How soon we forget. As bad and bought and sold as the Democrats are, it can always be worse.
Of course, sometimes I suspect that Larry Summers is a secret plant from Republican National Committee. And for a man who is supposedly so brilliant, he has been around at lot of freaking disasters, starting with that "ship pollution to poor countries memo" (which apparently the Europeans took seriously because that is exactly what they do with their landfill), through the Aisian Financial crisis, Glass-Stegall repeal, and that most blessed bill, Phil Gramm's (the guy McCain wanted to make Secretary of the Treasury) Commodity Futures Modernization Act that permitted AIG to run its bucket shop.
I am not saying this as an apology for Obama (Summers and Geithner's appointments remain a terrible disappointment to me) and at some point, he will have to fire them if for no other reason than appease the base. On the otherhand, there have been good things going on. I work in Government and I can tell you that intelligence, belief in pubic service, and pragmatism have replace ideology and people who just hated their agencies they were running.
Comparing him to the FDR's administration, and the different circumstances he faces (FDR essentially had no opposition for almost 2 years as the Republicans were so reduced and demoralized and the Southern Conservatives were copted then as members of the Democratic Party, and not the heart of the opposition as they are today), he is no weaker than FDR in seeking to avoid direct fights with the powers that be.
There is a learing curve in being President. Let's see how well he learns.
Rickstersherpa
Maybe Summers could take his own advice here.
"In the US today, as in many other countries in the past, confidence will return the first day an official statement about the economy proves to have been too pessimistic."
From yves post of two years ago: http://www.nakedcapitalism.com/2007/11/larry-summers-warns-of-deepening-crisis.html
Again, for the "brightest man alive" Summers apparently was oblivious the fact that all that credit had been lent on a housing and commercial real estate bubble and that what he thought was the basement was pretty close to the peak.
But then the people talking housing bubble were not the seers of Wall Street but just folks like Dean Baker, Robert Schiller, and Calculated Risk. Individuals and sources that just don't appear (or at least not to) on Summers radar screen. Although, to give him credit, the recession was on his screen. I also note how accurate those Fed forecasts turned out to be (NOT!!!). Makes one real confident about the current Fed forecasts.
|
|
|
Dec 19, 2009 | http://www.vanityfair.com/
Summers is part of a generation of gifted Philadelphia-area Jewish boys, which includes private-equity mogul Steve Schwarzman and Revlon C.E.O. Ronald Perelman, who went on to make it big on the national scene. Unlike with Schwarzman and Perelman, who made billions in finance, the tug of Summers's DNA was to academia and, specifically, to the study of economics. Not only are both his parents economists, but he is also the nephew of two winners of the Nobel Prize in Economics: Paul Samuelson (his father's brother-Summers's father changed the family name from Samuelson) and Kenneth Arrow (his mother's brother). Larry, the oldest of three boys, alone among them chose to study economics. (The middle brother, Rick, is a psychiatrist in Bryn Mawr and a professor of psychiatry at Penn; his youngest brother, John, is a litigator at the law firm of Hangley Aronchick Segal & Pudlin, in Philadelphia.) "My father was an incredibly intellectual deep thinker with no ego," Rick Summers recalls. "He was about ideas and about his work and about exploring things and about research. My father inspired Larry. They spent a lot of hours together, my father taught him a lot, and I think Larry just got incredibly naturally interested in what my father was interested in and took off from there."
In 1971, at age 16, Summers applied to Harvard but was rejected. Instead, he matriculated at M.I.T.-a few miles and a world away from Harvard but one of the few elite universities at that time that could contain his prodigious intellect. At rapid-fire speed, he began the construction of a C.V. that is now 13 pages long and counting.
At first, he was a math major, but he realized quickly he was out of his element. He switched to economics and, as a sophomore, started working as a summer assistant to conservative Harvard economics professor Martin Feldstein, who would become one of his lifelong mentors. In 1974, Summers applied again to Harvard, this time for the doctoral program in economics, and this time the university accepted him.
While working on his dissertation Summers met Victoria Perry, who had studied economics at Yale and had moved to Cambridge to get acclimated before beginning Harvard Law School. Perry, who was once described as looking like she'd stepped out of an L. L. Bean catalogue, grew up an only child in Maine, where her mother was a math professor at the University of Maine and her father a stockbroker in a small firm in Bangor. She and Summers had mutual friends and, at first, hung out together as part of that group; then, in 1980, they started dating. "He was really smart and funny, interesting, and just a really good person," she recalls.
At 28, Summers became one of the youngest tenured professors in Harvard's history. He was on a superstar's trajectory.
And then near tragedy struck. For two months, he had been nursing a persistent fever. At first, doctors at the Harvard health service told him it was nothing to worry about. But as his body temperature remained at or above 102 degrees, his parents insisted he get a second opinion. His blood was tested. "My blood counts were all off," he recalls. He then had a bone-marrow test. "Do not pass go-you're going from the doctor's office to the hospital," he was told. It took a while, but eventually he was diagnosed with late-stage Hodgkin's disease. He had nine months of chemotherapy. "It was obviously terrifying," he says.
He grappled with the news by remaining extremely focused on the study, writing, and teaching of economics. "If you looked at the list of publications," he points out, "and you said, 'What year was he sick?,' you would not be able to tell. And that wasn't because there was anything heroic about me. It was because the only way to kind of keep the stuff at bay was just to focus on my work and to focus on being around people."
Summers, who remains cancer-free, credits the experience with giving him an ongoing interest in the study of the life sciences (a curriculum he advocated at Harvard) and in the promulgation of health-care-policy reforms, and, above all, a healthy appreciation of the fragility of human life and the special burdens put on the less fortunate. "The weak need you more than the strong do," he says. "The feeling of extreme vulnerability that I had during that experience caused me to be more attentive to the people who are on the vulnerable side of the ledger."
Toxic Shock
In 1984, soon after his cancer diagnosis, Summers and Victoria Perry were married at the elegant Harvard Club on Commonwealth Avenue, in Boston. Both a rabbi and a Congregationalist pastor presided at the ceremony, in front of about 150 of their friends and family. By this time, Victoria was a tax lawyer at Hale & Dorr, the old-line Boston law firm, and Larry was teaching at Harvard. Having looked into the abyss, Summers also became-if possible-even more professionally impatient. The economics papers and articles started pouring out of him, around 100 or so during the rest of the 1980s. In 1993 he won the John Bates Clark Medal, as had Samuelson, Arrow, and Feldstein before him. The award, now given every year, recognizes the work of an American economist under 40. Even though some rival economists questioned the depth and breadth of Summers's insights into economics-some think him best at taking the ideas of others and articulating them with more aplomb-and wondered whether he would ever reach his uncles' level of achievement, he could easily have soldiered on at Harvard in his capacity as the Nathaniel Ropes Professor of Political Economy.
But somewhere along the way Summers caught the bug of wanting to convert his economic theories into real-world solutions. In early 1988, along with Robert Reich, another Harvard professor, Summers was a regular-but unpaid-economic adviser to the Democratic presidential campaign of Michael Dukakis, the governor of Massachusetts, whom Summers knew from the neighborhood. "[Summers and Reich] were first among equals," explains Gene Sperling, then one of Dukakis's chief campaign aides and now counselor to the secretary of the Treasury, "and hungry to be involved."
Summers was more than a bit wonkish, arguing that Dukakis should make proposals about copyright law or reforming gatt, the General Agreement on Tariffs and Trade. Finally, one day Dukakis blurted out, "Larry, gatt schmatt!" And that was the end of that. ("Larry likes to tell that story," Sperling says.)
In the rough-and-tumble of the campaign, Summers met a new set of political allies, such as Sperling, George Stephanopoulos, Laura D'Andrea Tyson, and, most important, Robert Rubin, then a vice chairman at Goldman Sachs, all of whom would become lifelong friends. "It's amazing how much goes back to that Dukakis campaign," Sperling says. In 1991, Summers decided to leave Harvard to become the chief economist at the World Bank. (In the move to Washington, Perry got a job as a lawyer at the International Monetary Fund.) In December 1991 he signed and circulated a memorandum-written by a young World Bank economist, Lant Pritchett-that caused Summers no small amount of future heartache. In the memo, which was meant to be a satire on the scale of Swift's "A Modest Proposal," Pritchett wrote, "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs [Least Developed Countries]?" He then gave three reasons for his conclusion, among them: "A given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that." A predictable firestorm accompanied the leak of the memo. Despite Pritchett's offer to fall on his sword, Summers took the heat himself. World Bank president Lewis Preston called the memo "outrageous," and Summers had to apologize publicly. "I think the best that can be said is to quote La Guardia and say, 'When I make a mistake, it's a whopper,' " Summers said at a March 2001 press conference when asked about the memo.
|
|
|
Dec. 18, 2009 | Bloomberg
Anne Phillips Ogilby, a bond attorney at one of Boston's oldest law firms, on Oct. 31 last year relayed an urgent message from Harvard University, her client and alma mater, to the head of a Massachusetts state agency that sells bonds. The oldest and richest academic institution in America needed help getting a loan right away.
As vanishing credit spurred the government-led rescue of dozens of financial institutions, Harvard was so strapped for cash that it asked Massachusetts for fast-track approval to borrow $2.5 billion. Almost $500 million was used within days to exit agreements known as interest-rate swaps that Harvard had entered to finance expansion in Allston, across the Charles River from its main campus in Cambridge, Massachusetts.
The swaps, which assumed that interest rates would rise, proved so toxic that the 373-year-old institution agreed to pay banks a total of almost $1 billion to terminate them. Most of the wrong-way bets were made in 2004, when Lawrence Summers, now President Barack Obama's economic adviser, led the university. Cranes were recently removed from the construction site of a $1 billion science center that was to be the expansion's centerpiece, a reminder of Summers's ambition. The school said last week they will suspend work on the building early next year.
'Case Study'
"For nonprofits, this is going to be written up as a case study of what not to do," said Mark Williams, a finance professor at Boston University, who specializes in risk management and has studied Harvard's finances. "Harvard throws itself out as a beacon of what to do in higher learning. Clearly, there have been major missteps."
Harvard panicked, paying a penalty to get out of the swaps at the worst possible time. While the university's misfortunes were repeated across the country last year, with nonprofits, municipalities and school districts spending billions of dollars on money-losing swaps, Harvard's losses dwarfed those of other borrowers because of the size of its bet and the length of time before all its bonds would be sold.
In December 2004, Harvard completed agreements that locked in interest rates on $2.3 billion of bonds for future construction in Allston, with plans to borrow $1.8 billion in 2008 after they broke ground and the remaining $500 million through 2020. At the time, the benchmark overnight interest rate set by the U.S. Federal Reserve was 2.25 percent. The agreements backfired last year after central banks slashed lending rates to zero and the value of the contracts plunged, forcing the school to set aside cash.
'Education Business'
Borrowers use swaps to match the type of interest rates on their debt with the rates on their income, which can help reduce borrowing costs. Lenders and speculators use swaps to profit from changes in the direction of interest rates. A bet on higher rates, for example, means paying fixed rates and receiving variable. At Harvard, nobody anticipated some interest rates going to zero, making the university's financing a speculative disaster.
Harvard's woes stemmed from misunderstanding its role, said Leon Botstein, president of Bard College in Annandale-on-Hudson, New York.
"We shouldn't be in the banking business, we should be in the education business," Botstein said in a telephone interview.
Making Sense
The financing plan using the swaps was developed by the university's financial team and discussed with the Debt Asset Management Committee, an oversight group, according to James Rothenberg, a member of the President and Fellows of Harvard College, or Harvard Corp., and the school's treasurer, a board position.
The swaps plan was then approved by Harvard Corp. and implemented and monitored by the financial team, Rothenberg said in an e-mail.
Summers, who left Harvard in 2006, declined to comment. As president and as a member of the Harvard Corp., the university's seven-member ruling body, Summers approved the decision to use the swaps.
The strategy made sense in the economic climate of the time, Rothenberg said in another e-mail. Rothenberg is chairman of Capital Research & Management Co., the investment advisory unit of Capital Group Cos. in Los Angeles.
"Rates were at then-historic lows, and the university was contemplating a major, multibillion-dollar campus expansion," Rothenberg said. "In that context, locking in our financing costs so that we would achieve some budgetary certainty had definite advantages."
Demanding Cash
Harvard's failed bet helped plunge the school into a liquidity crisis in late 2008. Concerned that its losses might worsen, the school borrowed money to terminate the swaps at the nadir of their value, only to see the market for such agreements begin to recover weeks later.
Harvard would have avoided paying the costs of its swap obligations by waiting. Its banks, including JPMorgan Chase & Co., headed by James Dimon, were demanding cash collateral payments -- ultimately totaling almost $1 billion -- that Harvard in 2004 had agreed to pay if the value of the swaps fell. At least $1.8 billion of the swaps the school held were with JPMorgan, said a person familiar with the agreements. Dimon, a 1982 Harvard Business School alumnus, declined to comment on the agreements through a spokeswoman, Jennifer Zuccarelli.
Darkest Days
Drew Faust, Harvard's president since 2007, said in an interview about the financial crisis she experienced some of her darkest days as she watched the collapse of U.S. markets that deepened the school's losses.
"Someone would say that this happened, that had happened, they were going to bail out AIG or Lehman is failing," Faust recalled in an interview, referring to the September 2008 bankruptcy of Lehman Brothers Holdings Inc. in New York and the subsequent government bailout of American International Group Inc. in New York. "We were wondering what was going to happen tomorrow."
Harvard speculated in the swap market as early as 1994, according to rating companies' reports. Under Jack Meyer, former chief executive of Harvard Management Co., the school's endowment used swaps to profit from interest-rate changes. The university also used them to fix borrowing costs for capital projects.
Summers became president in July 2001, after serving as U.S. Treasury Secretary. He earned a Ph.D. in economics from Harvard, and became a tenured professor there at age 28. He served from 1991 to 1993 as chief economist at the World Bank, which initiated the first interest-rate swap with International Business Machines Corp. in 1981.
Feeling Flush
In the 1990s, Harvard began amassing 220 acres (89 hectares) for construction near Harvard Business School and its football stadium, located in Allston. In June 2005, Summers unveiled his vision for a campus expansion replete with new laboratories, dormitories and classrooms, renovated bridges and a pedestrian tunnel beneath the water. The Allston project was to transform an industrial and working-class neighborhood of two-family wood homes and small shops by building two 500,000- square-foot (46,000-square-meter) science complexes and a redrawn street grid.
Harvard was flush at the time, with an endowment of $22.6 billion that had returned an average of 16 percent during the previous 10 fiscal years. Summers told Faculty of Arts & Sciences professors in May 2004 that he hoped they wouldn't be "preoccupied with the constraints imposed by resources, for Harvard was fortunate to have many deeply loyal friends," according to minutes of a faculty meeting.
Forward Swaps
"Harvard would be able to generate adequate resources," according to the minutes. "The only real limitation faced by the Faculty was the limit of its imagination."
When the plan was made public in 2005, Harvard's financial team had been busy for more than a year behind the scenes, devising a financing strategy for the project using interest- rate swaps. These derivatives enable borrowers to exchange their periodic interest payments. They typically involve the exchange of variable-rate payments on a set amount of money for another borrower's fixed-rate payments.
In 2004, Harvard used swaps for $2.3 billion it planned to start borrowing four years later. The AAA-rated school would have paid an annual average rate of 4.72 percent if it had borrowed all the money for 30 years in December 2004, according to data from Municipal Market Advisors. The swaps let it secure a similar rate for bonds it planned to sell as it constructed the campus expansion during the next two decades.
'Relatively Rare'
The agreements were so-called forward swaps, providing a fixed rate before the bonds were actually sold. Harvard was betting in 2004 that interest rates would rise by the time it needed to borrow. The school was also assuming the expansion would proceed on the schedule set by Summers and his advisers.
While the university could have paid banks for options on the borrowing rates, the swaps required no money up front.
That time frame, along with the size of the position, was unusual, said Peter Shapiro, an adviser at Swap Financial Group Inc. in South Orange, New Jersey.
"There have been lots of forward swaps, but out longer than three years is relatively rare," Shapiro said in a telephone interview. That duration increases the risk, because the longer the term of the contract, the more volatile the value of the swap, he said.
Columbia, Yale
Columbia University is breaking ground on a $6.5 billion expansion in New York City, and last year used an interest-rate swap for its borrowing of $113 million of bonds sold seven months later. Yale University in New Haven, Connecticut, is also AAA-rated. It had 32 separate swap agreements totaling $975 million as of Oct. 31, hedging the school's $1.4 billion variable rate debt and commercial paper, according to Moody's Investors Service Inc.
Corporations might use derivatives to lower their borrowing costs as many as four years before a bond sale, according to bankers who sell derivatives. Anadarko Petroleum Corp. used the swap market in December 2008 and January 2009 to secure rates for $3 billion it plans to refinance in October 2011 and October 2012, according to the Houston, Texas-based company's third- quarter report from Nov. 3. Matt Carmichael, a company spokesman, declined to comment.
Key Player
Rothenberg, a Harvard College and Harvard Business School graduate, said he was among the key players involved in developing the financing strategy. His Los Angeles-based company, Capital Group, operates American Funds, the second-biggest family of stock and bond mutual funds in the U.S. He had been Harvard's treasurer for six months when the school arranged the Allston swaps in December 2004.
Ann Berman, Harvard's chief financial officer at the time, also played a role in developing the plan, Rothenberg said. Berman declined to be interviewed. She stepped down in 2006 when she was named an adviser to the president, according to the school's Web site. A certified public accountant, Berman got her master's in business administration at the University of Pennsylvania's Wharton School of Business in Philadelphia and had earlier served as a financial planner and adviser for Harvard's dean of the Faculty of Arts & Sciences.
Rubin, Reischauer
Other members of Harvard Corp. in 2004 and 2005, who served with Summers and Rothenberg, were former U.S. Treasury Secretary Robert Rubin, Summers's previous boss and predecessor at the U.S. Treasury, who was an instrumental supporter of his bid for the Harvard presidency; Robert D. Reischauer, former director of the Congressional Budget Office, who was a colleague of Summers and Rubin's in Washington; Conrad K. Harper, a lawyer at Simpson Thacher & Bartlett LLP in New York; Hanna Gray, former president of the University of Chicago; and James R. Houghton, chairman of Corning Inc., the world's biggest maker of glass for flat-panel televisions, in Corning, New York.
All except Rothenberg declined to comment or didn't return telephone calls.
Harvard University's finance staff worked with JPMorgan to develop the size and the length of the forward-swap agreements, said a person familiar with the contracts. Final negotiations to set the rates were left to Harvard Management, which oversees the endowment, because it had swap contracts in place with JPMorgan dating back to 1996 that set terms for the agreements, according to a copy of the agreement obtained by Bloomberg News.
The original swap contract between Harvard Management and JPMorgan was approved by Michael Pradko, the endowment's risk manager, the copy shows. Pradko left Harvard Management in 2005, along with Jack Meyer, the endowment's head, to join Convexity Capital Management LP in Boston, the hedge fund Meyer started. Pradko declined to comment.
Impeccable Timing?
When Harvard Management completed its swap contracts for the school, the timing was encouraging. U.S. Federal Reserve Chairman Alan Greenspan had just begun raising the overnight target rate as the economy rebounded from the bursting of the technology bubble. In the second half of 2004, he lifted it to 2.25 percent from 1 percent.
For more than 20 years, investment banks such as Goldman Sachs Group Inc., JPMorgan, and Citigroup Inc., all based in New York, have been selling swaps as a way for schools, towns and nonprofits to reduce interest costs and protect against rising interest payments on variable-rate debt. The swap agreements can be terminated if either the bank or the issuer is willing to pay a fee, which varies with interest rates.
Posting Collateral
"Swaps have become widely accepted by the rating agencies as an appropriate financial tool," according to a slide entitled "Swaps Can Be Beneficial" that was used in a 2007 Citigroup presentation to the Florida Government Finance Officers Association. Debt issuers can "easily unwind the swap for a market-based termination payment/receipt," the slide said.
Rothenberg said officials throughout Harvard were monitoring the school's swap position, including members of the financial office, the budget office, the controller's office and Harvard Management. Although the contracts required Harvard to post collateral, or set aside cash when the values reached certain thresholds, such provisions weren't unusual, Rothenberg said.
"I think there are lots of swaps with collateral postings," Rothenberg said in an interview. "From fiscal years 2005 through 2008, these swaps were in place and there were collateral postings. It was not a pressing concern for the University, even though you can look at the financial statements and see that there was at least an unrealized loss in certain years."
'Rapid Meltdown'
"I think the unusual nature of these swaps were two things," Rothenberg said. "One, they were large, but the anticipated capital spending program was large; and two, they were longer-dated than most people are used to thinking about, because the capital spending program was expected to last over a number of years. The problem resulted from the rapid meltdown in the markets, which culminated in November when short-term interest rates and swaps rates collapsed."
After credit markets seized up in 2007, central banks worldwide pushed some bank lending rates to zero in their effort to rescue the financial system.
While Harvard Corp. is ultimately responsible for the school's financial decisions, the losses sustained by the school in almost every financial domain -- the endowment, cash account and swaps -- suggest that oversight was lax, said Harry Lewis, a Harvard alumnus, computer science professor and former dean of Harvard College.
'Structural Problem'
Harvard not only lost money on the swaps last year. The value of its endowment tumbled a record 30 percent to $26 billion from its peak of $36.9 billion in June 2008, and its cash account lost $1.8 billion, according to Harvard's most recent annual report.
"They have a structural problem," Lewis said in a telephone interview. "There's something systemically wrong with Harvard Corp. It's too small, too secretive, too closed and not supported by enough eyeballs looking at the risks they are taking."
Summers's departure as president came in 2006, after he questioned women's innate aptitude for math and science. Summers apologized formally and repeatedly for the remarks made in a speech, which he said were misconstrued, and the school said it would spend $50 million to help women succeed in science and engineering. He resigned after the faculty passed a no- confidence motion against him.
Successor Faust
That left Faust, the Civil War historian and prize-winning author who succeeded Summers as president in July 2007, to manage the Allston plans. Faust committed to its first phase: beginning construction of a $1 billion science center that would house researchers from the Harvard Stem Cell Institute, the Harvard School of Public Health and the Wyss Institute for Biologically Inspired Engineering.
By June 2005, the value of the swaps tied to Harvard's debt was negative $460.8 million, meaning that's how much it would have to pay the banks to terminate the agreements, according to the school's annual report that year.
By 2008, Harvard had 19 swap contracts on $3.5 billion of debt with JPMorgan, Goldman Sachs, New York-based Morgan Stanley, and Charlotte, North Carolina-based Bank of America Corp., including the swaps for Allston, according to a bond- ratings report by Standard & Poor's released on Jan. 18, 2008.
Financial Burden
The swaps became a financial burden last year as their value fell and collateral postings rose. In a contract with Goldman Sachs, the school agreed to post cash if the swaps' value fell below $5 million, according to a copy obtained by Bloomberg News. The collateral postings with the banks approached $1 billion late last year as central banks slashed their target rates, according to people familiar with the situation.
Michael Duvally, a spokesman for Goldman Sachs, Mary Claire Delaney, a spokeswoman for Morgan Stanley and Kerrie McHugh, a spokeswoman for Bank of America, all declined to comment.
Harvard wasn't alone in being forced to set aside cash last year to meet such margin calls. The difference was the scale.
Cornell University in Ithaca, New York, posted $38 million of collateral on $1.5 billion of swaps, according to a Moody's report on the Ivy League School. Hanover, New Hampshire-based Dartmouth College, also in the Ivy League, didn't post collateral on their swaps because their investment banks agreed to waive the requirement to win the business, according to a person familiar with the contracts. The Ivy League is a group of eight elite schools in the northeast U.S., including Harvard.
Markets Unravel
After a year during which central banks provided an unprecedented amount of money to rescue financial institutions, the credit markets unraveled along with the stock market in September 2008. Lehman Brothers filed the largest bankruptcy in history on Sept. 15. Two weeks later, the House of Representatives rejected a $700 billion bailout plan, sending the Dow Jones Industrial Average down 778 points, its biggest point drop ever.
The value of Harvard's swaps plunged and its need for cash soared. Under contracts signed in 2004, Harvard had to post larger and larger amounts of collateral to cover the negative value of the swaps; the total amount would approach $1 billion.
At the same time, the usual sources the university relied on to generate cash -- the endowment and its operating cash account -- were hemorrhaging. The school's endowment tumbled, losing 22 percent from July 2008 through October 2008.
Asset Allocation
The Harvard endowment had more than 50 percent of its assets allocated to private equity, hedge funds and other hard- to-sell assets. The university already had borrowed to amplify gains, with leverage targeted at 3 percent of assets as of last year. When Jane Mendillo took over as chief executive officer of Harvard Management on July 1 last year, one of her top priorities was to raise cash. The school couldn't get acceptable prices from the $1.5 billion of private equity stakes Mendillo tried to sell.
Outside managers investing Harvard's endowment were either performing poorly or preventing Harvard from withdrawing cash. Citigroup CEO Vikram Pandit shut down Old Lane Partners in June 2008. Ospraie Management, in New York, closed its biggest hedge fund in September and Farallon Capital Management, in San Francisco, put up a so-called gate, prohibiting clients from taking out cash.
Checkbook Fund
Making matters worse, Harvard disclosed Oct. 16 that its checkbook fund, the general operating account, lost $1.8 billion in the year ended June 30. Lumping the cash account with the endowment was risky, said Louis Morrell, who managed the endowment for Radcliffe College, which is part of Harvard, until 1990.
"They put the operating funds in the endowment --it's like the guy who has his retirement income in company stock," said Morrell, who is also the former treasurer of Wake Forest University in Winston-Salem, North Carolina.
Rothenberg, Mendillo and Daniel Shore, Harvard's chief financial officer, decided last year as the credit crisis deepened that the school needed to borrow money. Shore became acting CFO last year after Elizabeth Mora, who was Berman's successor, stepped down in May 2008. Shore was named to the position permanently in October 2008.
It was at this point, in October, that Harvard officials contacted Ogilby, their bond lawyer at Ropes & Gray LLP in Boston. A 1980 Harvard College graduate, Ogilby is head of the firm's Public Finance Group. E-mails show that Craig McCurley, the director of Harvard's treasury management office, and his associate director, Tom Balish, contacted Ogilby, who in turn reached out to the Massachusetts Health & Educational Facilities Authority, which sells bonds for the state's nonprofits. Ogilby declined to comment.
Needing Cash
Harvard needed cash to pay bills, refinance outstanding debt and break its money-losing swap agreements, according to a series of e-mails beginning on Oct. 31 last year between Ogilby and staff members of the state authority that were obtained by Bloomberg News. School officials asked whether the agency could omit from a public hearing that some of the bonds would finance swap termination payments.
"There is some sensitivity at Harvard about not specifically flagging the swap interest unwind payments," Ogilby wrote on Nov. 12 to Deborah Boyce, an analyst at the authority. "They still would like the ability to finance them, but would prefer to delete those references if they can do so."
Timely Information
Benson Caswell, the bond authority's executive director responded Nov. 13 that the swap agreements would have to be identified and that the authority needed "timely, accurate and unfiltered information, including a balanced presentation," from issuers. Harvard disclosed the use of the bond proceeds, and only wanted to avoid telegraphing potential activity in the swap market, said Christine Heenan, a school spokeswoman.
"The spirit of our inquiry was whether prematurely disclosing plans for what are inherently market transactions would in any way jeopardize the execution of those transactions," she said in an e-mail.
At its Nov. 13 monthly meeting in Boston's financial district, the agency's seven-member board approved a Harvard bond issue of up to $2.5 billion, about the amount of debt it sells for all schools and borrowers in a typical year. The board usually takes two meetings to approve a bond sale. In Harvard's case it took just one meeting.
Nothing Special
"I can assure you that Harvard doesn't get any special treatment," Caswell said. "Other borrowers have received the same service."
Caswell said one board member, Marvin Gordon, is a Harvard graduate and that as long as there is no conflict of interest between his business and the use of the bond proceeds, a board member may vote on approval of a bond sale.
Gordon said while he didn't have a conflict in voting to approve Harvard's bond issue, "they never should have been in the position where they had to get out" of the swaps.
Harvard unwound the swaps at possibly the worst moment in the history of financial markets, said Shapiro, the municipal swap adviser. Just as Harvard's request for approval to sell tax-exempt bonds arrived in the state offices, the swap market began sliding, according to Bloomberg data. While the school waited for permission to raise money, the price to break the swap agreements escalated.
Tumbling Index
On Nov. 13, the index used to value the agreements, the U.S. dollar 30-year swap rate, closed at 4.247 percent. By the time Harvard held its bond sale Dec. 8, the swap index had tumbled to 2.7575 percent. Harvard exited three of its swaps tied to $431 million debt on Dec. 9, when the benchmark fell again to 2.6885 percent. The interest-rate swap market reached a record low of 2.363 percent on Dec. 18.
Harvard's decision to borrow money came at a time when the difference, or spread, between yields on corporate and U.S. Treasury securities was the widest since at least 1990, according to data from Barclays Plc. That meant AAA-rated Harvard was selling bonds when the market was demanding the biggest premium in at least 18 years.
"December 2008 was, by an enormous amount, the worst time in history" to terminate the swaps by borrowing money, said Shapiro.
Harvard sold $1.5 billion of taxable and $1 billion of tax- exempt bonds, using $497.6 million of the proceeds to pay investment banks to extract itself from $1.1 billion of interest-rate swaps, according to its annual report released Oct. 16. Separately, the school agreed to pay another $425 million over 30 years to 40 years to the banks to terminate an additional $764 million of the swaps, Harvard's Shore said.
Unwinding Swap
The school on Dec. 12 paid JPMorgan $34.5 million from the tax-exempt bond proceeds to unwind a swap tied to $205.9 million of variable-rate bonds it sold for capital projects, according to documents obtained from the Massachusetts financing authority. It also paid Goldman Sachs $41.6 million on Dec. 9 and $23.2 million on Dec. 11 to end agreements on another $226.8 million of existing debt. Harvard didn't disclose recipients of the other termination payments because it paid them from the taxable bonds.
The timing was "less than ideal, but the surrounding context was less than ideal as well," said Shore.
Harvard and JPMorgan celebrated the bond issue by hosting a cocktails-and-dinner party at the French restaurant Mistral, in Boston's South End neighborhood, where appetizers start at $15 and entrees cost about $40, according to e-mails obtained from the state finance agency. JPMorgan invoiced the agency $388.78 for three employees who attended: Caswell, Marietta Joseph and Danielle Manning.
Recovering Values
Since then, some of the values in the swap market have recovered to their levels of December 2004 when Harvard signed the forward contracts.
"If Harvard had waited, the cost of terminating may well have been lower, but they weren't willing to take that risk," said Matt Fabian, managing director at Municipal Market Advisors in Westport, Connecticut.
Shore said that he, Mendillo and "a lot of us in senior management" contributed to the decision to break the swap agreements. That group included Ed Forst, the former executive vice president, who returned to Goldman Sachs after less than a year at Harvard, Shore said. Shore also cited Harvard Corp.'s role as bearing the school's ultimate fiduciary responsibility. Forst didn't return calls seeking comment.
Waiting didn't appear to be an option at the time, Shore said.
Stability, Safety
"In evaluating our liquidity position, we wanted to get ourselves some stability and some safety," he said in an Oct. 16 interview this year at Harvard. "It was to take the losses now rather than run the risk of having further losses if we continued to hold on to the positions."
No one expected the indexes used for valuing swaps to fall as fast and as much as they did, said Chris Cowen, managing director of Prager, Sealy & Co. in San Francisco.
"What we ended up with was an outlier event," said Cowen, who advised Harvard as it unwound its position last year. "I was taken by surprise by the falling rates."
Harvard, in the meantime, has cut its capital spending estimate for the next four years in half to about $2 billion. Before the credit crisis, it planned on spending $10 billion over a decade on capital projects, including Allston. Faust is building a team to study "financially and structurally" how Harvard can expand, she said in an e-mail announcing the planned work stoppage in Allston.
Opposing Regulation
Summers, along with Rubin and Greenspan opposed the U.S. Commodity Futures Trading Commission's attempt in 1998 to regulate so-called over-the-counter derivatives, which included agreements like interest rate swaps. At the time, Summers was Rubin's deputy secretary.
Now Summers is leading the Obama administration's effort to write stricter rules for the derivatives market "to protect the American people," he said in October at a conference in New York sponsored by The Economist magazine.
Universities would have been better served if they had stayed away from the more complicated financial instruments being sold by Wall Street, said David Kaiser, a Harvard class of 1969 alumnus who has been critical of the high salaries paid to managers of the school's endowment.
"They used many of the investment strategies of the big banks and hedge funds, and when things went badly they could not get a bailout," said Kaiser, a history professor at the U.S. Naval War College in Newport, Rhode Island. "It would clearly be better for any nonprofit on whom many people depend to pursue safer, more stable strategies."
Taxpayer Funds
Pennsylvania State Auditor General Jack Wagner said Nov. 18 that the state should ban local governments from entering into derivative contracts tied to bond issues, a practice he termed "gambling" with taxpayer funds.
Harvard might have considered it a conservative step to lock in rates when they were low, said Shapiro, the New Jersey- based swap adviser.
"You can be very big and very rich and very smart and still get things wrong," Shapiro said.
To contact the reporters on this story: John Lauerman in Boston at [email protected]; Michael McDonald in Boston at [email protected]; Gillian Wee in New York at [email protected].
|
|
|
Rolling Stone
That was the day the jubilant Obama campaign announced its transition team. Though many of the names were familiar - former Bill Clinton chief of staff John Podesta, long-time Obama confidante Valerie Jarrett - the list was most notable for who was not on it, especially on the economic side. Austan Goolsbee, a University of Chicago economist who had served as one of Obama's chief advisers during the campaign, didn't make the cut. Neither did Karen Kornbluh, who had served as Obama's policy director and was instrumental in crafting the Democratic Party's platform. Both had emphasized populist themes during the campaign: Kornbluh was known for pushing Democrats to focus on the plight of the poor and middle class, while Goolsbee was an aggressive critic of Wall Street, declaring that AIG executives should receive "a Nobel Prize - for evil."
But come November 5th, both were banished from Obama's inner circle - and replaced with a group of Wall Street bankers. Leading the search for the president's new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obama's biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters - chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).
Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm. And to help him pick Obama's economic team, Froman brought in none other than Jamie Rubin, a former Clinton diplomat who happens to be Bob Rubin's son. At the time, Jamie's dad was still earning roughly $15 million a year working for Citigroup, which was in the midst of a collapse brought on in part because Rubin had pushed the bank to invest heavily in mortgage-backed CDOs and other risky instruments.
Now here's where it gets really interesting. It's three weeks after the election. You have a lame-duck president in George W. Bush - still nominally in charge, but in reality already halfway to the golf-and-O'Doul's portion of his career and more than happy to vacate the scene. Left to deal with the still-reeling economy are lame-duck Treasury Secretary Henry Paulson, a former head of Goldman Sachs, and New York Fed chief Timothy Geithner, who served under Bob Rubin in the Clinton White House. Running Obama's economic team are a still-employed Citigroup executive and the son of another Citigroup executive, who himself joined Obama's transition team that same month.
So on November 23rd, 2008, a deal is announced in which the government will bail out Rubin's messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees. It is a terrible deal for the government, almost universally panned by all serious economists, an outrage to anyone who pays taxes. Under the deal, the bank gets $20 billion in cash, on top of the $25 billion it had already received just weeks before as part of the Troubled Asset Relief Program. But that's just the appetizer. The government also agrees to charge taxpayers for up to $277 billion in losses on troubled Citi assets, many of them those toxic CDOs that Rubin had pushed Citi to invest in. No Citi executives are replaced, and few restrictions are placed on their compensation. It's the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubin's fuck-up-rich tenure at Citi. "If you had any doubts at all about the primacy of Wall Street over Main Street," former labor secretary Robert Reich declares when the bailout is announced, "your doubts should be laid to rest."
It is bad enough that one of Bob Rubin's former protégés from the Clinton years, the New York Fed chief Geithner, is intimately involved in the negotiations, which unsurprisingly leave the Federal Reserve massively exposed to future Citi losses. But the real stunner comes only hours after the bailout deal is struck, when the Obama transition team makes a cheerful announcement: Timothy Geithner is going to be Barack Obama's Treasury secretary!
Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup - Michael Froman - before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.
Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the government's bailout generosity would not die with George W. Bush and Hank Paulson. "Geithner assures a smooth transition between the Bush administration and that of Obama, because he's already co-managing what's happening now," observed Stephen Leeb, president of Leeb Capital Management.
|
|
|
Why hasn't a group of disgruntled Harvard alumni circulated a statement itemizing the damage that Larry Summers wrought as dean of the University? Yeah, I know, it would be divisive, grown-ups are discouraged from raising uncomfortable questions, or worse, demanding accountability of leaders.
But Summers did a great deal of damage to Harvard, and has a less than operational moral compass.. He clearly aspires to have another big job in DC, like the Fed chair, so it is important to shine a harsh light on his abject performance (and that's before we get to the biggest issue, that he is a long-standing protege of Bob Rubin, who still seems to wield considerable influence).
From the New York Times:
Harvard announced Thursday that it would indefinitely suspend construction on a high-tech science complex in the Allston neighborhood of Boston because of money problems….
As part of a larger long-term expansion into Allston - a pet project of Lawrence H. Summers, Dr. Faust's predecessor at Harvard and now President Obama's chief economic adviser - the university also bought a string of buildings there over the last 20 years. But many have remained vacant, to the chagrin of Allston residents who have accused the university of buying land and holding onto it, a practice known as land banking.
The four-building science center, estimated to cost at least $1 billion, was originally scheduled to be finished in 2011. Dr. Faust's announcement comes 10 months after she announced plans to slow the pace of the project while the university assessed whether it could continue. Harvard has since disclosed that its endowment declined 27 percent from June 2008 to June 2009, to $26 billion, and the university has made several cost-cutting moves.
Selected Comments
DownSouth:
Matt Taibbi, in his new piece in Rolling Stone, "Obama's big sellout," certainly doesn't have many nice things to say about Summers or the other members of the Rubin administration:
Barack Obama, a once-in-a-generation political talent whose graceful conquest of America's racial dragons en route to the White House inspired the entire world, has for some reason allowed his presidency to be hijacked by sniveling, low-rent shitheads.
http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout/print
Rickstersherpa:
Just one little correction, Larry Summers was President of Harvard, not Dean, for five "interesting" years. For supposedly being the "brightest man alive" and always subjecting ideas brought to him to rigourous questioning, he seems to have accepted without to much questions the group think of the last 30 years. In Harvard, it appears that he did not question the the American university presidents that the way they can tell they are doing a good job it to build lots of fancy new buildings and expand the university's bureaucracy as to justify those tuition increasaes every year at twice the inflation level. Stiglitz worked with him at the World Bank and Dean Baker at treasury, and both came away with the opinion that there was no there there, that he was essentially Bob Rubin's doppelganger.
By the way, anyone following the Democratic party the last 8 years realized that Rubin in particular, and Wall Street bankers in general, in part because of the belief thy really were the miracle workers of 1990s prosperity and in part because they were the biggest source of fund raising for Democrats in the 2006 and 2008 elections. As Kos has pointed out, there was little policy differences between Clinton and Obama, and both were committed to listening a lot to Bob Rubin who himself did not become radioactive until late 2008. I would disagree with Tabbai because I don't think Obama "sold out" as that would mean he changed positions and policy from what he has always believed. After all, he teaches at the heart of Fresh-Water economics, University of Chicago, and shares as his colleagues on the adjunct Law School faculty the two founders of libertarian law and economics theory, Judge Richard Posner and Judge Frank Easterbrook. This association is far stronger than the one he has with Bill Ayers.
Sometimes choices are between bad and worse, and considering the Republican Party is should change its name to the We Are Just Freaking Bat Crazy Party, this is what we have.
|
|
|
The Boston Globe
It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard's endowment, and Lawrence Summers, then the school's president, would face off in a heated debate. The topic: cash and how the university was managing - or mismanaging - its basic operating funds.
Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment's risky mix of stocks, bonds, hedge funds, and private equity. Meyer's successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members.
"Mohamed was having a heart attack,'' said one former financial executive, who spoke on the condition of anonymity for fear of angering Harvard and Summers. He considered the cash investment a "doubling up'' of the university's investment risk.
But the warnings fell on deaf ears, under Summers's regime and beyond. And when the market crashed in the fall of 2008, Harvard would pay dearly, as $1.8 billion in cash simply vanished. Indeed, it is still paying, in the form of tighter budgets, deferred expansion plans, and big interest payments on bonds issued to cover the losses.
So how did one of the world's great universities err so badly in something so basic? It is a story with many actors, the story of an institution that grew complacent as its endowment soared ever higher - an institution that, when the crunch hit, was operating on financial auto-pilot, with many key players gone, and those remaining inattentive, in retrospect, to the risks ahead.
"Investing cash alongside the endowment was a long-held strategy that we didn't decide to change until early 2008,'' said James F. Rothenberg, Harvard's treasurer - a part-time, unpaid role. He said the biggest mistake was not to have taken some of the cash off the table, and placed it in safer accounts, as trouble started brewing in the markets and the economy. "We all can look back now and say we wish we did something different,'' he said.
In the Summers years, from 2001 to 2006, nothing was on auto-pilot. He was the unquestioned commander, a dominating personality with the talent to move a balkanized institution like Harvard, but also a man unafflicted, former colleagues say, with self-doubt in matters of finance.
Certainly, when it came to handling Harvard's cash account, the former US Treasury secretary had no doubts. Widely considered one of the most brilliant economists of his generation, Summers pushed to invest 100 percent of Harvard's cash with the endowment and had to be argued down to 80 percent, financial executives say. The cash account grew to $5.1 billion during his tenure, more than the entire endowment of all but a dozen or so colleges and universities.
Summers, now head of President Obama's economic team, declined to be quoted on his handling of Harvard finances. A friend of his who is familiar with Harvard finances said Summers was warning of growing risks in the global markets by 2007, at the World Economic Forum in Davos, Switzerland. The friend, who spoke on the condition of anonymity because of Summers's current position, said, "In the years after Summers left, market conditions and Harvard's liquidity changed dramatically. The university's financial strategies could have and should have changed with them.''
Investing cash from the general operating account in the endowment wasn't new under Summers, nor was it unique to Harvard. It had been done as far back as the 1980s at the university, officials say, but on a smaller scale. The aggressive investment of cash accounts is part of how the university has long run its "central bank,'' an account that holds funds from its various schools and pays them a modest US Treasury rate of return. The "bank,'' in turn, has invested the lion's share of that money with the endowment, generating returns that are used to pay for shared needs, like graduate housing and financial aid.
The strategy paid off handsomely for years, as the endowment reaped big gains, providing Harvard presidents with a checkbook for ambitious efforts. Under Neil Rudenstine, Harvard's president from 1991 to 2001, cash was heavily invested in the endowment and surged from $290 million to $2 billion. Under Summers, the figure more than doubled again, according to a compilation of the data obtained by the Globe. The big project on Summers's agenda: Harvard's expansion across the river, into Allston.
Summers had a huge influence over Harvard money matters during his tenure, according to several people who worked with him. Known for his love of intellectual debate, he would hear out the opinions of others but ultimately was forceful in his own views. He was more financially sophisticated than most other Harvard presidents, and more deeply involved in decisions, from how to maximize returns on Harvard's cash to using financial instruments called swaps, to hedge against the risk of rising interest rates - a hedge that would ultimately backfire.
In Harvard's 2001-2002 financial report, Summers's opening letter states, "During my first year as President, we took the opportunity to look anew at some of Harvard's financial procedures to make sure we are making the most of our resources.'' He closes the letter noting the need for "prudent fiscal management.''
Despite the warnings from Meyer, Harvard Management's chief for 15 years, Summers felt the cash risk was worth taking at the time, according to people who know him. He was not the sole decision maker on the matter: Members of the financial staff, a broader financial advisory committee, and the university's elite six-member board all weighed in. But Summers was a powerful advocate, and with the returns so good for so long, there was little support for exercising caution.
And soon, Harvard would enter a period of upheaval. Meyer left in the fall of 2005, after clashing with Summers over the compensation of the endowment staff. And Summers announced his own resignation in February 2006 - as it happened, just days after the arrival of Meyer's successor, El-Erian. A month later, Harvard's top in-house financial official, Ann E. Berman, vice president for finance, also resigned.
Summers was gone by July that year, but not before El-Erian issued a new round of warnings about what he saw as an alarming amount of cash being put at risk in the endowment pool, according to several people who were there. El-Erian left Harvard after just two years, at the end of 2007, to return to his old bond firm, PIMCO. Both he and Meyer declined to comment on whether the cash concerns contributed to their decision to leave.
For other university officials, warnings about Harvard's finances were easy to gloss over. The endowment had been a virtual money machine for more than 15 years, and the markets were still rising in 2006. And after Summers resigned, forced out by an angry faculty after comments about women lagging in the sciences and other controversies, there were more urgent fires to tend to.
Derek Bok, a former Harvard president from the '70s and '80s, took over as interim president. He was, by his own admission, unplugged from the complexities of the financial picture.
"I concentrated on academic issues,'' Bok said in a Globe interview. He said that his strength was not in investments and that Harvard had an experienced treasurer and board to oversee those issues. "I think they would have come to see me if there were really important changes,'' he said.
Harry Lewis, a Harvard professor and a former dean of the college, attributes the failure to address the university's financial risks to the ancient structure of the Harvard corporation, which functions as its board. "With only the six fellows plus the president, there is inevitably going be a lot of deference to the people who seem to have the most authority, especially if the president is strong-willed,'' Lewis said. "Whether or not anyone in particular made a mistake in this situation, it shows a fundamental structural problem. The power is just in the hands of too few people with too little accountability.''
The cash in the general operating account exceeded $6 billion by the time Bok and El-Erian left. Problems were starting to surface in housing and the credit markets in 2007. But still the cash policy went unchanged. It wasn't until early 2008 that a chorus of concern was rising from members of the financial staff, professors on advisory committees, and the board. They decided to start pulling some of the cash out of the endowment - in $250 million chunks - quarterly, according to Harvard officials briefed on the plan. But it was too late. They got one slug of money out in March 2008, and then the markets seized up.
The very thing that the former endowment chiefs had worried about and warned of for so long then came to pass. Amid plunging global markets, Harvard would lose not only 27 percent of its $37 billion endowment in 2008, but $1.8 billion of the general operating cash - or 27 percent of some $6 billion invested. Harvard also would pay $500 million to get out of the interest-rate swaps Summers had entered into, which imploded when rates fell instead of rising. The university would have to issue $1.5 billion in bonds to shore up its cash position, on top of another $1 billion debt sale. And there were layoffs, pay freezes, and deep, university-wide budget cuts.
While the global markets were in freefall in September 2008, the nation's most prominent university, with the largest endowment, had barely enough financial hands on deck.
On campus, Daniel Shore was technically the guy at the controls. He was acting chief financial officer and would formally get the job, and the vice president's title, in October. He was the third person to hold the job in as many years. The head of the endowment was new. And the
Goldman Sachs & Co. veteran whom President Drew Faust had just hired to report to her on the university's finances, Edward Forst, was summoned to Washington for a month to help with the federal bank bailout. Rothenberg, the treasurer, was home in Los Angeles, tending to his day job as a mutual fund executive. Since becoming treasurer in 2004, in the Summers era, Rothenberg, 63, has made 65 cross-country flights to Cambridge, slightly more often than monthly, according to a tally by his assistant. He handles other Harvard business by telephone, including early-morning conference calls with overseers. But he earns his living as chairman of Capital Research and Management Co., a $900 billion-asset investment firm that manages the American Funds and is admired for producing steadier returns than many rivals, and losing less in bad times. Rothenberg is also a portfolio manager, personally handling billions of dollars in two giant funds, the Growth Fund of America and the Washington Mutual Investors Fund.
In a March 2007 interview, Rothenberg told the Harvard Gazette, "Most investors invest looking in the rearview mirror. The problem with that is you make the most money by anticipating change. I spend a great deal of my time thinking about how the world will look three or four years from now.''
Even with the losses, Rothenberg said, the cash strategy has earned Harvard returns averaging 8.9 percent over the past 10 years. He and other university officials say the cash pool is still ahead of where it would have been, if invested more conservatively all along. But no one could be specific about what that net gain has been.
Harvard won't stop investing the cash entirely, Rothenberg said, but the past year has "taught us a great deal about the critical importance of maintaining an appropriate focus on risk and liquidity,'' he told the Globe.
No one wants to repeat the black day when university officials had to swallow hard and reveal a $1.8 billion loss. For Harvard's 30 overseers, that news came as a surprise, a full year after they'd been told to expect losses in the endowment. It came at an Oct. 4 meeting on campus, just days before the university disclosed the news publicly.
Said one overseer, speaking on the condition of anonymity because he wasn't authorized to talk about Harvard business: "It wasn't a happy thing.''
guardianangel8:
Give some credit to the whistle blowers who had the courage to go to Congress, like Mr. Rose.
HMC Tax Concerns Aided Federal Inquiries--
http://www.thecrimson.com/article.aspx?ref=527831
Former employee expressed concerns over tax reporting, offshore accounts:
He says he was told it was simply a difference in investment policy. But to Steven M. Rose, then a tax director for Harvard Management Company, the deceptive financial reporting and pervasive ethical deficiencies he says he witnessed there were far from benign. And while the University commissioned an investigation into the issues he raised, he says he quickly reached the point where he felt his concerns had been brushed aside.
"The general disregard for the rules, procedures and compliance-it was ridiculous," Rose said in an interview with The Crimson. "You had to be quiet and do it and put blinders on. If you were doing work in other aspects of the company, you could just do your job. But in [my] part of the job, you couldn't ignore things."
Harvard Management Company-which oversees Harvard's multi-billion dollar endowment-was plagued by a culture of ethical laxity, Rose said. Special relationships with funds run by former employees and the use of offshore investment companies-both used to boost HMC's once-legendary returns-may not be illegal, but are considered to be ethically questionable by some, particularly in light of Harvard's non-profit status.
******
"Guys...let us not forget that the Harvard Business School has produced in the last 20 years, the MBA-hitmen who INVENTED globalization, layoffs, arbitrage, sub-prime mortgages, and a host of financial wrong-doings associated with improving the bottom line while DESTROYING the fabric of American (and world) economics".
"Harvard's pitiful faith in the ability of the national economy to recover--that the loss of endowment, endowment income cannot absorb enough to cover the salaries of 275 employees. Their position as the richest educational institution is hardly jeopardized...easy to sacrifice those whose salaries pale in the grand scheme of Harvard finances ...even with the loss of a third of its highest value, an embarrassment of riches which no other university comes close. Then again its Harvard MBAs who dominate Goldman-Sachs and helped engineer the financial disaster and Harvard MBAs who figured out rather quickly how to profit from it. And its Harvard MBAs who are absolutely clueless to the plights of the people who really work to keep the universities and America going, but always get the shaft when things go bad". (bostonglobe.com,comments, "Harvard layoffs 275")
How about a REAL story on the thousands of layoffs by Harvard and MIT? Now they try to hire their employees back as permanent temps! HA! That would be the day!
CrimsonHRGal:
First they destroyed our endowment, now they're driving out top talent and ruining the quality of education and research at Harvard.
With a meager $28 billion in the bank, Harvard is now gutting budgets, eliminating student services, laying off and forcing out employees, freezing salaries, cutting benefits and looking the other way as managers overwork staff. They also told us FY11 will be worse.
KurtLarsen:
Harvard University has given us the Monster and War Criminal Henry Kissinger, the incredibly arrogant Summers, and, among others, Jeffrey Sachs, who played a large part in destroying the incipient Russian Economy as an advisor to Yeltsin.
I was partnered for some years with three Harvard graduates, and my experience has been that for Arrogant Selfishness there are few who equal them. Harvard's influence and that of it's graduates has grown far out of proportion to its scholarship, and by and large, I believe, does more harm than good.
Harvard and many other universities are not spending the 5% of their Endowment that current Massachusetts law (which they are trying to have changed) requires them to spend annually, and by not using these funds to defray costs, Harvard insures it will ever be the bastion of the Wealthiest Students. Harvard by example teaches its sons and daughters of Wealth to treat the Working Classes with disdain and miserly care, and to measure their own success in the size of their starting salaries.
And Harvard is the very font (along with Yale and Princeton) of the Good Old Boy Network, which gave us George Bush and a host of mediocrities over the years who rise not so much from their brilliance, but from their Connections. From McFarlane to Kissinger to Sachs to Summes, this is the University of the Fatuously, and Arrogantly Greedy.
On The Wrong Side Of The Mirror, your best Universities, America, are the acadamies of Oligarchy, the prep schools of the self proclaimed Masters of The Universe.
But Things Could Change.
The Detective In The Mirror
Nelson8a:
Too much emphasis on individual attributes (intelligence) and too little on systemic flaws. Summers is another symptom of the narrative we have chosen for ourselves. Despite his "brilliance," he and many other economists failed to see the limitations of a model that has enriched few and pauperized many. Harvard and the millions of people holding 401k and 403b accounts have been the victims of this delusion. Now, look at the increase of unemployment and food stamp figures to see this malaise is not limited to academic institutions. The little guys gets punished and the "genius" gets rewarded with a presidential appointment. Time to look for other ways of doing business.
1spinky1:
Not a very promising image for Harvard Business School when the University loses $1.8 B to risky investments, huh?
That's why Meyer left over 5 years ago to start up Convexity...guess Harvard ain't all it's cracked up to be.
aprospectus:
Astonishing that the actual current investors working at Harvard Management - whose salaries are in the multi-millions, as has been well-documented - are left unscrutinized by this article. To merely kick the blame to the departed Mr. Summers or Mr. El-Erian seems irresponsible, too easy and too casual. Obviously there are analysts and managers working now at Harvard Management who have become quite wealthy during this debacle and contributed to implausible mistakes. Their lack of a sense of fiduciary responsibility has seriously harmed the university and its students, and their compensation and roles need serious reconsideration.
guardianangel8:
Thank you Mr. KurtLarsen--
"Harvard by example teaches its sons and daughters of Wealth to treat the Working Classes with disdain and miserly care, and to measure their own success in the size of their starting salaries".
Harvard is not the only one, MIT, their cousin, treats its working class employees in the same manner. Both institutions cry about their lost endowments yet they toss out dedicated workers who made far less than those who created this fiscal disaster.
Now their big donors have pulled back significantly. Their short sighted remedy was to eliminate thousands at the bottom. They have an army of attorney's just sitting in the shadows waiting for any backlash by workers who wish to sue them for wrongful termination or age discrimination.
I was laid off in June, by MIT, yet required to remain on until August, as hundreds, possibly thousands, but you won't ever see the ugly details in bold printed headlines, as it should. It was one of the worst experiences of my life. It would have been better to have cleaned out my desk the same day. Depending how long you worked there, you would have to remain anywhere from 2-6 months after receiving notice of job elimination, only to be replaced by a younger worker with a higher degree. They alter a new job description and call it fair business practice. HR promises transfers to fiscally sounder dept's, only to find out it's another ruse. They delay interviews and make excuses until your time is up so they don't have to keep you around at the same pay rate. Months go by, you never hear a word until they are desperate for a seasoned staff assistant who they think will come back as a temporary worker. I was asked to return on a day's notice without discussion of salary or job description. When I pressed on, HR rep said it was less hours, for less pay and no time frame as to when they would hire permanent. The rep called back the next day and I told them I wasn't interested in returning to a place that laid me off months ago, only to hire me back as a temp.
I've written to my senator and congressman about my bad experience and unfair treatment by my former employer, MIT, such a high regarded institution, right. I hope they do tax these universities who kick their employees out the door based on their so called "need to save money", more like an excuse to save their own worthless overpaid jobs and ability to hire their alumni sons and daughters who can't find work elsewhere. We know how they spend it on those in higher positions, taking the all expense trips around the world on the endowments tab. I don't think I could ever work for a university again after the way I have been treated, or how they treated fellow co-workers, some just a few years away from retirement, one a cancer survivor, another recovering from surgery only to be told she was laid off. These are not human beings--they are monsters.
Wrinkles:
It would take a heart of stone not to laugh.
But seriously, isn't the AG or Secretary of State supposed to investigate gross mismanagement of charitable funds? To me, it looks like there should be a state investigation into the malfeasance at Harvard surrounding the endowment. But, I won't hold my breath...
trueendurance:
This is what happens when hubris is making the decisions.
This is also why the economy melted down.
The insiders at Harvard thought they were infalible. They thought they knew everything.
Now millions suffer.... Millions of jobless, millions of homeless, millions of helpless....
Congratulations to the princes at Harvard... I hope they choke on the bonuses they've given themselves. I hope it brings them missery.
guardianangel8:
rsox7002,"This Globe article is bias as usual. The Globe has decided to be sexist becuase it is popular. No where in this article did i see evidence that Summers was at Harvard when the fall happened".--
In Sept. 2001, Rose resigned after deciding he could no longer subordinate his judgment to others at the company, and he sent a four-page memo to then-University President Lawrence H. Summers outlining his concerns, causing the University to hire an external legal counsel to investigate. But whether the move led to substantive changes in Harvard's investment policies remains unclear.
THE ROAD TO HELL'
In an Oct. 2001 letter responding to Rose's concerns, Summers wrote that he took the issues "very seriously" and that Harvard was hiring an independent counsel to ensure that Harvard maintained "the highest level of legal and ethical compliance."
Jerome Kurtz, the independent attorney retained by Harvard to investigate the HMC practices and a former Internal Revenue Service commissioner, said he does not recall Rose or his concerns, though "that doesn't mean it didn't happen." He added that he only remembers being hired to examine compensation arrangements with some of the investment managers, though he verified that signatures on correspondence with Rose regarding the concerns were indeed his.
Shortly after his resignation, Rose said he became increasingly concerned that Harvard may have had ethically questionable ties to Enron, which went bankrupt in late 2001. Herbert S. Winokur '65 served both on the secretive Harvard Corporation and on Enron's board of directors, a dual commitment that Rose said he found disconcerting. He also found ethically troubling Harvard's 49 percent ownership interest in former Enron affiliate Cook Inlet Energy Supply-which he said made substantial profits from the debilitating California energy crisis of 2000 and 2001.
http://www.thecrimson.com/article/2009/4/23/hmc-tax-concerns-aided-federal-inquiries/
|
|
|
Nov. 23, 2009 | Bloomberg.com
...These big New York banks, especially Goldman, claim they owe the taxpayers little, they weren't the ones rescued, and any money forced upon them was promptly repaid.
Taxpayer Bailout
Rubbish. Federal Reserve Chairman Ben S. Bernanke, former Treasury Secretary Henry Paulson and his successor, Geithner, by tapping the American taxpayer to the tune of trillions, rescued the U.S. economy from the abyss. If we'd gone over the cliff, would Blankfein and Dimon be sitting in their comfortable executive suites today?
The public isn't confused. Almost two-thirds of Americans, in a recent Time magazine poll, say Wall Street executive pay is completely out of sync, and more than seven in 10 want the government to limit this compensation.
It infuriated people when Blankfein, 55, said this month in an interview with the Sunday Times of London that Goldman Sachs is "doing God's work." In March, the usually smoother Dimon, 53, assailed politicians for populist rhetoric, saying government officials have to stop the "vilification of corporate America."
Actually, the public thinks the government has been too soft on Wall Street. Blankfein and Dimon should test-market their views about God's work or populist demagoguery on a jobless welder in Steubenville, Ohio. If he's angry now, when his town has an unemployment rate of more than 13 percent, imagine the rage if Wall Street pays out record bonuses at year's-end.
'Marie Antoinette'
"Marie Antoinette would be embarrassed by these guys," says Nell Minow, the irrepressible shareholder advocate and corporate-compensation watchdog who is co-founder of the Portland, Maine-based Corporate Library. "They have no clue as to how much they've devalued the brand of American capitalism with this sense of entitlement, the arrogance; they genuinely feel the world will come to an end if they don't take everything."
I'm picking on Goldman and JPMorgan because they are the cr'eme de la cr'eme of global corporations. Goldman is the most renowned financial firm of the past half-century, producing a remarkable array of leaders that includes former Treasury Secretaries Robert Rubin (arguably the most successful in that post since Alexander Hamilton) and Paulson.
'Omaha Beach'
Blankfein, whom I've never met, seems like a fellow with good values. In 2008, with the world economy teetering, a group of Goldman executives took a limousine for a crucial meeting at the New York Federal Reserve. One executive said he couldn't take any more tension. "You're getting out of a Mercedes to go to the Federal Reserve," Blankfein replied, as described in an account in the New Yorker magazine. "You're not getting out of a Higgins Boat on Omaha Beach."
Dimon may be America's CEO. He was publicly ousted and humiliated by his mentor, Citigroup Inc. CEO Sanford Weill, a decade ago. He came back at Bank One Corp. and then JPMorgan, fashioning a legacy that far outshines Weill's, who created a company that was both too big to fail and to succeed.
"I love Jamie Dimon, he's the best; at Bank One he borrowed money to buy company stock," Minow says. "But on these bonuses he just doesn't get it."
Suppose these two smart men, instead of handing out record payouts, decided to use only one-third of this pot for bonuses, with a disproportionate share going to less-affluent employees. Another third would be invested in small businesses in struggling communities, five- or ten-fold what Goldman announced last week. The final third would be given to charities, like the Local Initiatives Support Corp. or helping kids of the jobless get swine flu shots.
Goldman and JPMorgan would continue to flourish; they aren't going to lose a lot of talent by cutting still lavish bonuses. And Blankfein and Dimon might join Iacocca in that rarified air of revered chief executives.
|
|
|
November 24, 2009 | Economists for Firing Larry Summers
This from Vanity Fair:
Summers has plenty of other things figured out as well, including the origins of the current financial crisis, for which he has crafted a cogent explanation worthy of his reputation as a policy wonk and his days as a college debating champion at M.I.T. "I think crises like this get made by multiple cascading misjudgments," he explains, and then catalogues them: too much government spending, not enough private-sector saving, too much dependence on foreign debt, too much demand for "riskless" financial instruments that weren't, in fact, riskless …
The first three of these were, at best, only tangentially related. As much as I think the Bush tax cuts were a mistake, Republican inability to balance the budget really did not have anything to do with the crisis. Ditto for Private-sector saving (even though i think saving is good, generally...) Dependence on foreign debt had nothing to do with the crisis.Then there is this:
There were also charges of betrayal from Iris Mack, a former derivatives specialist at the Harvard Management Company (responsible for investing Harvard's endowment) and the second black woman to receive a doctorate in applied mathematics at Harvard. Mack claims that soon after she started working at Harvard Management, in early 2002-after a stint at Enron-she became uncomfortable with the lack of understanding she thought her colleagues had with the risky derivatives they were investing in. (She was proved correct in the past fiscal year, when the endowment dropped 27.3 percent.) On May 12, 2002, she wrote an e-mail to Summers, alerting him to her concerns: "As a proud Harvard alum I am deeply troubled and surprised by what I have been exposed to thus far at HMC, and the potential consequences for my alma mater's endowment. In addition, I strongly believe that if my fellow alum[s] knew how the endowment is being managed and the caliber of some of the portfolio managers, they probably would not give another dime to our endowment."She asked Summers for a meeting and that he keep the correspondence between them confidential, "especially due to th[e] fact that several individuals have been terminated from HMC when they raised concerns about such issues." Nine days later, Mack got an e-mail from Marne Levine, Summers's chief of staff at Harvard (and now his chief of staff at the National Economic Council), asking Mack to contact her and assuring her that the initial e-mail "remains confidential."
But not for long. A month later, she was confronted by Jack Meyer, then head of H.M.C., who had copies of her correspondence with Summers and Levine. Meyer fired her the next day. She has since reached a confidential settlement with Harvard that she won't discuss. But she is unequivocal about one thing. "I would say that there is 99.9999999999999999 percent probability that Summers had a hand in my departure," she wrote me in an e-mail. (Summers replies he had nothing to do with her firing and could not, because she did not work for or report to him. "[Mack's] allegations were the subject of thorough internal and external reviews and found to be without merit," says a Harvard spokesman.)
I'd already heard (and posted) about this, but don't remember posting this part of the story... The rest of the Vanity Fair piece is garbage, as you would expect.Posted by Thorstein Veblen at 12:49 AM
Anonymous:
- Summers is a credentialed stooge stuck in a FIRE economy world-view. Larry, if you're reading, here are some other things you might want to consider.
1) Introduction of Japanese ZIRP in the mid-90's starting a massive carry trade; this set a lot of things in motion. Mercantilist currency policies in the Far East - dollar pegs, managed currency rates, etc.
2) The Fed orchestrating a bailing out LTCM and providing monetary conditions supporting the late 90's stock bubble. Too low interest rates for too long after the 2000 bust driving, among other things, a reach for yield (and risk).
3) A pathological fear of recessions on the part of this country's leadership. Let's guarantee further imbalances and deeper hole for the future to avoid some pain now. Recessions are part of a capitalist system – get over it.
4) A government sanctioned push for home ownership. Many new entrants did not know what they were getting into and were not ready. GSE standards were altered (lowered) to facilitate purchases by otherwise unqualified buyers.
5) A failure of effective financial regulation. Too much to elaborate on here.
6) Conflicted ratings from Moody's, S&P and Fitch.
- November 24, 2009 4:39 AM
- Finally, a site-specific discussion about a key figure, whose footprints can be traced back to the beginning. His handprints were on the back of Brooksley Born when she raised concerns about derivatives, too. Is he a misogynist?
- November 24, 2009 10:24 AM
That Guy:
- Thank you and Thank you! Don't let up on the chief perpetrators/enablers of this historic theft!
- November 24, 2009 11:17 AM
Alan:
- The Fed is trying to increase the money supply, they just don't know how it's done. The money multiplier is supposed to mean that capital in the banks splits 8-to-1. Instead capital in the banks has been building up.
I believe it is true that M0 is actually greater than M1 at this time. Absent action on incomes, it's all downhill from here.
|
|
|
November 8, 2009 | Washington PostWhy won't Obama give you a job?
The White House thinks the stimulus is working, and it doesn't want you on its payrollTo hear President Obama tell it, he's been busy creating jobs since taking office. The $787 billion stimulus package, he said last winter, would "save or create 3.5 million jobs." The White House is touting reports from recipients of stimulus funds asserting that they have created or saved 640,000 jobs so far.
Yet the national unemployment rate has now hit 10.2 percent, helping explain why Republicans won the governors' races in Virginia and New Jersey last week, just a year after the party's 2008 drubbing. And Obama declared Friday that more action is needed.
"History tells us that job growth always lags behind economic growth, which is why we have to continue to pursue measures that will create new jobs," he said. "And I can promise you that I won't let up until the Americans who want to find work can find work."
It was a strong vow, but it raises a question: Why has a White House that talks so much about boosting employment steered clear of the most direct strategy that could keep Americans on the job?
Since taking office, the Obama administration has studiously avoided paying people to go to work, which could be accomplished by subsidizing workers' private-sector employment or by creating new government-paid jobs. There are programs in a handful of states that financially compensate employees who cut their hours to prevent broader layoffs at their companies -- an approach that costs relatively little, since it results in lower payouts of unemployment benefits, and that has helped Germany keep unemployment under 8 percent despite the deep slowdown there. But the Obama administration has so far opted not to expand this initiative. And aside from a small summer employment program for young people, it has not sought to create jobs on the public payroll, something the country did in the 1930s and 1970s.
Instead Obama's team has taken a more indirect approach, a prudence that critics on the left say is misplaced. If you're spending hundreds of billions of dollars on stimulus, why not do it with conviction? Engaging in more forthright job creation could invite some political pitfalls (such as those constant accusations of socialism), but is double-digit unemployment any less a political risk?
The administration is "scared of [any plans] seeming like old-fashioned make-work, but that's what it is: You're giving [people] jobs because they have nothing left to do," said Dean Baker, co-director of the Center for Economic and Policy Research, a left-leaning think thank. "Giving people a shot at a job has to be worth a little bad publicity . . . but as in a lot of areas, they proved more cautious."
White House officials express confidence in the steps taken, saying the stimulus is spending money and creating jobs ahead of schedule, and forestalling far higher unemployment. They say they opted against direct jobs programs not for political reasons but because they thought such efforts would not produce long-term value. And they have not pushed the private-sector job-sharing idea -- being promoted by Sen. Jack Reed (D-R.I.) -- because they want to build real demand for workers, not just spread work among more people.
"I think we got the Recovery Act right," Larry Summers, the president's chief economic adviser, said in an interview. "The primary objective of our policy is having more work done, more product produced and more people earning more income. It may be desirable to have a given amount of work shared among more people. But that's not as desirable as expanding the total amount of work."
Two-thirds of the stimulus went toward tax cuts, fiscal aid to states, and expanded unemployment benefits and food stamps. These efforts helped cushion the recession's blow, saved public jobs and, by injecting demand into the economy, bolstered employment indirectly. On Thursday, Congress buttressed these efforts with an extension of unemployment benefits and an expansion of the tax credit for homebuyers.
The remaining third of the stimulus, however, was expected to be the real jobs generator: $250 billion for infrastructure -- roads, transit, water treatment -- and for investments in energy efficiency, broadband access and other areas. But it is becoming clear that much of that spending is not producing many new jobs. Highway funds have put repaving crews to work, but $6.5 billion flowing to states and cities for energy projects has only just arrived and has created virtually no private-sector jobs yet.
The jobs impact is also paltry so far for the $3 billion in National Science Foundation grants and the $10 billion for the National Institutes of Health. And much of the $19 billion for health information technology will not be spent until 2011.
Administration officials argue that these investments, if done right, will lay the groundwork for growth for years to come. And they say that given the depth of the recession, it's hardly a bad thing for the stimulus to deliver some punch a year or two from now. "We always recognized that America's problems were not created in a week or a month or a year and that they were not going to be solved quickly," Summers said. "We designed the Recovery Act to ramp up over time, through 2010, and to make sure that the investments we made were important for the country's future."
In addition, public-works programs take longer to get started than people realize, officials say. At a recent event at American University, White House economic adviser Jared Bernstein was challenged by economics professor Robert Lerman about direct job creation. Bernstein responded that there weren't enough public works projects ready to be launched: "What [governors] were describing as shovel-ready wasn't really shovel-ready."
None of this persuades the critics, who also argue that the White House, facing a skeptical Senate, settled on too small a stimulus package to begin with. Long as the downturn may be, the need is greatest now, and they have difficulty accepting that a new jobs program would not move faster than the money now percolating through the system. "The administration might have put a higher priority on more labor-intensive spending and spending that had a more immediate employment effect," said former labor secretary Robert Reich. "Basic research into photovoltaic cells is an important public investment, but it doesn't have many jobs attached to it, or certainly not anytime soon."
Others question the claim that more infrastructure spending would have been too slow. U.S. Steel chief executive John Surma noted recently that China is rapidly spending $586 billion on its own stimulus, much of it for big public works projects. The United States has plenty of infrastructure demands and should be able to get such projects going quickly, he said, and the inability to do so is an "indictment" of America's lack of a strategy for public investment.
"It's a defeatist policy to say that we don't know how to spend money on infrastructure," he said. "Stimulus is great, but we have far too little going into projects that actually put people to work."
Still others argue that there is plenty of direct job creation that could be done, short of heavy infrastructure, that could have lasting value. The liberal Economic Policy Institute has drafted a plan that, along with a new business tax credit for hiring that the White House is already considering, includes a pure public jobs proposal: giving money to states and cities to hire people to paint schools, board up vacant homes, staff child-care centers and reopen library branches. Workers would be paid the market wage. It would cost $35 billion for a year, not much more than the combined price tag for the homebuyers' tax credit and the $250 checks that Obama has proposed sending to Social Security recipients.
Lerman offers a variation: Pay people lower-than-market wages, maybe $8 an hour, and reserve the jobs for those who really can't find better work. Instead of extending unemployment benefits over and over, the government would help people develop job skills and would get something in return. He estimates the cost of 1 million jobs (including supervisors) at $30 million, or about $30,000 for each job created, compared with the $92,000 per job that the White House estimates its approach is costing.
And taxpayers would be able to see clearly that the spending was putting people to work -- instead of questioning, as many are now doing, the reliability of the job totals that the White House is attributing to the stimulus.
The country has a history with this sort of thing. Public investment in the New Deal got off to an underwhelming start. But the Works Progress Administration, launched in 1935, had a bigger impact, partly because it spent more freely -- drawing plenty of derision along the way. Less controversial was the Civilian Conservation Corps, which put men to work building trails, fighting forest fires and so on.
President Richard Nixon gave jobs programs another go in the doldrums of 1973-74 with the Comprehensive Employment and Training Act. But critics said states were just using the money to top off their budgets, and there were tales of abuse in some cities. President Jimmy Carter lowered the pay to make the jobs less likely to be doled out to friends and relatives. His assistant labor secretary, Arnie Packer, recalled last week that "we were able to see it in the statistics, the change in the employment rates for black males -- that's the targeting capacity that exists."
The program withered under President Ronald Reagan, who added prohibitions against public service employment (except for summer programs and natural disasters) that endure today. That the Obama administration shows little indication of lifting this taboo is a sign of how free-market tenets persist even when financial turmoil has called them into doubt, said John Russo, co-director of Youngstown State University's Center for Working-Class Studies.
"Neo-liberalism continues apace even though it's been thoroughly discredited," he said. The White House "has held back, and it has hurt. People were looking for a more aggressive approach; they did a political calculation and said, 'This is all we can do.' "
Conservative economists stand steadfast against any movement toward direct job creation. They concur with part of the liberal critique of the stimulus -- that much of the spending is going out too gradually, and in the wrong places, to be of use. But they strongly disagree that the government should have tried more direct efforts to create or retain jobs.
Jobs programs "sound so good in theory, but it just doesn't work that way," said Larry Lindsey, director of the National Economic Council under President George W. Bush. It would be better to stick with safety-net benefits for those most in need and to enact new tax cuts, such as a suspension of the payroll tax to encourage hiring. The New Deal jobs programs were less effective than memory holds, he said, a misperception he attributes to the government-funded writers and artists who depicted the work.
"A lot of what they did was a propaganda campaign," Lindsey said. "They hired the photographers to take the pictures and writers to write the story."
As it happens, an exhibit of New Deal-funded paintings is on display at the Smithsonian's Museum of American Art, with striking images of government-paid men shoveling snow and industrial machinery revving up. But don't expect to see any exhibits portraying the government's response to the Great Recession: The National Endowment for the Arts distributed its $50 million in stimulus funds to hundreds of arts groups and has no plans for direct payments to artists.
"It wasn't for any new programs," said NEA spokeswoman Victoria Hutter. "It's being spent, it's just not as visible" as the New Deal's programs.
But with unemployment into double digits, might not pictures of people heading to work have been a welcome sight?
Alec MacGillis is a reporter on the national staff of The Washington Post. He will be online to chat with readers Monday at 11 a.m. Submit your questions and comments before or during the discussion.
Selected Commants
biggerjake wrote:biggerjake:bqPhil:
The best quote I have heard about our situation is; we have traded away good wages in this country for easy credit. The deliberate destruction of unions, the exporting of American jobs, outsourcing, H1B visas, immigration policy, illegal immigration, etc. have all put such downward pressure on wages that a normal working class family can no longer join the middle class. Since congress couldn't do much about wages, they tried to do something to shore up working families.
Acorn is socialist because….? Because they try to help and register to vote the most marginalized people in our society? That sounds more like democracy to me; one person, one vote.
And Barney Frank is socialist because…? Because he supported legislation that made it easier for people to get loans? Come on! No one truly capable of critical thinking is buying that!
'Living standards not keeping pace with productivity
"The median household income rose just 1.6% between 2001 and 2004 … compared to an 11.7% rise in productivity. Workers aren't reaping the rewards of their labor: real wages are trailing productivity gains because profits are taking the lion's share of economic growth Growth in net worth has been equally lackluster, nudging up 1.5%
Even this slight gain has been unevenly distributed because it stems entirely from a run-up in housing prices. The central role played by residential property, which constituted 39% of total assets in 2004 (up from 32% in 2001), means that families are increasingly vulnerable to a downturn in housing prices.'
http://bigpicture.typepad.com/comments/2006/03/economic_dispar.html
'The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.
Prof. Emmanuel Saez, the University of California, Berkeley, economist who analyzed the Internal Revenue Service data with Prof. Thomas Piketty of the Paris School of Economics, said such growing disparities were significant in terms of social and political stability.
"If the economy is growing but only a few are enjoying the benefits, it goes to our sense of fairness," Professor Saez said. "It can have important political consequences."'
http://www.nytimes.com/2007/03/29/business/29tax.html
Translation: It will be different after the revolution.
Even if you don't want to help the disenfranchised, it might be preferable to anarchy…
DrPepper1:The people spouting the socialist, communist blather can be divided into two groups:
1. The Manipulators
These are the people who have a financial stake in keeping the status quo. They don't want to see taxes increase on people who may over $500,000 per year. They know that if everyone actually knew, understood and accepted the truth, there would be a lot more people pissed off about the growing financial inequality in this country.
2. The Manipulatees
These are the people who have been fed the lies for so long that they believe what they are told. They believe in "trickle down" economics, they believe if something is good for the rich it is good for everyone. These are the people who are so strongly focused on the social issues like abortion and gay rights, that they are willing to vote against their own self interest.
The famous Yale economist Robert Schiller has said that if the economic disparity continues to worsen in this country as it has for the last 30 years, we will soon have a country that even the rich don't want to live in.
He is on record as saying that this whole bailout/bonuses/Wall Street/banking crisis would spur a national dialogue about stopping this trend and getting back to the idea that "we are all in this together." To those who call this socialist or communist he says this is what it will take to preserve our capitalist system. Otherwise, there will be a build up of the type of resentment that eventually creates revolutions.
This is from a guy that accurately predicted the recent housing bubble crisis AND the ensuing world financial crisis.
So, which would you rather have; less economic disparity or revolution?
Download GPS Podcast 11/01/09, CNN, Fareed Zakaria and listen to what Schiller and Martin Wolf from the Financial Times have to say.
There is no way to fact check the Obama claim of jobs created. The basis of their calculations are suspect and circumstancial. I don't know how the stimulus money counts jobs created in other states, but in Oregon they count a job created if one person works for at least one hour and is paid with stimulus money. The average "job" creation lasts for some 37 hours. So in the calculations for job creation are mostly jobs lasting less that one week. While many of these people are probably glad to get any work, I would not count these as a job created, just part time, one time work is not a real job in my thinking.
Obama is a real political animal. Note that the biggest push for jobs will be near the 2010 elections. Politics first, people last. Compasionate, transparent, change, bull....! This is just thug style politics learned Chicago style. Also notice that the house health care bill won't go into effect until after the 2012 elections. However the taxpayers will begin paying for the health care bill in 2010. What a sweet deal for Obama politics. It's all liberal democratic politics, brutal and uncompassionate for the public, especially the seniors.
Some of Obama's advisiors have written about health care and consider the very young and elderly to be too costly and a poor investment of health care and money. That's why some 400+ billion dollars are being taken from Medicare to pay for the health care bill. Also the Medicare Advantage program will be stopped. But never mind, AARP will sell you a medigap insurance policy. That is their payment for supporting the Obama care. The AMA was given relief from the 21% cut in doctor payments from Medicare that has acculumated over the years but not enforced. Political payoff, political threats, political blackmail. The information about this bill being deficit neutral is a lie.
Pelosi forced the CBO not to count some 1.2 trillion in expenses.
If you have a job try to hang on to it until we can get this oration: http://www.pbs.org/wgbh/pages/frontline/warning/ scheduled to debut next Tuesday, is not likely to provide any assistance in the "reputation rebuilding" effort by former Fed Chairman Alan Greenspan whose comments yesterday regarding "too big to fail" might be seen in a whole new light given new revelations from the late-1990s about regulation of derivatives.
HopeForAmerica:
What!? I thought our government at least for right now, employs the largest number of people. And if you log on to USAJobs.gov; there are plenty of gov't jobs there!! We need more private investment. Banks are afraid to loosen their purse strings, and businesses are not ready to expand means no new jobs.
The stimulus Did save and create jobs. The reprecussions of the Republican party over the past (8) years was So Severe We're STILL reeling from it's jabs, trying to catch our balance, and licking our wounds. And if you recall, initially the Democrats had more measures which would have created more jobs but was ridiculed by the republicans.
Pictured above with former Treasury Secretary and Goldman Sachs alum Robert Rubin, this duo constituted two-thirds of the "Committee to Save the World" (along with top Obama administration economic adviser Larry Summers), a call that, in retrospect, may have been a bit premature.
Brooksley Born:
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission (CFTC) -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"This should be good, particularly in light of the fact that there has been virtually no progress on any financial market reforms, despite continuing calls from the likes of Paul Volcker.
In The Warning, airing Tuesday, Oct. 20, 2009, at 9 P.M. ET on PBS (check local listings), veteran FRONTLINE producer Michael Kirk (Inside the Meltdown, Breaking the Bank) unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman AlanGreenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."
|
|
|
June 26, 2009
Posted by TraderMark
Let me preface this piece by saying (a) it's long but hopefully educational and (b) I am not picking
political sides; both major parties are complete poison to the US and really not very different at all
once you strip them down to the base. With that....
Some say we romanticize Paul Volcker - the last Federal Reserve Chief who apparently has an idea that
money does not grow on trees - and he is not "all that". I don't know - everything I've seen from him
the past year, and much of my reading of him in the past comes from a place of common sense, yet in
a very capitalistic sense. He cannot be accused of being "one of those Europeans!" (codeword for socialist)
yet believes in a firm regulatory stance that is based on common sense. Back in April 2008 in [Apr
9, 2008: Paul Volcker Speaks]
In a speech on Tuesday, Paul A. Volcker, the imposing former Fed chief who felled the runaway inflation of the 1980s, chided the current chairman, Ben S. Bernanke, for toeing "the very edge" of the bank's legal authority in orchestrating last month's bailout of the beleaguered investment bank Bear Stearns.
"Out of perceived necessity, sweeping powers have been exercised in a manner that is neither natural nor comfortable for a central bank," Mr. Volcker told members of the Economic Club of New York.
His remarks came on the same day that Alan Greenspan, Mr. Bernanke's immediate predecessor as chairman, deflected criticism of his tenure in an interview with The Wall Street Journal, dismissing as "unfair" claims that his policies stoked an untenable housing bubble.
Indeed, Mr. Volcker also implicitly questioned Mr. Greenspan's cheerleading of the "bright new financial system," that "for all its talented participants, for all its rich rewards, has failed the test of the marketplace."Straight talk. Something I admire... keep in mind all that was said after Bear Stearns but before all the rest of the interventions and government/Fed handouts. I really had high hopes when Volcker was included in Obama's team. Unfortunately we quickly discovered Volcker is more like the 25th man on a baseball team. Eye candy really.
Mr. Volcker also argued Tuesday that the Fed's strenuous efforts on behalf of the housing market risked looking "biased to favor particular institutions or politically sensitive constituencies," in this case the housing industry.
But the Fed has a particular duty to defend the integrity of the "fiat currency" in its charge. And exchanging dollars for "mortgage-backed securities of questionable pedigree" both raises the specter of moral hazard and potentially undermines the world's faith in the integrity of the Fed's balance sheet.
We quickly found out Summers was freezing out Volcker - heck Volcker
was already lost at sea
by March!
Summers isn't regularly inviting Volcker to White House meetings and hasn't shown interest in collaborating on policy or sharing potential solutions to the economic crisis, they said.We weren't the only ones to notice [Mar 6, 2009: Where is Paul Volcker?] By April we found out Volcker had not even met once with Obama in the past month [Apr 11, 2009: Paul Volcker Assumes Smaller than Expected Role with Obama]
"He did a lot of things, in all his different roles serving the public, knowing that he'd be criticized. He has never flinched. He doesn't flinch because he's a man of utter conviction and absolute integrity."
|
|
|
Democratic Underground
Agreed. Geithner and Summers have some secrets...
F. W. ENGDAHL: GEITHER's DIRTY LITTLE SECRET....
In 2000 the Clinton Administration then-Treasury Secretary was a man named Larry Summers. Summers had just been promoted from No. 2 under Wall Street Goldman Sachs banker Robert Rubin to be No. 1 when Rubin left Washington to take up the post of Vice Chairman of Citigroup. As I describe in detail in my new
book, Power of Money: The Rise and Fall of the American Century, to be released this summer, Summers convinced President Bill Clinton to sign several Republican bills into law which opened the floodgates for banks to abuse their powers. The fact that the Wall Street big banks spent some $5 billion in lobbying for these changes after 1998 was likely not lost on Clinton.One significant law was the repeal of the 1933 Depression-era Glass-Steagall Act that prohibited mergers of commercial banks, insurance companies and brokerage firms like Merrill Lynch or Goldman Sachs. A second law backed by Treasury Secretary Summers in 2000 was an obscure but deadly important Commodity Futures Modernization Act of 2000. That law prevented the responsible US Government regulatory agency,
Commodity Futures Trading Corporation (CFTC), from having any oversight over the trading of financial derivatives. The new CFMA law stipulated that so-called Over-the-Counter (OTC) derivatives like Credit Default Swaps, such as those involved in the AIG insurance disaster, (which investor Warren Buffett once called 'weapons of mass financial destruction'), be free from Government regulation.At the time Summers was busy opening the floodgates of financial abuse for the Wall Street Money Trust, his
assistant was none other than Tim Geithner, the man who today is US Treasury Secretary. Today, Geithner's old boss, Larry Summers, is President Obama's chief economic adviser, as head of the White House Economic Council. To have Geithner and Summers responsible for cleaning up the financial mess is tantamount to putting the proverbial fox in to guard the henhouse.The 'Dirty Little Secret'
What Geithner does not want the public to understand, his 'dirty little secret' is that the repeal of Glass-Steagall and the passage of the Commodity Futures Modernization Act in 2000 allowed the creation of a tiny handful of banks that would virtually monopolize key parts of the global 'off-balance sheet' or Over-The-Counter derivatives issuance.
Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency's Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default.
The five are, in declining order of importance: JPMorgan Chase which holds a staggering $88 trillion in derivatives (€66 trillion!). Morgan Chase is followed by Bank of America with $38 trillion in derivatives, and Citibank with $32 trillion. Number four in the derivatives sweepstakes is Goldman Sachs with a 'mere' $30 trillion in derivatives.
Number five, the merged Wells Fargo -Wachovia Bank, drops dramatically in size to $5 trillion. Number six, Britain's HSBC Bank USA has $3.7 trillion.
After that the size of US bank exposure to these explosive off-balance-sheet unregulated derivative obligations falls off dramatically. Just to underscore the magnitude, trillion is written 1,000,000,000,000. Continuing to pour taxpayer money into these five banks without changing their operating system, is tantamount to treating an alcoholic with unlimited free booze.
The Government bailouts of AIG to over $180 billion to date has primarily gone to pay off AIG's Credit Default Swap obligations to counterparty gamblers Goldman Sachs, Citibank, JP Morgan Chase, Bank of America, the banks who believe they are 'too big to fail.' In effect, these five institutions today believe they are so large that they can dictate the policy of the Federal Government. Some have called it a bankers' coup d'etat. It definitely is not healthy.
This is Geithner's and Wall Street's Dirty Little Secret that they desperately try to hide because it would focus voter attention on real solutions. The Federal Government has long had laws in place to deal with insolvent banks. The FDIC places the bank into receivership, its assets and liabilities are sorted out by independent audit. The irresponsible management is purged, stockholders lose and the purged bank is eventually split into smaller units and when healthy, sold to the public. The power of the five mega banks to blackmail the entire nation would thereby be cut down to size. Ooohh.
Uh Huh?This is what Wall Street and Geithner are frantically trying to prevent. The problem is concentrated in these five large banks. The financial cancer must be isolated and contained by Federal agency in order for the host, the real economy, to return to healthy function.
This is what must be put into bankruptcy receivership, or nationalization. Every hour the Obama Administration delays that, and refuses to demand full independent government audit of the true solvency or insolvency of these five or so banks, inevitably costs to the US and to the world economy will snowball as derivatives losses explode. That is pre-programmed as worsening economic recession mean corporate
bankruptcies are rising, home mortgage defaults are exploding, unemployment is shooting up. This is a situation that is deliberately being allowed to run out of (responsible Government) control by Treasury Secretary Geithner, Summers and ultimately the President, whether or not he has taken the time to grasp what is at stake.Once the five problem banks have been put into isolation by the FDIC and the Treasury, the Administration must introduce legislation to immediately repeal the Larry Summers bank deregulation including restore Glass-Steagall and repeal the Commodity Futures Modernization Act of 2000 that allowed the present criminal abuse of the banking trust. Then serious financial reform can begin to be discussed, starting with steps to 'federalize' the Federal Reserve and take the power of money out of the hands of private bankers such as JP
Morgan Chase, Citibank or Goldman Sachs.
|
|
|
July 27, 2009 | The Bond Tangent
There is an interesting article by Nina Munk, Rich Harvard, Poor Harvard, in Vanity Fair suggesting that Larry Summers mismanaged the institution into a state of calamity. I am somewhat predisposed to accept this argument on its face because I think Summers is an egomaniacal, chauvinist cad whom the Navy should deposit on a deserted island far away for the good of all humanity. Alas, Munk employs a more balanced approach to making her point, as evidenced by the fact that she can discuss Summers at length and only drop the f-bomb once.
Munk lists multiple reasons for Harvard's decline that are all ultimately attributed to Summers' delusions of grandeur, and which have created a perfect storm of sorts for the university:
- increased spending, especially on a massive capital construction program, based on the assumption that Harvard's endowment would continue to outperform forever;
- an investment philosophy involving aggressive risk-taking; and
- the gradual alienation of financial talent.
I would agree that Harvard has been mismanaged for these reasons, but what the article misses is that this behavior is hardly unique to Harvard, and some of the assertions made in the article are based on things that have been completely blown out of proportion by the financial press and blogosphere. (I am thinking primarily of Harvard's interest rate swap "crisis." The fact that so many people consider Harvard's swap termination payments a travesty of Summers' rule only goes to show you how little people understand the bond market and what actually happened in late 2008.)
With respect to the university over-building its campus, Munk writes:
Consider this: Over the 20-year period from 1980 to 2000, Harvard University added nearly 3.2 million square feet of new space to its campus. But that's nothing compared with the extravagance that followed. So far this decade, from 2000 through 2008, Harvard has added another 6.2 million square feet of new space, roughly equal to the total number of square feet occupied by the Pentagon. All across campus, one after another, new academic buildings have shot up. The price of these optimistic new projects: a breathtaking $4.3 billion.Harvard is hardly alone in the ambitious scope of its capital construction program. I think campus construction is a bubble not unlike what emerged in the residential real estate market, and it has been fed by the same forces. Universities have had access to easy money for a long time due to historically low interest rates (and innovation) in the tax-exempt bond market, investment performance, and (for most universities, although not necessarily Harvard) students that can borrow excessively against their future earnings to extend their educations. (On account of the lavish amenities now available to students on university campuses, I've often joked with colleagues that universities have transitioned from being cathedrals of higher education to cathedrals of second infancies.) Like the mortgage on a McMansion, the bill eventually comes due.In Allston, a Boston neighborhood just across the Charles River from the school's main campus, you can view Harvard's billion-dollar hole in the ground, a vast construction pit. It's the foundation of Harvard's most ambitious project of all: the sprawling Allston Science Complex, once scheduled to be completed by 2011 at a cost of $1.2 billion-but now on hold.
It seems to me that Harvard arrived late to the facilities arms race with its Allston Campus, compared to other universities with proportionately similar development plans, perhaps because Harvard had to secure a considerable swath of land. And this is why Harvard is now the proud owner of a really, really expensive crater.
At any rate, Harvard has been sidelined by its investment performance for the moment. I expect most public institutions will eventually follow suit (absent an immaculate recovery) when stimulus dollars run out and states have not bounced back from their revenue shortfalls. As a hedge fund manager interviewed for Munk's article put it, "None of these schools has the ability to cut expenses fast enough... They are completely f-----."
There is some juicy discussion of the in-fights between Summers & Friends and the money machines that ran the university's endowment, primarily over compensation issues ("by the early 2000s, Harvard's top moneymen were making as much as $30 million to $40 million a year"), that culminates in Jack Meyer leaving the Harvard Management Company in 2005 and taking his brainy underlings with him, "decimating Harvard's trading floor." Apparently, being a money manager at Harvard now is almost as thankless and politically-charged as working at Calpers. (Kidding.) My favorite line from the article is from a portfolio manager who joined Harvard after the exodus: "It was 'like a Ferrari without the engine.'"
On the topic of risk, Munk draws a line between Meyer and his predecessor, Walter Cabot, who evidently preferred a much more traditional approach to investing. Upon his arrival in 1990,
Meyer and his team moved Harvard's money into all sorts of things: private equity, real estate, oil, gas, fixed-income arbitrage, timberland, hedge funds, high-tech start-ups, foreign equities, credit-default swaps, interest rate swaps, cross-currency swaps, commodities, venture-capital funds, junk bonds. As if all those exotic, illiquid investments weren't enough to amplify returns, Meyer added a heap of leverage.I've talked about this at length on this blog on a number of occasions. This is the "Yale Model" for investing, pioneered by David Swensen at Yale, which has become the new paradigm for many colleges and universities, pension funds, and pretty much every investor that fancies itself in theory not to have a time horizon. It is not unique to Harvard at all, and these groups are now (hopefully) learning a lesson about time horizons and cash flow.There has been much ado in the blogosphere about the derivatives Harvard used to hedge future debt issuance related to the development of the Allston Campus (see Felix Salmon here and here, Dr. Mankiw here, and The Epicurean Dealmaker here). I think most of these arguments are based on a populist distaste for derivatives in the wake of the financial crisis, which is not entirely unfounded but does betray a degree of naivete about what is involved in managing a portfolio of outstanding debt obligations and the financial administration of a major capital construction program. Basically, they argue that by entering into forward swap agreements to hedge interest rate risk, Harvard was not entering a hedge at all, but speculating on the future direction of interest rates.
I would submit to you, however, that under most circumstances, if an institution undertook a massive capital construction program that was mostly funded by debt and did not enter into forward swap agreements (or something similar) - that is to say, if the institution just left the future debt issuance as an unknown in its budget going forward - then it would be speculating on the direction of interest rates. I will confess that I am not personally familiar with all of the specifics of these transactions, but if it were simply a matter of establishing a fixed rate hedge for the issuance of future variable rate debt, this is not uncommon at all.
When Harvard went to market in December of last year (in the early stages of this blog), I scoffed at the idea that the university could maintain its AAA rating in spite of what were obviously catastrophic investment losses in its endowment and wondered in print about the magnitude of Harvard's termination payment. Again, I do not know for sure, but I would guess that Harvard's derivatives moved sharply out-of-the-money right before the university went to market and the university, uncertain as everyone else was if a Great Depression redux lurked around the corner, decided to take a massive hit and terminate the swaps before the mother-of-all-worst-case-scenarios obtained. The limitations the tax code places on the use of derivatives might also have left the university without much a choice at the time. A billion dollars does not seem right in terms of the loss (at the time the debt was issued, Bloomberg said that the university had swaps associated with $3.5 billion of debt), but the divergence between swap and bond rates (and the near collapse of the variable rate debt market) were absolutely insane at the time.
Why would they do this, both go to market and terminate the derivative agreements? The article seems to imply that Harvard was driven to the debt markets in late 2008 because its managers did not want to sell investments at fire-sale prices, but it is not like the university could issue long-term tax-exempt debt to offset its operating expenses, so I am not sure what the author is getting at here. I think some of the panic that prevailed at the time is lost here too. If you would have asked me then if Harvard had selected the worst possible time to go to market, I probably would have said that they were lucky to have the perceived creditworthiness to get some money in the bank when all hell was breaking loose.
I am surprised that the university did not realize before late 2008 that its expansion plans were not feasible and did not start to unwind the associated investments at that point, however. The university had a pretty decent glimpse months before it went to market that its investment losses were going to be steep. Hindsight, etc.
|
|
|
June 25th, 2009 | The Big Picture
"The biggest obstacle to Volcker's reform agenda is Summers"
There is a long article at Bloomberg very much worth reading about Tall Paul: Volcker Gets Less Than He Wants in Curbing Wall Street Excesses.
Consider the following:
"If Volcker is at one end of the spectrum arguing for tougher financial rules, Summers and Geithner are at the other. Summers pushed for deregulation while Treasury secretary under President Bill Clinton, advocating the repeal of the Glass- Steagall Act, which had separated investment and commercial banking for more than 60 years. Geithner was president of the Federal Reserve Bank of New York during a period when banks ratcheted up their leverage.
Both men are proteges of Robert Rubin, a former Clinton Treasury secretary who served on Citigroup Inc.'s board from 1999 until this year and has been criticized for allowing the bank to pile up $544 billion of derivatives and securities before it became the recipient of more government assistance than any other bank. Rubin declined to comment."
When it comes to regulatory reform, the Geithner Summers pairing are the phlegmatic duo.
And, they epitomize why Team Obama's economic legacy will likely amount to very little in terms of lasting change or significant legislation.
O may aspire to FDR's greatness and legacy, but it is wildly obvious that when it comes to either economics or financial regulations, O is no FDR.
What is it that Volcker wants?
- Impose capital requirements on trading parties, people familiar with his thinking say.
- Make bigger banks smaller
- Reduce the role of an overstretched Fed
- Force Derivatives to be traded on exchanges
- Transparent investor prices of Derivatives;
- More-aggressive capital reserve requirement
- Bigger role for exchanges.
Of course, major Wall Street banks, (such as JPM and Goldman Sachs) ALREADY sent a letter to the New York Fed supporting less supervised clearinghouse.
|
|
|
Fox Business
Federal Reserve chairman Ben Bernanke presents the Fed's semi-annual monetary-policy report on Capitol Hill today, the start of two-day hearings.
On tap will be the Fed's massive quantitative easing programs and the exit strategy out of them, a dicey proposition that analysts say ranks right up with the US's exit strategy out of Iraq.
But although Bernanke is winning kudos and praise for making brilliant moves to save the US economy, chatter on the cocktail party circuit in Washington, DC is that Bernanke may not get asked back as the world's most powerful central banker when his term expires in January 2010, due to a variety of reasons (see below).
Reasons that have caused 60% of House members to co-sponsor a new bill that would give the Government Accountability Office the right for the first time to inspect the central bank's books, its monetary policymaking, its lending and its connections with foreign central banks, all now off-limits to Congressional interference.
Word is that instead President Barack Obama may tap Lawrence Summers, director of the National Economic Council and former Treasury Secretary, as the next Federal Reserve chairman. Besides Summers, other potential options include San Francisco Fed president Janet Yellen, and former Fed vice chairmen Roger Ferguson and Alan Blinder.
But would Summers be the best choice to replace Bernanke as chairman of the US Federal Reserve?
Dig deeper into Summers' background, and you'll not only see that Summers is potentially so radioactive that the White House may not decide to put him up as a replacement for Bernanke, but why it did not even deign to choose him to be US Treasury secretary, picking Timothy Geithner instead, as Summers may not have survived a Congressional confirmation hearing.
Summers is widely praised as a top notch economist nonpareil, with innovative contributions to economic research in public finance, labor and macroeconomics. For one, Summers was a key backer of a cut in the capital gains tax rate, arguing such taxes were inefficient.
However, at minimum the criticisms about Summers–his prior positions on bank regulatory policies, notably derivatives, his conflicts of interest with Wall Street, his incendiary remarks–would make for volatile confirmation hearings.
And the case against Summers as Fed chairman is separate from a sense in Washington that Summers is simply too blunt and domineering, that he would condescend to Einstein if he could, as one analyst said, or that he is a self-made man who worships his own creator.
Below is a tip sheet on what to watch out for in this growing debate about Summers as the new Fed chair.
You'll find also key issues that affect your investment portfolio, the stock market, and the economy.
The tip sheet was compiled with the assistance of Fox News analyst James Farrell, a sharp financial analyst.
The question lawmakers are struggling with is this: are the following Fed actions done on Bernanke's watch enough to replace him?
That under Bernanke the Fed has blown out its balance sheet to more than $2 tn to bail out Wall Street and the banks; that the Fed is now more entangled in fiscal policy and subject to political pressures than ever before, threatening its cherished independence; that it used taxpayer money to make 100% whole the recklessly disastrous bets made by Wall Street firms in the AIG bailout, including Goldman Sachs; that the Fed gave $20 bn in taxpayer money without conditions to Bank of America to buy Merrill Lynch, after chief exec Ken Lewis threatened to ditch the deal; and that Bernanke's own actions have raised questions over whether the Fed can be the systemic risk regulator when as Fed governor, for example, he agreed with Greenspan in keeping rates drastically low during the bubble years, inflating the bubble even more, or that he said subprime loans were not a problem before the credit crisis blew up in the summer of 2007.
Summers Soft on Derivatives Regulation
Derivatives have created a worldwide financial meltdown, a daisy chain of toxic paper that has zapped investment portfolios worldwide. These ticking time bonds have created havoc in governments from here to Europe to Russia to Asia.
What's gone unnoticed is that in the late '90s Summers did nothing to stop former Fed chair Alan Greenspan from pressuring US accounting rule makers to water down a proposed new derivatives accounting rule that may have helped stop the current crisis. Many business leaders had strongly opposed the new rule.
In fact, in 1998, Summers testified in Congress against regulating the derivatives market.
Derivatives, such as mortgage-backed bonds, are financial contracts whose values are linked to, or derived from, those of underlying assets such as bonds, stocks or commodities.
Ten years before the worst meltdown since the Great Depression, in the summer of 1997, Greenspan demanded that the Financial Accounting Standards Board weaken the new rule, which would have forced companies to book changes in the market value of their derivatives contracts. The FASB sets the rules for how companies report their profits.
Greenspan wanted the FASB to eliminate the profit adjustment and instead force only large companies to merely disclose the fair market value of their derivatives in supplements to their financial statements.
Greenspan said the new rule "may discourage prudent risk-management activities," would create "volatility" in bank capital levels and give an inaccurate picture of banks' financial conditions.
Greenspan's pressure came just three years after the business world had pressured the FASB to stop a new rule that would force companies to book for the first time the value of stock options as an expense.
Thanks to pressure from Greenspan and business executives, it took the FASB years more to pass the new rule.
In 1998, Summers also defended derivatives in testimony before Congress.
He said that Wall Street firms who make these trades "are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies and most of which are already subject to basic safety and soundness regulation under existing banking and securities laws."
Summers added that to "date there has been no clear evidence of a need for additional regulation of the institutional OTC [over the counter] derivatives market, and we would submit that proponents of such regulation must bear the burden of demonstrating that need."
(Summers might now very well conclude that the current financial mess has provided the "clear evidence" to support regulating derivatives, Farrell says).
Summers also threw down another obstacle to cracking down on the ticking time bonds that are derivatives when he said that any move to regulating derivatives by the Commodity Futures Trading Commission "ought to come with the legitimacy of a clear legislative mandate from Congress."
Summers Supported Repeal of Glass-Steagall
Market analysts, watchdogs, and members of Congress now argue that the repeal of Glass-Steagall in November 1999 also helped create the current Chernobyl-level meltdown on Wall Street and the collapse in the US economy.
Glass-Steagall is the Depression-era act enacted in 1933 which put up a firewall between commercial and investment banking. With its repeal deposit-taking banks for the first time could wade into the dicey securities business, putting deposits at risk.
Specifically, the repeal let commercial lenders such as Citigroup, once the largest US bank by assets that is now on government life support, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities, says the Journal of Economic Perspectives, an economic journal published by the American Economic Association.
Banks had lobbied for the repeal of Glass Steagall beginning in the '80s out of fear over the rising economic might of Japan–never mind that Japanese banks were notorious for, ironically, having razor-thin capital cushions (as US banks subsequently did). Japan's banks soon led the country into its economic collapse.
When President Bill Clinton signed the Financial Modernization bill in 1999, which effectively repealed Glass-Steagall, then-Secretary Summers stated:
"This is the culmination of years of effort by many, many people, reflects the work of presidents, Treasury officials, members of Congress, those in the private sector, from both parties, and dedicated professionals, both inside and outside the government. With their help, I believe we have all found the right framework for America's future financial system."
Summers' Wall Street Fees and Perks
Summers has met with withering fire for accepting lucrative fees and perks from Wall Street, which he has been and is now paid by the US taxpayer to regulate.
Summers has come under criticism for accepting perks from Citigroup, including free rides on its corporate jet in the summer of 2008 during the presidential election.
At the time an economic adviser to Democratic presidential candidate Obama, Summers reportedly got a free ride on a Citigroup jet in August 2008 while attending the Democratic National Convention in Denver.
Summers also earned decent fees from Wall Street in the year before he joined the White House and began helping to oversee the financial industry.
Specifically, the New York Times reported in April 2009 that Summers was paid millions of dollars in 2008 by Wall Street firms over which he would eventually exert regulatory power. Summers earned $5.2 mn from the hedge fund D. E. Shaw, and collected $2.7 mn in speaking fees from Wall Street companies that received government bailout money
The Times said that Summers reported in financial disclosure forms that he made "40 paid appearances, including a $135,000 speech to the investment firm Goldman Sachs, in addition to his earnings from the hedge fund, a sector the administration is trying to regulate." The report says he also "appeared before large Wall Street companies like Citigroup ($45,000), JPMorgan Chase ($67,500) and the now defunct Lehman Brothers ($67,500), according to his disclosure report."
Summers Pressured Congress to Stop Exec Pay Caps
According to the Wall Street Journal, Summers called Democratic Senator Chris Dodd, chair of the Senate Banking Committee, asking him to remove caps on executive pay at firms which have received bailout money, including Citigroup. Treasury secretary Geithner also called as well, the Journal says.
The White House was worried that the Senate's rules "would prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness."
The legislation restricted bonuses more severely than the Obama administration's pay limits, as it would have barred any company "receiving bailout funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses."
Summers' Role in the California Energy Crisis
Did Summers do anything to stop high-level pressure on then California governor Gray Davis to relax regulation of the energy markets during the 2000 energy crisis.
According to the book "Conspiracy of Fools: A True Story" by New York Times reporter Kurt Eichenwald (Random House, 2005), then Federal Reserve chairman Greenspan and Treasury Secretary Summers met with governor Davis on December 26, 2000 to discuss California's power crisis.
While Gray opened the meeting by stating that "if [energy] deregulation fails in California, it will fail in the United States," Greenspan and Summers disagreed.
"Truthfully, governor, California hasn't deregulated," the book quotes Greenspan as saying. "The state simply replaced one form of regulation with another. It's become a system of central planning run amok."
The book says Summers silently agreed, and then joined in. "You have a fixed price set by the state for selling electricity to the public. But you have a variable, floating price when you buy electricity," the book quotes Summers as saying.
"That's not sustainable," the book quotes Greenspan as saying. "The problem is your regulatory system. And there are a very limited number of solutions. But the first step is that prices for consumers are going to have to go up."
Davis showed no emotion, the book says. "I really feel the problem is the energy producers," he said. "They're manipulating the markets and forcing up prices."
"They may be," the book quotes Greenspan as saying. "But that's beside the point. That's not causing the problem; that's making it worse. The real problem is a supply-and-demand imbalance."
Summers Remarks About Aptitude of Women
Summers stepped down as president of Harvard University in 2006 after a no-confidence vote by the university's faculty. Among other things, Summers created a furor in a 2005 speech he gave in which he said that women's under-representation in the top levels of academia is due to a "different availability of aptitude at the high end."
In discussing why women may have been underrepresented "in tenured positions in science and engineering at top universities and research institutions," because Summers said his "best guess" was that "there are issues of intrinsic aptitude, and particularly of the variability of aptitude."
Summers said that this variation, combined with other factors, "probably explains a fair amount of this problem."
Although he later said his statements were an "attempt at provocation," Summers eventually apologized for his remarks and later stepped down in 2006.
"I was wrong to have spoken in a way that has resulted in an unintended signal of discouragement to talented girls and women," Summers said, later adding: "Despite reports to the contrary, I did not say, and I do not believe, that girls are intellectually less able than boys, or that women lack the ability to succeed at the highest levels of science."
Summers Opposed Infrastructure Spending?
Blogs on the Internet likely have this one wrong.
This controversy started when Democrat Rep. Peter DeFazio stated on MSNBC's The Rachel Maddow Show that "Larry Summers hates infrastructure and some of these other economists. They were very much part of creating the problem, and now, they are going to solve the problem. And they don't like infrastructure. So, they want to have a consumer-driven recovery."
Not quite.
Summers publicly advocated for infrastructure spending as part of a stimulus effort in Congressional testimony on September 9, 2008:
"There is a compelling case for significant new commitment to infrastructure spending. While infrastructure spending is often seen as operating only with significant lags, I have become convinced that properly designed infrastructure support can make a timely difference for the economy," Summers testified before Congress.
Summers added: "Evidence from the Minneapolis bridge collapse suggests that it is possible to launch infrastructure programs where the vast majority of the money is spent within a year…Properly designed infrastructure projects have the virtue of being helpful as short run stimulus, especially for the employment of the workers most hard hit by the housing decline, while at the same time augmenting the economy's productive potential in the long run."
Summers Fired a Harvard Whistleblower?
Despite what the blogosphere says, the evidence is thin that Summers while president of Harvard University made a controversial decision to fire a whistleblower worried about derivatives investments in the school's endowment.
In 2002, a new employee of the company that manages Harvard's endowment (Harvard Management), Iris Mack, wrote to Summers to express concern about the endowment's investments in derivatives. Mack had asked Summers to keep the communication confidential. Marne Levine, chief of staff for Summers, assured her that the communications would be kept confidential.
On July 1, 2002, Mack was called into a meeting by her boss, Jack Meyer, then the chief of Harvard Management. The next day Meyer fired her. Meyer told Mack that she was fired for making "baseless allegations against HMC to individuals outside of HMC."
When Mack threatened to sue for an unlawful firing, Harvard entered into a confidential settlement with her.
|
|
|
Michael Hirsh wonders why the Obama administration hasn't consulted Joe Stiglitz more often on economic policy issues, and suggests the answer is an ongoing feud with Larry Summers:
The Most Misunderstood Man in America, by Michael Hirsh, Newsweek:
...Even in the contentious world of economics, [Joe Stiglitz] is considered somewhat prickly. And while he may be a Nobel laureate, in Washington he's seen as just another economic critic-and not always a welcome one. Few Americans recognize his name... Yet Stiglitz's work is cited by more economists than anyone else's in the world... And when he goes abroad-to Europe, Asia, and Latin America-he is received like a superstar, a modern-day oracle. ...
... ... ...
... Stiglitz's defenders say one possible explanation for his outsider status in Washington is his ongoing rivalry with Summers. ... Since the early '90s, when Summers was a senior Treasury official and Stiglitz was on the Council of Economic Advisers, the two have engaged in fierce policy debates. The first fight was over the Clinton administration's efforts to pry open emerging financial markets, such as South Korea's. Stiglitz argued there wasn't good evidence that liberalizing poorly regulated Third World markets would make any one more prosperous; Summers wanted them open to U.S. firms.
The differences between them grew bitter in the late 1990s, when Stiglitz was chief economist for the World Bank and took issue with the way Treasury Secretary Robert Rubin, and Summers, who was then deputy secretary, were handling the Asian "contagion" financial collapse. After World Bank president James Wolfensohn declined to reappoint him in 1999, Stiglitz became convinced that Summers was behind the slight. Summers denies this...
Selected comments
Chris Rich says...I'm increasingly convinced that this is the outcome of a deal with the Clintons. Obama's economic team is mainly the Clinton government in exile with Volcker as a kind of garnish.
Maybe he was insecure over the inexperience accusations during the campaign.
My hope is he'll eventually get rid of them by mid term. Summers is still widely despised over at Harvard. Last month I was doing a paint job on the edge of the campus and overheard a facilities manager in a huddle with two contractors.
The manager was treating them to juicy details about Harvard presidents, past and present. The current one is liked but when talk turned to Summers the guy's voice dropped to a near whisper as if the trees were bugged.
Larry once made a complete pest of himself during a routine fire drill where he demanded to return to his office before the drill was finished in some spoiled brat outburst of exceptionalism.
The undergrad alumni is still seething over the aggressive risk investment policy Summers introduced after years of staid careful investing.
The outcome was a multi billion dollar endowment haircut and craters in lower Allston where there were supposed to be new buildings in a campus expansion.
|
|
|
November 24, 2008 | www.motherjones.com
On Monday, President-elect Barack Obama announced his economic team, noting that Lawrence Summers would be the director of his National Economic Council. In touting Summers, Obama praised the former treasury secretary for his work during the Clinton years
Larry helped guide us through several major international financial crises – and was a central architect of the policies that led to the longest economic expansion in American history, with record surpluses, rising family incomes and more than 20 million new jobs. He also championed a range of measures – from tax credits to enhanced lending programs to consumer financial protections – that greatly benefited middle income families.
As a thought leader, Larry has urged us to confront the problems of income inequality and the middle class squeeze, consistently arguing that the key to a strong economy is a strong and growing middle class....And as one of the great economic minds of our time, Larry has earned a global reputation for being able to cut to the heart of the most complex and novel policy challenges.
While some of that might be true, Summers has been a controversial figure, and it's likely no accident that he is being handed a position that does require him to be confirmed by the Senate.
But despite Summer's intellect and experience, it's worth remembering that he did blow one of the major calls of the 1990s: what to do about financial derivatives--those esoteric financial products (such as credit default swaps) that helped grease the way to the subprime meltdown. Not only did Summers oppose greater regulation for those financial instruments; he led the opposition against it.
Back in May 1998, the Commodity Futures Trading Commission, then chaired by Brooksley Born, issued a memo noting it was "re-examining its approach to the over-the-counter (OTC) derivatives market." It noted:
While OTC derivatives serve important economic functions, these products, like any complex financial instrument, can present significant risks if misused or misunderstood. A number of large, well-publicized financial losses over the last few years have focused the attention of the financial services industry, its regulators, derivatives end-users and the general public on potential problems and abuses in the OTC derivatives market.
At the time the OTC derivatives market was valued at $28 trillion, according to the CFTC. The CFTC noted that it was time "to review its regulator approach to OTC derivatives." The CFTC was suggesting the time had come for it to regulate this complicated, opaque corner--or hidden continent--of the economy.
Summers, then the deputy secretary of the Treasury, had another idea--as did Robert Rubin, the secretary of the Treasury, and Alan Greenspan, the chairman of the Federal Reserve. These wise men each gazed with horror upon Born's proposed consideration of regulation for derivatives. Speaking for them, on July 30, 1998, Summers testified in the Senate against the notion of the CFTC even pondering rules governing the trading of derivatives. By releasing its memo, the CFTC, Summers complained, "has cast the shadow of regulatory uncertainty over an otherwise thriving market--raising risks for the stability and competitiveness of American derivative trading."
Summers blasted the CFTC for having raised" the possibility of increased regulation over this market." And he hailed derivatives:
The dramatic growth of the market in recent years is testament not merely to the dynamism of modern financial markets, but to the benefits that derivatives provide for American businesses.
By helping participants manage their risk exposures better and lower their financing costs, derivatives facilitate domestic and international commerce and support a more efficient allocation of capital across the economy. They can also improve the functioning of financial markets themselves by potentially raising liquidity....OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world.
Even "small regulatory changes," Summers cautioned, could throw the whole system out of whack. Determined to slap down the CFTC, his Treasury Department, the Fed, and the Securities and Exchange Commission crafted a proposal that would prohibit the CFTC from issuing new rules regulating any swap or "hybrid instrument."
Summers told the Senate he and his fellow economic bigfoots were not slamming Born and the CFTC cavalierly:
We understood the seriousness of making this proposal. To question an independent agency's concept of its jurisdiction and then to propose legislation that would temporarily curtail that agency's ability to act is not something we do lightly. We concluded, however, that such legislation was necessary to avoid disruption and dislocation in the market while the underlying issues were being considered by Congress.
Congress in late 2000 did end up implementing the Summers approach, when Senator Phil Gramm, then the head of the Senate banking committee, used a back-room maneuver to slip into a must-pass spending bill a measure that prevented the CFTC or the SEC from regulating derivatives.
During that 1998 Senate appearance, Summers did acknowledge that there could be problems with derivatives:
They can also be abused. And there have been certain problems that have arisen in recent years in both the OTC and exchange-traded derivatives market, as well as problems arising from inappropriate investments in complex securities with embedded derivatives. More broadly, questions have been raised as to whether the derivatives markets could exacerbate a large, sudden market decline.
But all he--and Rubin and Greenspan--wanted to do at the time was to study the matter. After all, Summers noted, the Big Finance institutions buying and selling "these kinds of contract are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves" from any problems with derivatives. In other words: fear not, the high-flyers of Wall Street and the world's financial markets know what they are doing.
Summers got that wrong. (See Citigroup.) While others--such as Born and her staff at the CFTC--presciently spotted potential problems arising from the exploding derivatives market, Summers, Rubin and Greenspan blithely fell back on the conventional view: regulation is a growth-killer. Summers' 1998 testimony was imbued with the hubris that led to the current financial disaster. Obama--and the rest of the nation--should hope that when it comes to thinking about regulation these days, Summers has experienced a market-driven correction.
|
|
|
May 13, 2009 | Salon
It would be mean, and probably unfair, to criticize Treasury Secretary's Geithner's brand-new proposals for derivatives regulation as a classic case of barn-door-closing after the horses, cows, pigs, geese, chickens and even the rats all skedaddled. Better late than never, right? The proposals are sensible and long overdue, and I hope Congress moves quickly to codify them into law.
No doubt: It is absolutely true that "An essential element of reform is the establishment of a comprehensive regulatory framework for over-the-counter derivatives, which under current law are largely excluded or exempted from regulation."
Yes! So bring on the centralized clearing houses for derivatives trading, the increased requirements for transparency, "robust" margins, "conservative" capital levels, and reporting. That would all be good.
But I do hope someone gets Lawrence Summers on the phone and extracts some kind of on-the-record admission that he and Robert Rubin and Bill Clinton and Phil Gramm screwed up royally in 1999 and 2000 when they ensured that these derivatives would not be regulated. Because the obvious interpretation to be drawn from Geithner's new rules is that beating back derivatives regulation 10 years ago was a disastrous mistake. Summers was there, and he blew it. Even Alan Greenspan has admitted he made some errors. How about it, Larry?
|
|
|
April 1, 2009 | Credit Writedowns
I am sure you realize by now that I believe Larry Summers is soft on derivatives, soft on regulation and soft on banking executives. He exemplifies the self-regulatory zeal of the previous boom. Given his indifference to responsible regulatory oversight of derivatives and other markets, the following account, now public does seem to fit a pattern.
A former quantitative analyst at Harvard Management Company, the university's once-vaunted endowment manager, tells the Harvard Crimson she was fired for voicing concern to then-university president Larry Summers' chief of staff about the money manager's risky use of derivatives the traders didn't understand.
The episode dates back to 2002, when analyst Iris Mack, whose website
identifies her as the second African American woman to earn a Harvard PhD. in applied math (and someone who likes primary colors) joined the much-venerated Harvard Management Company, which invests the university's then $18 billion endowment, to find what she termed a "frightening" state of affairs.
"The group I was working for had no background whatsoever to be working on [derivatives]," Mack says, adding that, to her knowledge, several of her colleagues were not licensed securities traders. "Sometimes the ways they handled even basic Black-Scholes models [widely used to price stock options] were puzzling." So Mack took inventory of the abuses - high employee turnover, lax risk management practices and a "low level of productivity in the workplace" were among others, and detailed them in an email to Marne Levine, Summers' chief of staff and a Treasury staffer on the Obama Transition Team. (Summers was the only person to whom Meyers reported, and according to a recent Forbes story he personally ordered the university's biggest derivatives trade, a purchase of interest rate swaps that cost the university billions this year.)
A month after sending her email, Mack was fired after a meeting in which the endowment fund's then-chief furnished her the emails and castigated her for making "baseless accusations." She later sued for wrongful termination and settled out-of-court with the university. But she claims the practices "shocked" her, and - the punchline is - she had joined the company from Enron.
Which is also to say, lest you dismiss Mack as an opportunistic snitch capitalizing on Summers fateful opposition to regulating the derivatives that wreaked havoc on the financial system, she had a pretty valid reason to believe in the importance of whistleblowing.
"I'm not trying to pretend I'm omniscient or anything, but a lot of people who were quantitative traders, in the back of our minds, we knew a lot of these models were just that: guestimates," Mack says.
"I have mixed feelings, on the one hand, I wasn't crazy, I knew what I was talking about. But maybe if more and more people had spoken up, the economy wouldn't be the way it is now."
Mack is doing her part to affect change: she's a vociferous advocate of better math education for minorities and like FDIC chairman Sheila Bair, the writer of a children's book. It's called Mama Says Money Don't Grow On Trees (sequel idea: *…Unless You Are A Monstrously Overleveraged Bank With Access To The Federal Reserve Discount Window!).
If Mack's allegations are true Harvard certainly paid the price for its recklessness: Summers' swaps sowed the seeds for a financial disaster at HMC:
It doesn't feel good to be borrowing at 6% while holding assets with negative returns. Harvard has oversize positions in emerging market stocks and private equity partnerships, both disaster areas in the past eight months. The one category that has done well since last June is conventional Treasury bonds, and Harvard appears to have owned little of these. As of its last public disclosure on this score, it had a modest 16% allocation to fixed income, consisting of 7% in inflation-indexed bonds, 4% in corporates and the rest in high-yield and foreign debt.For a long while Harvard's daring investment style was the envy of the endowment world. It made light bets in plain old stocks and bonds and went hell-for-leather into exotic and illiquid holdings: commodities, timberland, hedge funds, emerging market equities and private equity partnerships. The risky strategy paid off with market-beating results as long as the market was going up. But risk brings pain in a market crash. Although the full extent of the damage won't be known until Harvard releases the endowment numbers for June 30, 2009, the university is already working on the assumption that the portfolio will be down 30%, or $11 billion.
Mack's boss at HMC, Jack Meyer, parted ways with the university in 2005. His bets were still paying off but his relationship with Summers had reportedly cooled - among other things, over alumni outcry led by the university's Class of 1969 over the hedge fund-sized bonuses being awarded to employees of a supposed nonprofit. But if there's anything we've learned from the past year, gratuitous compensation and gratuitous risk go hand-in-hand.
"The events of the last year show that the whole procedure of rewarding people so handsomely based on increases on paper value of the endowment was deeply flawed," says a spokesman for the [Class of 1969], which recently sent a letter to the Harvard president suggesting HMC staffers return $21 million of their latest bonuses. "Even now we don't really know how well it has done in the last ten years."
Tim Geithner has taken a lot of heat for the Obama Administration because the new Administration seems to be just as fawning over the financial services industry as the old Bush administration. But, Larry Summers, as the White House's Chief economic counsel, has a lot to say about the direction of economic policy.
If the allegations here are true, clearly Summers violated the law. More to the point for today, one should have little doubt that Obama and his team have a much cozier relationship with Wall Street than Main Street as reflected in the kid's glove approach to banks and the hardball approach with the automakers.
It seems that some in the White House want to party like it's 1999 and not in a good way.
Source
Harvard Derivatives Whiz Fired For Emailing Larry Summers About "Frightening" Trades?
|
|
|
FT.com
Between that financial meltdown and the current one, Summers lived through a crisis different in scale and substance but perhaps even more personally challenging – his tumultuous leadership of Harvard University. That experience, I suggest, may be the first time in a golden career when something went wrong for Summers. The son of two economists and nephew of two Nobel laureates in economics, he went on to become an award-winning, tenured Harvard professor of economics when he was just 28, then moved to top jobs at the World Bank and the Treasury. From there, following George W Bush's election, he glided into the nation's most prestigious academic post, becoming in 2001 president of Harvard. That role came to a rocky end in 2006, when he resigned under pressure from faculty critics. I ask what the episode taught him.
With a slight grimace – the question has been asked many times before – Summers offers his standard, Kissinger-esque line: "Harvard and Washington are both political environments and I'm not sure that Washington is the more political of the environments." Beyond that, he allows that the "negative" lesson he learnt at Harvard was the need to "maintain focus on your top priorities and avoid diversionary controversies that were apart from the agenda", a possible reference to comments about women and science that helped to scupper his already-troubled tenure.
Summers is more forthcoming on how his thinking has been influenced by his recent, part-time stint as an adviser at the hedge fund DE Shaw – a job that created a brief political flurry this spring when financial records released by the White House showed that Summers was paid about $5.2m (£3.2m) in salary and other compensation in the last of his two years at the firm.
The chief intellectual casualty of the current crisis has been the "efficient markets" school – the theory, associated with such erstwhile laisser faire gurus as Alan Greenspan, that market participants are governed by rational expectations and markets are self-correcting. As an academic economist, Summers has studied the shortcomings of that approach but, working on Wall Street gave him, he says, a more visceral understanding of the "self-referential" character of markets: "Markets are concerned with the ultimate health of economies and the like but they're equally or more concerned with what the likely judgments of other market participants in the short run are."
Might this "more textured understanding" have caused Summers to reconsider some of his views from the 1990s – a time when he and former Treasury secretary Robert Rubin led a pro-market faction in the Clinton administration that some critics believe is partly to blame for the current crisis? (They cite, for example, Summers' support for the 1999 repeal of the Depression-era Glass-Steagall Act, which had separated commercial and investment banking.)
Summers' reply amounts to a qualified yes: "I think I always had the sense that our regulatory system was about the protection of individual institutions, and the important problems are often about the protection of the system. I was very worried in the 1990s about predatory lending, about systemic risk, about the stability of Fannie and Freddie. But the political constellation at that time didn't offer a chance really to do more than report and warn about it. It's a different world today. As Keynes famously said, 'When the facts change, I change my mind.'"
|
|
|
The Baseline Scenario
Larry Summers had "lunch with the FT" (p.3 in the Life and Arts section today) – although unfortunately the paper does not report when this happened; a week or two makes quite a difference these days.
Putting this next to his April speech to the IDB, Summers' view of the way forward has a few problems.
Summers says "The American problem this time has more in common, at least qualitatively, with the Japanese post-bubble problem, where the issue was not reassuring foreigners but maintaining sufficient domestic demand to push the economy forward."
But Japan had a chronic current account surplus, which became bigger as firms saved more in order to pay down their debts during the 1990s. The Japanese government could finance its deficit domestically – and the country exported capital consistently. In contrast, with our well-established and large current account deficit and our eye-popping budget deficit, we rely much more on the confidence of foreigners – unless Summers is assuming that the increase in our private sector savings will be truly enormous.
As Summers says, quite accurately, the Asian and other crises of the late 1990s,
"… took the form of a foreign lack of confidence in a country that led to a mass withdrawal of funds and made reassuring foreigners the central priority. That's why interest rates often had to be increased."
Surely, we face some sort of hybrid Japan/emerging market crisis. Or perhaps we are heading towards blending Japan in the 1990s and the US in the 1970s, i.e., there has been a permanent shock (oil then v. financial sector now) to which we should adjust, and if we attempt to postpone that adjustment excessively through overexpansionary macro policies, we'll experience a great deal of inflation.
On Japan in the 1990s, Summers is famous for first arguing it was an aggregate demand problem and later coming to the view that the banks were undercapitalized and – without this – the economy could not sustain a recovery. His ideas on the US are likely to go through the same evolution.
It is also striking that he makes no mention of balance sheets problems, either for consumers or businesses – in Japan then or the US now. It sounds like he is getting ready to push for a second fiscal stimulus – actually, for him this would be the third stimulus, as he argued hard for the tax cut stimulus of early 2008.
Summers is almost certainly wrong when he says, "The very great enthusiasm for accumulating reserves that one saw globally is likely to be a smaller factor over the next decade than it has been in recent years." On the contrary, most emerging markets are glad they had more reserves than in the past and are now wondering about how to build up those reserves further. This may, of couse, help the US sell some of its forthcoming government debt – but it doesn't reduce "global imbalances" or address the fact that we are on an unsustainable public debt and foreign debt path. Most of all, it lets us dig a deeper hole for ourselves and for the world economy.
More broadly, Summers continues to argue, at least implicitly, that we face a temporary shock or one-off aberration of some kind. He distinguishes sharply "fixing" the banking system and "getting the economy out of the rut" from long-run issues, "like fixing health-care, like having real energy policy, like reforming education." He apparently does not see much by way of connections between these two sets of issues.
But doesn't the economic and political power of our troubled banking system threaten our longer run opportunities? Aren't our nonfinancial reform options (e.g., on universal healthcare coverage) already limited by the doubling of government debt (towards 80% of GDP) we are undertaking as a direct consequence of financial sector misfeasance? And won't Medicare – and much else – be undermined by the behavior of "too big to fail" banks down the road?
Summers has commendably switched some of his rhetoric, so now he emphasizes nonfinancial technology development – presumably in the private sector – as the road to sustainable growth. And he rightly contrasts this with the financial engineering that brought us to this point. But does his model really offer the most plausible or appealing path from here to there?
By Simon Johnson
- H Baskerville
We've come up with a standard doctrine (deficit spending with lower taxes) towards the intervention of recessions.
- What if our blind acceptance of the solution is leading us down the wrong path?
- What if studying the great depression/Japan/etc. for answers is actually the wrong thing to do because where we are now is so fundamentally different that a new treatment plan needs to be developed.
It seems crazy to think that the same things that got us in this mess (low interest rates, deficit spending) are now the very cure. Maybe that's the illogic of it all, we're trying to restart the economy when actually we need to be fundamentally rebuilding.
|
|
|
techy : 
DeDude : 
