"... And while I am not as focused on the poverty ve wealth dynamic. this century has revealed something very disappointing that you address. That the elites have done a very poor job of leading the ship of state, while still remaining in leadership belies such a bold hypocrisy in accountability, it's jarring. The article could actually be titled: "The Myth of the Best and the Brightest." ..."
"... They are teaching the elite how to drain all value from American companies, as the rich plan their move to China, the new land of opportunity. When 1% of the population controls such a huge portion of the wealth, patriotism becomes a loadstone to them. The elite are global. Places like Harvard cater to them, help train them to rule the world .but first they must remake it. ..."
"... In my high school, there were roughly 15 of us who had been advanced two years ahead in math. Of those, 10 were Jewish; only two of them had a 'Jewish' last name. In my graduate school class, half (7) are Jewish. None has a 'Jewish' last name. So I'm pretty dubious of the counting method that you use. ..."
"... Regarding the declining Jewish achievement, it looks like it can be primarily explained through demographics: "Intermarriage rates have risen from roughly 6% in 1950 to approximately 4050% in the year 2000.[56][57] This, in combination with the comparatively low birthrate in the Jewish community, has led to a 5% decline in the Jewish population of the United States in the 1990s." ..."
"... Jewish surnames don't mean what they used to. And intermarriage rates are lowest among the low-performing and highly prolific Orthodox. ..."
"... A potentially bigger issue completely ignored by your article is how do colleges differentiate between 'foreign' students (overwhelmingly Asian) and American students. Many students being counted as "Asian American" are in reality wealthy and elite foreign "parachute kids" (an Asian term), dropped onto the generous American education system or into boarding schools to study for US entrance exams, qualify for resident tuition rates and scholarships, and to compete for "American" admissions slots, not for the usually limited 'foreign' admission slots. ..."
"... As some who is Jewish from the former Soviet Union, and who was denied even to take an entrance exam to a Moscow college, I am saddened to see that American educational admission process looks more and more "Soviet" nowadays. Kids are denied opportunities because of their ethnic or social background, in a supposedly free and fair country! ..."
"... Actually, Richard Feynman famously rejected genetic explanations of Jewish achievement (whether he was right or wrong to do so is another story), and aggressively resisted any attempts to list him as a "Jewish scientist" or "Jewish Nobel Prize winner." I am sure he would not cared in the slightest bit how many Jews were participating in the Physics Olympiad, as long as the quality of the students' work continued to be excellent. Here is a letter he wrote to a woman seeking to include him in a book about Jewish achievement in the sciences. ..."
"... It would be interesting to know how well "true WASPS" do in admissions. This could perhaps be estimated by counting Slavic and Italian names, or Puritan New England last names. I would expect this group to do almost as well as Jews (not quite as well, because their ability would be in the lower end of the Legacy group). ..."
"... The missing variable in this analysis is income/class. While Unz states that many elite colleges have the resources to fund every student's education, and in fact practice need-blind admissions, the student bodies are skewed towards the very highest percentile of the income and wealth distribution. SAT scores may also scale with parents' income as well. ..."
"... Having worked with folks from all manner of "elite" and not so elite schools in a technical field, the main conclusion I was able to draw was folks who went to "elite" colleges had a greater degree of entitlement. And that's it. ..."
"... My own position has always been strongly in the former camp, supporting meritocracy over diversity in elite admissions. ..."
"... The Reality of American Mediocrity ..."
"... The central test of fairness in any admissions system is to ask this simple question. Was there anyone admitted under that system admitted over someone else who was denied admission and with better grades and SAT scores and poorer ? If the answer is in the affirmative, then that system is unfair , if it is in the negative then the system is fair. ..."
"... Harvard ranks only 8th after Penn State in the production of undergrads who eventually get Doctorates in Science and Engineering. Of course Berkeley has the bragging rights for that kind of attribute. ..."
"... There is an excellent analysis of this article at The Occidental Observer by Kevin MacDonald, "Ron Unz on the Illusory American Meritocracy". The MSM is ignoring Unz's article for obvious reasons. ..."
"... Could it be that the goal of financial, rather than academic, achievement, makes many young people uninterested in competing in the science and math competitions sought out by the Asian students? I ..."
"... America never promised success through merit or equality. That is the American "dream." ..."
"... Anyone famliar with sociology and the research on social stratification knows that meritocracy is a myth; for example, if one's parents are in the bottom decile of the the income scale, the child has only a 3% chance to reach the top decile in his or her lifetime. In fact, in contrast to the Horatio Alger ideology, the U.S. has lower rates of upward mobility than almost any other developed country. Social classses exist and they tend to reproduce themselves. ..."
"... The rigid class structure of the the U.S. is one of the reasons I support progressive taxation; wealth may not always be inherited, but life outcomes are largely determined by the class position of one's parents. In this manner, it is also a myth to believe that wealth is an individual creation;most financially successful individuals have enjoyed the benefits of class privilege: good and safe schools, two-parent families, tutors, and perhaps most important of all, high expecatations and positive peer socialization (Unz never mentions the importants of peeer groups, which data show exert a strong causal unfluence on academic performance). ..."
"... And I would challenge Unz's assertion that many high-performing Asians come from impovershed backgrounds: many of them may undereport their income as small business owners. I believe that Asian success derives not only from their class background but their culture in which the parents have authority and the success of the child is crucual to the honor of the family. As they assimilate to the more individualist American ethos, I predict that their academic success will level off just as it has with Jews. ..."
"... All I can say is see a book: "Ivy League Fools and Felons"' by Mack Roth. Lots of them are kids of corrupt people in all fields. ..."
Just before the Labor Day weekend, a front page New York Times story broke the news of the largest cheating scandal in Harvard University
history, in which nearly half the students taking a Government course on the role of Congress had plagiarized or otherwise illegally
collaborated on their final exam.
[1] Each year, Harvard admits just 1600 freshmen while almost 125 Harvard students now face possible suspension over this single
incident. A Harvard dean described the situation as "unprecedented."
But should we really be so surprised at this behavior among the students at America's most prestigious academic institution? In
the last generation or two, the funnel of opportunity in American society has drastically narrowed, with a greater and greater proportion
of our financial, media, business, and political elites being drawn from a relatively small number of our leading universities, together
with their professional schools. The rise of a Henry Ford, from farm boy mechanic to world business tycoon, seems virtually impossible
today, as even America's most successful college dropouts such as Bill Gates and Mark Zuckerberg often turn out to be extremely well-connected
former Harvard students. Indeed, the early success of Facebook was largely due to the powerful imprimatur it enjoyed from its exclusive
availability first only at Harvard and later restricted to just the Ivy League.
During
this period, we have witnessed a huge national decline in well-paid middle class jobs in the manufacturing sector and other sources
of employment for those lacking college degrees, with median American wages having been stagnant or declining for the last forty
years. Meanwhile, there has been an astonishing concentration of wealth at the top, with America's richest 1 percent now possessing
nearly as much net wealth as the bottom 95 percent.
[2]
This situation, sometimes described as a "winner take all society," leaves families desperate to maximize the chances that their
children will reach the winners' circle, rather than risk failure and poverty or even merely a spot in the rapidly deteriorating
middle class. And the best single means of becoming such an economic winner is to gain admission to a top university, which provides
an easy ticket to the wealth of Wall Street or similar venues, whose leading firms increasingly restrict their hiring to graduates
of the Ivy League or a tiny handful of other top colleges.
[3] On the other side, finance remains the favored employment choice for Harvard, Yale or Princeton students after the diplomas
are handed out. [4]
As a direct consequence, the war over college admissions has become astonishingly fierce, with many middle- or upper-middle class
families investing quantities of time and money that would have seemed unimaginable a generation or more ago, leading to an all-against-all
arms race that immiserates the student and exhausts the parents. The absurd parental efforts of an Amy Chua, as recounted in her
2010 bestseller Battle Hymn of the Tiger Mother , were simply a much more extreme version of widespread behavior among her
peer-group, which is why her story resonated so deeply among our educated elites. Over the last thirty years, America's test-prep
companies have grown from almost nothing into a $5 billion annual industry, allowing the affluent to provide an admissions edge to
their less able children. Similarly, the enormous annual tuition of $35,000 charged by elite private schools such as Dalton or Exeter
is less for a superior high school education than for the hope of a greatly increased chance to enter the Ivy League.
[5]
Many New York City parents even go to enormous efforts to enroll their children in the best possible pre-Kindergarten program,
seeking early placement on the educational conveyer belt which eventually leads to Harvard.
[6] Others cut corners in a more
direct fashion, as revealed in the huge SAT cheating rings recently uncovered in affluent New York suburbs, in which students were
paid thousands of dollars to take SAT exams for their wealthier but dimmer classmates.
[7]
But given such massive social and economic value now concentrated in a Harvard or Yale degree, the tiny handful of elite admissions
gatekeepers enjoy enormous, almost unprecedented power to shape the leadership of our society by allocating their supply of thick
envelopes. Even billionaires, media barons, and U.S. Senators may weigh their words and actions more carefully as their children
approach college age. And if such power is used to select our future elites in a corrupt manner, perhaps the inevitable result is
the selection of corrupt elites, with terrible consequences for America. Thus, the huge Harvard cheating scandal, and perhaps also
the endless series of financial, business, and political scandals which have rocked our country over the last decade or more, even
while our national economy has stagnated.
Just a few years ago Pulitzer Prize-winning former Wall Street Journal reporter Daniel Golden published The Price
of Admission , a devastating account of the corrupt admissions practices at so many of our leading universities, in which every
sort of non-academic or financial factor plays a role in privileging the privileged and thereby squeezing out those high-ability,
hard-working students who lack any special hook.
In one particularly egregious case, a wealthy New Jersey real estate developer, later sent to Federal prison on political corruption
charges, paid Harvard $2.5 million to help ensure admission of his completely under-qualified son.
[8] When we consider that Harvard's
existing endowment was then at $15 billion and earning almost $7 million each day in investment earnings, we see that a culture of
financial corruption has developed an absurd illogic of its own, in which senior Harvard administrators sell their university's honor
for just a few hours worth of its regular annual income, the equivalent of a Harvard instructor raising a grade for a hundred dollars
in cash.
An admissions system based on non-academic factors often amounting to institutionalized venality would seem strange or even unthinkable
among the top universities of most other advanced nations in Europe or Asia, though such practices are widespread in much of the
corrupt Third World. The notion of a wealthy family buying their son his entrance into the Grandes Ecoles of France or the top Japanese
universities would be an absurdity, and the academic rectitude of Europe's Nordic or Germanic nations is even more severe, with those
far more egalitarian societies anyway tending to deemphasize university rankings.
Well, legacy programs are alive and well. According to the read, here's the problem:
"The research certainly supports the widespread perception that non-academic factors play a major role in the process,
including athletic ability and "legacy" status. But as we saw earlier, even more significant are racial factors, with black
ancestry being worth the equivalent of 310 points, Hispanics gaining 130 points, and Asian students being penalized by 140
points, all relative to white applicants on the 1600 point Math and Reading SAT scale."
These arbitrary point systems while well intended are not a reflection of AA design. School lawyers in a race not be penalized
for past practices, implemented their own versions of AA programs. The numbers are easy to challenge because they aren't based
on tangible or narrow principles. It's weakneses are almost laughable. Because there redal goal was to thwart any real challenge
that institutions were idle in addressing past acts of discrimination. To boost their diversity issues, asians were heavily recruited.
Since AA has been in place a lot of faulty measures were egaged in: Quotas for quotas sake. Good for PR, lousy for AA and issues
it was designed to address.
I think the statistical data hides a very important factor and practice. Most jews in this country are white as such , and
as such only needed to change their names and hide behaviors as a strategy of surviving the entrance gauntlet. That segregation
created a black collegiate system with it's own set of elite qualifiers demonstrates that this model isn't limited to the Ivy
league.
That an elite system is devised and practiced in members of a certain club networks so as to maintain their elite status, networks
and control, this is a human practice. And it once served as something to achieve. It was thought that the avenues of becoming
an elite were there if one wanted to strive for it. Hard work, honesty, persistence, results . . . should yield X.
And while I am not as focused on the poverty ve wealth dynamic. this century has revealed something very disappointing
that you address. That the elites have done a very poor job of leading the ship of state, while still remaining in leadership
belies such a bold hypocrisy in accountability, it's jarring. The article could actually be titled: "The Myth of the Best and
the Brightest."
I don't think it's just some vindictive intent. and while Americans have always known and to an extent accepted that for upper
income citizens, normal was not the same as normal on the street. Fairness, was not the same jn practice nor sentiment. What may
becoming increasing intolerant has been the obvious lack of accountability among elites. TARP looked like the elites looking out
for each other as opposed the ship of state. I have read three books on the financials and they do not paint a pretty portrait
of Ivy League leadership as to ethics, cheating, lying, covering up, and shamelessly passing the buck. I will be reading this
again I am sure.
It's sad to think that we may be seeing te passing of an era. in which one aspired to be an elite not soley for their wealth,
but the model they provided od leadership real or imagined. Perhaps, it passed long ago, and we are all not just noticing.
I appreciated you conclusions, not sure that I am comfortable with some of the solutions.
Since I still hanker to be an elite in some manner, It is interesting to note my rather subdued response to the cheating. Sadly,
this too may be an open secret of standard fair - and that is very very sad. And disappointing. Angering even.
The shifting social demography of deans, house masters and admissions committees may be a more important metric than the composition
of the student body, as it determines the shape of the curriculum, and the underlying culture of the university as a legacy in
itself.
If Ron harrows the literary journals of the Jackson era with equal diligence. he may well turn up an essay or two expressing
deep shock at Unitarians admitting too many of the Lord's preterite sheep to Harvard, or lamenting the rise of Methodism at Yale
and the College of New Jersey.
Harvard is a university, much like Princeton and Yale, that continues based on its reputation, something that was earned in
the past. When the present catches up to them people will regard them as nepotistic cauldrons of corruption.
Look at the financial disaster that befell the USA and much of the globe back in 2008. Its genesis can be found in the clever
minds of those coming out of their business schools (and, oddly enough, their Physics programs as well).
They are teaching the elite how to drain all value from American companies, as the rich plan their move to China, the new
land of opportunity. When 1% of the population controls such a huge portion of the wealth, patriotism becomes a loadstone to them.
The elite are global. Places like Harvard cater to them, help train them to rule the world .but first they must remake it.
Replies: @Part White, Part
Native I agree, common people would never think of derivatives , nor make loans based on speculation
First, I appreciated the length and depth of your article.
Having said that, to boil it down to its essence:
Subconcious bias/groupthink + affirmative action/diversity focus + corruption + innumeracy = student bodies at elite institutions
that are wildly skewed vis-a-vis both: 1) the ethnic makeup of the general population; and 2) the makeup of our top-performing
students.
Since these institutions are pipelines to power, this matters.
I rather doubt that wage stagnation (which appears to have begun in ~1970) can be pinned on this that part stuck out, because
there are far more plausible causes. To the extent you're merely arguing that our elite failed to counter the trend, ok, but I'm
not sure a "better" elite would have either. The trend, after all, favored the elite.
Anyway, I find your case is plausible.
Your inner/outer circle hybrid option is interesting. One (perhaps minor) thing jumps out at me: kids talk. The innies are
going to figure out who they are and who the outies are. The outies might have their arrogance tempered, but the innies? I suspect
they'd be even *more* arrogant than such folks are now (all the more so because they'd have better justification for their arrogance),
but I could be wrong.
Perhaps more significantly, this:
But if it were explicitly known that the vast majority of Harvard students had merely been winners in the application
lottery, top businesses would begin to cast a much wider net in their employment outreach, and while the average Harvard student
would probably be academically stronger than the average graduate of a state college, the gap would no longer be seen as so
enormous, with individuals being judged more on their own merits and actual achievements
Is a very good reason for Harvard, et al. to resist the idea. I think you're right that this would be a good thing for the
country, but it would be bad for Harvard. I think the odds of convincing Harvard to do it out of the goodness of their administrators
hearts is unlikely. You are basically asking them to purposefully damage their brand.
All in all, I think you're on to something here. I have my quibbles (the wage stagnation thing, and the graph with Chinese
vs USA per capita growth come on, apples and oranges there!), but overall I think I agree that your proposal is likely superior
to the status quo.
Don't forget the mess one finds after they ARE admitted to these schools. I dropped out of Columbia University in 2010.
You can "make it" on an Ivy-league campus if you are a conservative-Republican-type with all the rich country-club connections
that liberals use to stereotype.
Or you can succeed if you are a poor or working-class type who is willing to toe the Affirmative Action party line and be a
good "progressive" Democrat (Obama stickers, "Gay Pride" celebrations, etc.)
If you come from a poor or working-class background and are religious, or culturally conservative or libertarian in any way,
you might as well save your time and money. You're not welcome, period. And if you're a military veteran you WILL be actively
persecuted, no matter what the news reports claim.
It sucks. Getting accepted to Columbia was a dream come true for me. The reality broke my heart.
Regarding the overrepresentation of Jewish students compared to their actual academic merit, I think the author overstates
the role bias (subjective, or otherwise) plays in this:
1) , a likely explanation is that Jewish applicants are a step ahead in knowing how to "play the admissions game." They therefore
constitute a good percentage of applicants that admission committees view as "the total package." (at least a higher percentage
than scores alone would yield). Obviously money and connections plays a role in them knowing to say precisely what adcoms want
to hear, but in any case, at the end of the day, if adcoms are looking for applicants with >1400 SATs, "meaningful" life experiences/accomplishments,
and a personal statement that can weave it all together into a compelling narrative, the middle-upper-class east coast Jewish
applicant probably constitutes a good percentage of such "total package" applicants. I will concede however that this explanation
only works in explaining the prevalence of jews vs. whites in general. With respect to Asians, however, since they are likely
being actively and purposefully discriminated against by adcoms, having the "complete package" would be less helpful to them.
2) Another factor is that, regardless of ethnicity, alumni children get a boost and since in the previous generation Jewish
applicants were the highest achieving academic group, many of these lesser qualified jews admitted are children of alumni.
3) That ivy colleges care more about strong verbal scores than mathematics (i.e., they prefer 800V 700M over 700V 800M), and
Jewish applicants make up a higher proportion of the high verbal score breakdowns.
4) Last, and perhaps more importantly we do not really know the extent of Jewish representation compared to their academic
merit. Unlike admitted Asian applicants, who we know, on average, score higher than white applicants, we have no similar numbers
of Jewish applicants. The PSAT numbers are helpful, but hardly dispositive considering those aren't the scores colleges use in
making their decision information.
@Bryan Getting accepted to Columbia was a dream come true for me. The reality broke my heart.
I'm touched by this. I've spent tons of time at Columbia, a generation ago -- and my background fit fine -- the kind of WASP
background Jews found exotic and interesting. But I can see your point, sad to say. There are other great schools -- Fordham,
where my wife went to law school at night, has incredible esprit de corps - and probably, person for person, has as many lawyers
doing good and interesting work as Columbia.
"There are other great schoolsFordham, where my wife went to law school at night, has incredible esprit de corps - and
probably, person for person, has as many lawyers doing good and interesting work as Columbia."
"Tiffany was also rejected by all her other prestigious college choices, including Yale, Penn, Duke, and Wellsley, an outcome
which greatly surprised and disappointed her immigrant father.88″
In the fall of 1990, my parents had me apply to 10 colleges. I had the profile of many Indian kids at the time ranked in
the top 10 of the class, editor of school paper, Boy Scouts. SAT scores could have been better, but still strong. Over 700 in
all achievement tests save Bio, which was 670.
Rejected by 5 schools, waitlisted by 3, accepted into 2 one of them the state univ.
One of my classmates, whose family was from Thailand, wound up in the same predicament as me. His response, "Basketball was
designed to keep the Asian man down."
The one black kid in our group got into MIT, dropped out after one year because he could not hack it. The kid from our school
who should have gone, from an Italian-American family, and among the few who did not embrace the guido culture, went to Rennsealer
instead, and had professional success after.
As a University of Chicago alum, I infer that by avoiding the label "elite" on such a nifty chart we can be accurately categorized
as "meritocratic" by The American Conservative.
Then again, this article doesn't even purport to ask why elite universities might be in the business of EDUCATING a wider population
of students, or how that education takes place.
Perhaps, by ensuring that "the best" students are not concentrated in only 8 universities is why the depth and quality of America's
education system remains the envy of the world.
In my high school, there were roughly 15 of us who had been advanced two years ahead in math. Of those, 10 were Jewish;
only two of them had a 'Jewish' last name. In my graduate school class, half (7) are Jewish. None has a 'Jewish' last name.
So I'm pretty dubious of the counting method that you use.
Also, it's clear that there are Asian quotas at these schools, but it's not clear that Intel Science Fairs, etc, are the best
way to estimate what level of talent Asians have relative to other groups.
I was curious so I google High School Poetry Competition, High School Constitution Competition, High School Debating Competition.
None of the winners here seem to have an especially high Asian quotient. So maybe a non-technical (liberal arts) university would
settle on ~25-30% instead of ~40% asian? And perhaps a (small) part of the problem is a preponderance of Asian applicants excelling
in technical fields, leading to competition against each other rather than the general population? Just wonderin'
Regarding the declining Jewish achievement, it looks like it can be primarily explained through demographics: "Intermarriage
rates have risen from roughly 6% in 1950 to approximately 4050% in the year 2000.[56][57] This, in combination with the comparatively
low birthrate in the Jewish community, has led to a 5% decline in the Jewish population of the United States in the 1990s."
Jewish surnames don't mean what they used to. And intermarriage rates are lowest among the low-performing and highly prolific
Orthodox.
Jewish birth rates have been falling faster than the white population, especially for the non-Orthodox:
"In contrast to the ongoing trends of assimilation, some communities within American Jewry, such as Orthodox Jews, have significantly
higher birth rates and lower intermarriage rates, and are growing rapidly. The proportion of Jewish synagogue members who were
Orthodox rose from 11% in 1971 to 21% in 2000, while the overall Jewish community declined in number. [60] In 2000, there were
360,000 so-called "ultra-orthodox" (Haredi) Jews in USA (7.2%).[61] The figure for 2006 is estimated at 468,000 (9.4%).[61]"
"As against the overall average of 1.86 children per Jewish woman, an informed estimate gives figures ranging upward from 3.3
children in "modern Orthodox" families to 6.6 in Haredi or "ultra-Orthodox" families to a whopping 7.9 in families of Hasidim."
These statistics would suggest that half or more of Jewish children are being born into these lower-performing groups. Given
their very low intermarriage rates, a huge portion of the secular, Reform, and Conservative Jews must be intermarrying (more than
half if the aggregate 43% intermarriage figure is right). And the high-performing groups may now be around 1 child per woman or
lower, and worse for the youngest generation.
So a collapse in Jewish representation in youth science prizes can be mostly explained by the collapse of the distinct non-Orthodox
Jewish youth.
Incidentally, intermarriage also produces people with Jewish ancestry who get classified as gentiles using last names or self-identification,
reducing Jewish-gentile gaps by bringing up nominal gentile scores at the same time as nominal-Jewish scores are lowered.
The center of power in this country being located in the Northeast is nothing new. Whether it be in it's Ivy League schools
or the ownership of natural resources located in other regions, particularly the South, the Northeast has always had a disproportionate
share of influence in the power structures, particularly political and financial, of this nation. This is one of the reasons the
definition of "white" when reviewing ethnicity is so laughably inaccurate. There is a huge difference in opportunity between WASP
or Jewish in the Northeast, for instance, and those of Scots Irish ancestory in the mountain south. Hopefully statistical analysis
such as this can break open that stranglehold, especially as it is directly impacting a minority group in a negative fashion.
Doing this exercise using say, white Baptists compared to other white subgroups, while maybe equally valid in the results, would
be seen as racist by the very Ivy League system that is essentially practicing a form of racism.
Yeah, my ultimate goal was to attend law school, and a big part of the heartbreak for meor heartburn, the more cynical would
call itwas seeing how skewed and absurd the admissions process to law school is.
I have no doubt that I could have eventually entered into a "top tier" law school, and that was a dream of mine also. I met
with admissions officers from Duke, Harvard, Stanford, Fordham, etc. I was encouraged. I had the grades and background for it.
Butand I'm really not trying to sound corny 0r self-important herewhat does it profit a man to gain the world and lose his
soul? I really don't feel that I'm exaggerating when I say that that's exactly how it felt to me.
The best experience I had while In New York was working as an after-school programs administrator for P.S. 136, but that was
only because of the kids. They'll be old and bitter and cynical soon enough.
At one point it occurred to me that I should have just started claiming "Black" as my ethnicity when I first started attending
college as an adult. I never attended high-school so it couldn't have been disproved. I'm part Sicilian so I could pass for 1/4
African-American. Then I would have received the preference toward admission that, say, Michael Jordan's kids or Barack Obama's
kids will receive when they claim their Ivy-league diplomas. I should have hid the "white privilege" I've enjoyed as the son of
a fisherman and a waitress from one of the most economically-depressed states in America.
The bottom line is that those colleges are political brainwashing centers for a country I no longer believe in. I arrived on
campus in 2009 and I'm not joking at all when I say I was actively persecuted for being a veteran and a conservative who was not
drinking the Obama Kool-aid. Some big fat African-American lady, a back-room "administrator" for Columbia, straight-up threw my
VA benefits certification in the garbage, so my money got delayed by almost two months. I had no idea what was going on. I had
a wife and children to support.
The fact that technology has enabled us to sit here in real-time and correspond back-and-forth about the state of things doesn't
really change the state of things. They are irredeemable. This country is broke and broken.
If Abraham Lincoln were born today in America he would wind up like "Uncle Teardrop" from Winter's Bone. Back then, in order
to be an attorney, you simply studied law and starting trying cases. If you were good at it then you were accepted and became
a lawyer. Today, something has been lost. There is no fixing it. I don't want to waste my time trying to help by being "productive"
to the new tower of Babel or pretending to contribute.
Perhaps only one thing you left out, which is especially important with regard to Jewish enrollment and applications at Ivy
leagues, and other schools as well.
Jewish high school graduates actively look out for campuses with large Jewish populations, where they feel more comfortable.
I don't know the figures, but I believe Dartmouth, for example, has a much smaller Jewish population than Columbia, and it will
stay that way because of a positive feedback loop. (i.e. Jews would rather be at Columbia than Dartmouth, or sometimes even rather
be at NYU than Dartmouth). This explains some of the difference among different schools (and not solely better admission standards).
This is also especially relevant to your random lottery idea, which will inevitably lead to certain schools being overwhelmingly
Asian, others being overwhelmingly Jewish, etc., because the percentage of applicants from every ethnicity is different in every
school. This will necessarily eliminate any diversity which may or may not have existed until now.
I like the lottery admissions idea a lot but the real remedy for the US education system would be to abandon the absurd elite
cult altogether. There is not a shred of evidence that graduates of so-called elite institutions make good leaders. Many of them
are responsible for the economic crash and some of them have brought us the disaster of the Bush presidency.
Many better functioning countries Germany, the Scandinavians do not have elite higher education systems. When I enrolled
to University in Germany, I showed up at the enrollment office the summer before the academic year started, filled out a form
(1), and provided a certified copy of my Abitur certificate proving that I was academically competent to attend University. I
never wasted a minute on any of the admissions games that American middle class teenagers and their parents are subjected to.
It would surely have hurt my sense of dignity to be forced to jump through all these absurd and arbitrary hoops.
Americans, due to their ignorance of everything happening outside their borders, have no clue that a system in which a person
is judged by what "school" they attended is everything but normal. It is part of the reason for American dysfunction.
Since they are the pool from which tomorrow's governing elites will be chosen, I'd much rather see Ivy League student bodies
which reflected the full ethnic and geographic diversity of the US. Right now rural and small town Americans and those of Catholic
and Protestant descent who live in the South and Mid-West - roughly half the population - are woefully under-represented, which
explains why their economic interests have been neglected over the last forty years. We live in a multi-cultural, multi-ethnic
representative democracy and our policy-making elites must reflect that diversity. Else the country will come apart.
Thus I recommend 'affirmative action for all' in our elite liberal arts colleges and universities (though not our technical
schools). Student bodies should be represent 'the best and the brightest' of every ethnic group and geographical area of the country.
Then the old school ties will truly knit our society together in a way that is simply not happening today.
A side benefit - and I mean this seriously - is that our second and third tier colleges and universities would be improved
by an influx of Asian and Ashkenazi students (even though the very best would still go to Harvard).
I believe that this article raises and then inappropriately immediately dismisses the simplest and most likely reason for
the over-representation of Jewish students at Ivy League Schools in the face of their declining bulk academic performance:
They apply to those schools in vastly disproportionate numbers.
Without actual data on the ethnicity of the applicants to these and other schools, we simply cannot rule out this simple and
likely explanation.
It is quite clear that a large current of Jewish American culture places a great emphasis on elite college attendance, and
among elite colleges, specifically values the Ivy League and its particular cache as opposed to other elite institutions such
as MIT. Also, elite Jewish American culture, moreso than elite Asian American culture, encourages children to go far away from
home for college, considering such a thing almost a right of passage, while other ethnic groups tend to encourage children to
remain closer. A high performing Asian student from, say, California, is much more likely to face familial pressure to stay close
to home for undergrad (Berkeley, UCLA, etc) than a high performing Jewish student from the same high school, who will likely be
encouraged by his or her family to apply to many universities "back east".
Without being able to systematically compare with real data the ethnicities of the applicants to those offered admission,
these conclusions simply cannot be accepted.
Different expectations for different races should worry traditional Americans.
If we become comfortable with different academic standards for Asians will we soon be expected to apply different laws to them
also? Will we apply different laws or at least different interpretations of the same laws to blacks?
The association of East Asians with CalTech is now as strong as the association of blacks with violent crime. Can not race
conscious jurisprudence be far behind?
Around a millenium ago in England it mattered to the court if you were a commoner or a noble. Nobles could exercise 'high justice'
with impunity. They were held to different standards. Their testimony counted for more in court. The law was class concious.
Then we had centuries of reform. We had 'Common Law'. By the time of our revolution the idea that all were equal before the
law was a very American kind of idea. We were proud that unlike England we did not have a class system.
Today we seem to be on the threshold of a similar sytem of privileges and rights based on race. Let me give an example. If
there were a domestic riot of somekind and a breakdown of public order, the authorities might very well impose a cufew. That makes
good sense for black male teens but makes little or no sense for elderly Chinese women. I can envision a time when we have race
specific policies for curfews and similar measures.
It seems to be starting in schools. It could be that the idea of equality before the law was an idea that only flourished between
the fifteenth century and the twenty first.
"But filling out a few very simple forms and having their test scores and grades scores automatically forwarded to a list of
possible universities would give them at least the same chance in the lottery as any other applicant whose academic skills were
adequate."
They get a lot of applications. I am guessing they chuck about 1/2 or more due to the application being incomplete, the applicant
did not follow instructions, the application was sloppy, or just obviously poor grades/test scores. The interview and perhaps
the essay and recommendations are necessary to chuck weirdos and psychopaths you do not want sitting next to King Fahd Jr. So
the "byzantine" application process is actually necessary to reduce the number of applicants to be evaluated.
I have a friend who went to Stanford with me in the early 80s. She has two sons who recently applied to Stanford. The older
son had slightly better grades and test scores. The younger son is gay. Guess which one got in?
If you were in Columbia's GS school, (or even if you were CC/SEAS/Barnard) you ought to reach out to some of on-campus and
alumni veteran's groups. They can help you maneuver through the school. (I know there's one that meets at a cafe on 122 and Broadway)
CU can be a lonely and forbidding place for anyone and that goes double for GSers and quadruple for veterans.
You ought to give it another go. Especially if you aren't going somewhere else that's better. Reach out to your deans and make
a fuss. No one in the bureaucracy wants to help but you can force them to their job.
Mr. Unz, the issues of jewish/gentile intermarriage and the significance of jewish-looking names do indeed merit more consideration
than they were given in this otherwise very enlightening article.
What would the percentage of jews in Ivy-League universities look like if the methodology used to determine the percentage
of jewish NMS semifinalists were applied to the list of Ivy League students (or some available approximation of it)?
For background: I'm an Asian-American who worked briefly in legacy admissions at an Ivy and another non-Ivy top-tier, both
while in school (work-study) and as an alum on related committees.
Mendy Finkel's observations are spot on. Re: her 1st point, personal "presentation" or "branding" is often overlooked by Asian
applicants. An admission officer at another Ivy joked they drew straws to assign "Night of a 1000 Lee's", so accomplished-but-indistinguishable
was that group.
A few points on the Asian analysis:
1. I think this analysis would benefit from expanding beyond HYP/Ivies when considering the broader meritocracy issue. Many
Asians esteem technical-leaning schools over academically-comparable liberal arts ones, even if the student isn't a science major.
When I was in college in the 90′s, most Asian parents would favor a Carnegie Mellon or Hopkins over Brown, Columbia or Dartmouth
(though HYP, of course, had its magnetic appeal). The enrollment percentages reflect this, and while some of this is changing,
this is a fairly persistent pattern.
2. Fundraising is crucial. The Harvard Class of '77 example isn't the most telling kind of number. In my experience, Jewish
alumni provide a critical mass in both the day-to-day fundraising and the resultant dollars. And they play a key role, both as
givers and getters, in the signature capital campaign commitments (univ hospitals, research centers, etc.). This isn't unique
to Jewish Ivy alumni; Catholic alumni of ND or Georgetown provide similar support. But it isn't clear what the future overall
Asian commitment to the Ivy "culture of fundraising" will be, which will continue to be a net negative in admissions.
Sidenote: While Asians greatly value the particular civic good, they are uneasy with it being so hinged to an opaque private
sector, in this case, philanthropy. That distinction, blown out a bit, speaks to some of the Republican "Asian gap".
3. I would not place too much weight on NMS comparisons between Asians and Jews. In my experience, most Asians treat the PSAT
seriously, but many established Jews do not the potential scholarship money isn't a factor, "NMS semifinalist" isn't an admissions
distinction, and as Mendy highlighted, colleges don't see the scores.
On a different note, while the "weight" of an Ivy degree is significant, it's prestige is largely concentrated in the Northeast
and among some overseas. In terms of facilitating access and mobility, a USC degree might serve you better in SoCal, as would
an SMU one in TX.
And like J Harlan, I also hope the recent monopoly of Harvard and Yale grads in the presidency will end. No doubt, places like
Whittier College, Southwest Texas State Teachers' College, and Eureka College gave earlier presidents valuable perspectives and
experience that informed their governing.
But thank you, Ron, for a great provocative piece. Very well worth the read.
Hey Ron, your next article should be on the military academies, and all those legacies that go back to the Revolutionary War.
How do you get into the French military academy, and do the cadets trace their family history back to the soldiers of Napoleon
or Charles Martel or whatever?
"Thus, there appears to be no evidence for racial bias against Asians, even excluding the race-neutral impact of athletic recruitment,
legacy admissions, and geographical diversity."
Yes, at UCLA, at least up to 2004, Asian and white admits had nearly identical SATs and GPAs.
Further, it just isn't the case that Asians are so spectacular as people seem to think. Their average on the SAT Verbal is
slightly less than whites, their average on SAT Writing is slightly more. Only in math do they have a significant advantage, 59
points or .59 standard deviation. Total advantage is about .2 over the three tests. Assuming that Harvard or Yale admit students
at +3 standard deviations overall, and plugging the relative group quantiles +(3, 2.8) into a normal distribution, we get that
.14% of white kids would get admitted, versus .26% of Asian kids. Or, 1.85 Asian kids for every one white kid.
But, last year 4.25 times as many whites as Asians took the SAT, so there still should be about 2.28 times as many white kids
being admitted as Asians (4.25/1.85).
On GPA, whites and Asians are also pretty similar on average, 3.52 for Asians who took the SAT, 3.45 for whites who took the
SAT. So that shouldn't be much of a factor.
I am a Cadet at the US Military Academy at West Point and generally pretty familiar with trans-national Academy admissions
processes. There's an excellent comparative study of worldwide military academy admissions that was done in the late '90′s you
might find interesting (IIRC it was done by a group in the NATO Defence College) and I think you will find that although soldiers
are often proud of their family histories to a fault, it is not what controls entrance to the officer corps in most countries.
"Legacy" is definitely meaningless in US Military Academy admissions, although can be very helpful in the separate process
of securing a political appointment to attend the Academy once accepted for admission and in an Army career. West Point is not
comparable to the Ivy League schools in the country, because (ironically) the admissions department that makes those comparisons
lets in an inordinate number of unqualified candidates and ensures our student body includes a wide range of candidates, from
people who are unquestionably "Ivy League material" to those who don't have the intellect to hack it at any "elite" institution.
Prior the changes in admissions policies and JFK ordering an doubling of the size of the Corps of Cadets in the '60′s, we didn't
have this problem. But, I digress. My point is, the Academy admissions system is very meritocratic.
I am a Jewish alum of UPenn, and graduated in the late 90s. That puts me almost a generation ago, which may be before the supposed
Jewish decline you write about. I was in an 80%+ Jewish fraternity, and at least 2/3 of my overall network of friends at Penn
was also Jewish. As was mentioned earlier, I have serious qualms with your methods for counting Jews based upon last name.
Based upon my admittedly non-scientific sample, the percentage of us who had traditionally Jewish last names was well under
half and closer to 25%. My own last name is German, and you would never know I am Jewish based solely upon my name (nor would
you based upon the surname of 3/4 of my grandparents, despite my family being 100% Jewish with no intermarriages until my sister).
By contrast, Asians are much easier to identify based upon name. You may overcount certain names like Lee that are also Caucasian,
but it is highly unlikely that you will miss any Asian students when your criterion is last name.
Admittedly I skimmed parts of the article, but were other criterion used to more accurately identify the groups?
The Jewish presence is definitely understated by just looking at surnames. As is the American Indian.
My maternal grandfather was Ashkenazi and his wife was 1/2 Ashkenazi and 1/4 Apache. He changed his name to a Scots surname
that matched his red hair so as to get ahead as a business man in 20s due to KKK and anti-German feelings at the time. Their kids
had two PHDs and a Masters between them despite their parents running a very blue collar firm.
My surname comes from my dad and its a Scottish surname although he was 1/4 Cherokee. On that side we are members of the FF
of Virignia. Altogether I am more Jewish and American Indian than anything else yet would be classified as white. I could easily
claim to be
Jewish or Indian on admissions forms. I always selected white. I was NMSF.
Both my sister and I have kids. Her husband is a full blood Indian with a common English surname. One of my nieces made NMSF
and another might. My sisters kids do not think of themselves as any race and check other.
My wife is 1/4 Indian and 3/4 English. My kids are young yet one has tested to an IQ in the 150s.
Once you get West of the Appalachians, there are a lot of mutts in the non-gentile whites. A lot of Jews and American Indians
Anglicized themselves a generation or two ago and they are lumped into that group as well as occupy the top percentile academically.
Interesting article with parts I would agree with but also tinged with bias and conclusions that I would argue are not fully
supported by the data.
I think more analysis is needed to confirm your conclusions. As others have mentioned there may be problems with your analysis
of NMS scores. I think graduate admissions and achievements especially in the math and sciences would be a better measure of intellectual
performance.
Now, I didn't attend an Ivy League school, instead a public university, mainly because I couldn't afford it or so I thought.
I was also a NMS finalist.
But I always was of the opinion that except for the most exceptional students admission to the Ivies was based on the wealth
of your family and as you mentioned there are quite a few affluent Jews so I imagine they do have a leg up. Harvard's endowment
isn't as large as it is by accident.
It is interesting that you didn't discuss the stats for Stanford.
Lastly, I think your solution is wrong. The pure meritocracy is the only fair solution. Admissions should be based upon the
entrance exams like in Asia and Europe.
There are plenty of options for those who don't want to compete and if the Asians dominate admissions at the top schools so
be it.
Hopefully, all of this will be mute point n a few years as online education options become more popular with Universities specializing
in graduate education and research.
Ron Unz on Asians (ie Asian Americans): "many of them impoverished immigrant families"
Why do you twice repeat this assertion. Asians are the wealthiest race and most of the wealthiest ethnic groups tracked by
the Census Bureau, which includes immigrants.
A potentially bigger issue completely ignored by your article is how do colleges differentiate between 'foreign' students
(overwhelmingly Asian) and American students. Many students being counted as "Asian American" are in reality wealthy and elite
foreign "parachute kids" (an Asian term), dropped onto the generous American education system or into boarding schools to study
for US entrance exams, qualify for resident tuition rates and scholarships, and to compete for "American" admissions slots, not
for the usually limited 'foreign' admission slots.
Probably people from non-Asian countries are pulling the same stunt, but it seems likely dominated by Asians. And expect many
more with the passage of the various "Dream Acts"
So American kids must compete with the offspring of all the worlds corrupt elite for what should be opportunities for US Americans.
Am I the only one that finds the comparison of Asians (a race) to Jews (a religion) as basis for a case of discrimination completely
flawed? I got in at Harvard and don't remember them even asking me what my religion was.
The value of diversity is absolutely key. I have a bunch of very good Asian friends and I love them dearly, but I don't believe
a place like CalTech with its 40% demographics cannot truly claim to be a diverse place any more.
Regarding the SAT, we do know more than just differences of averages between whites and Asians. We have some years of
score distributions . As recently
as 1992, 1.2% of whites and 5.1% of Asians scored between 750 and 800 on the math subtest. As recently as 1985, 0.20% of whites
and 0.26% of Asians scored in that range on the verbal/critical reading subtest.
On a different form of the writing subtest than is currently used, 5.0% of whites and 3.0% of Asians scored greater than 60
in 1985. We also know that, as the white-Asian average verbal/critical reading gap shrank to almost nothing and the average math
gap grew in Asians' favor, the standard deviations on both for Asians have been much higher than every other group but have stayed
relatively unchanged and have become, in fact, slightly lower than in 1985.
Therefore, Asians probably greatly increased their share of top performers.
@Milton F.: "Perhaps, by ensuring that "the best" students are not concentrated in only 8 universities is why the depth and
quality of America's education system remains the envy of the world."
Hardly. America's education system is "the envy" because of the ability for minorities to get placement into better schools,
not solely for the education they receive. Only a very select few institutions are envied for their education primarily, 90% of
the colleges and universities across the country are sub-standard education providers, same with high schools.
I would imagine you're an educator at some level, more than likely, at one of the sub-standard colleges or even perhaps a high
school teacher. You're attempting to be defensive of the American education system, when in reality, you're looking at the world
through rose colored glasses. Working from within the system, rather than from the private sector looking back, gives you extreme
tunnel vision. That, coupled with the average "closed mindedness" of educators in America is a dangerous approach to advancing
the structure of the American education system. You and those like you ARE the problem and should be taken out of the equation
as quickly as possible. Please retire ASAP or find another career.
Aside from the complete lack of actual ivy league admission data on jewish applicants, a big problem with unz's "jewish affirmative
action" claim is how difficult such a policy would be to carry out in complete secrecy.
Now, it would be one thing if Unz was claiming that jews are being admitted with similar numbers to non-jewish whites, but
in close cases, admissions staff tend to favor jewish applicants. But he goes much further than that. Unz is claiming that jews,
as a group, are being admitted with lower SAT scores than non-jewish whites. Not only that, but this policy is being carried out
by virtually every single ivy league college and it has been going on for years. Moreover, this preference is so pervasive, that
it allows jews to gain admissions at many times the rate that merit alone would yield, ultimately resulting in entering classes
that are over 20% Jewish.
If a preference this deep, consistent and widespread indeed exists, there is no way it could be the result of subjective bias
or intentional tribal favoritism on the part of individual decision makers. It would have to be an official, yet unstated, admissions
policy in every ivy league school. Over the years, dozens (if not hundreds) of admission staff across the various ivy league colleges
would be engaging in this policy, without a single peep ever leaking through about Jewish applicants getting in with subpar SAT
scores. We hear insider reports all the time about one group is favored or discriminated against (we even have such an insider
account in this comment thread), but we hear nothing about the largest admission preference of them all.
Remember, admissions staffs usually include other ethnic minorities. I couldn't imagine them not wondering why jews need to
be given such a big boost so that they make up almost a quarter of the entering class. Even if every member of every admissions
committee were Jewish liberals, it would still be almost impossible to keep this under wraps.
Obviously, I have never seen actual admission numbers for Jewish applicants, so I could be wrong, and there could in fact be
an unbreakable wall of secrecy regarding the largest and most pervasive affirmative action practice in the country. Or, perhaps,
the ivy league application pool contains a disproportionate amount of high scoring jewish applicants.
As some who is Jewish from the former Soviet Union, and who was denied even to take an entrance exam to a Moscow college,
I am saddened to see that American educational admission process looks more and more "Soviet" nowadays. Kids are denied opportunities
because of their ethnic or social background, in a supposedly free and fair country!
But this is just a tip of the iceberg. The American groupthink of political correctness, lowest common denominator, and political
posturing toward various political/ethnic/religious/sexual orientation groups is rotting this country inside out.
"Similarly, Jews were over one-quarter of the top students in the Physics Olympiad from 1986 to 1997, but have fallen to just
5 percent over the last decade, a result which must surely send Richard Feynman spinning in his grave."
Actually, Richard Feynman famously rejected genetic explanations of Jewish achievement (whether he was right or wrong to
do so is another story), and aggressively resisted any attempts to list him as a "Jewish scientist" or "Jewish Nobel Prize winner."
I am sure he would not cared in the slightest bit how many Jews were participating in the Physics Olympiad, as long as the quality
of the students' work continued to be excellent. Here is a letter he wrote to a woman seeking to include him in a book about Jewish
achievement in the sciences.
Dear Miss Levitan:
In your letter you express the theory that people of Jewish origin have inherited their valuable hereditary elements from their
people. It is quite certain that many things are inherited but it is evil and dangerous to maintain, in these days of little knowledge
of these matters, that there is a true Jewish race or specific Jewish hereditary character. Many races as well as cultural influences
of men of all kinds have mixed into any man. To select, for approbation the peculiar elements that come from some supposedly Jewish
heredity is to open the door to all kinds of nonsense on racial theory.
Such theoretical views were used by Hitler. Surely you cannot maintain on the one hand that certain valuable elements can be
inherited from the "Jewish people," and deny that other elements which other people may find annoying or worse are not inherited
by these same "people." Nor could you then deny that elements that others would consider valuable could be the main virtue of
an "Aryan" inheritance.
It is the lesson of the last war not to think of people as having special inherited attributes simply because they are born
from particular parents, but to try to teach these "valuable" elements to all men because all men can learn, no matter what their
race.
It is the combination of characteristics of the culture of any father and his father plus the learning and ideas and influences
of people of all races and backgrounds which make me what I am, good or bad. I appreciate the valuable (and the negative) elements
of my background but I feel it to be bad taste and an insult to other peoples to call attention in any direct way to that one
element in my composition.
At almost thirteen I dropped out of Sunday school just before confirmation because of differences in religious views but mainly
because I suddenly saw that the picture of Jewish history that we were learning, of a marvelous and talented people surrounded
by dull and evil strangers was far from the truth. The error of anti-Semitism is not that the Jews are not really bad after all,
but that evil, stupidity and grossness is not a monopoly of the Jewish people but a universal characteristic of mankind in general.
Most non-Jewish people in America today have understood that. The error of pro-Semitism is not that the Jewish people or Jewish
heritage is not really good, but rather the error is that intelligence, good will, and kindness is not, thank God, a monopoly
of the Jewish people but a universal characteristic of mankind in general.
Therefore you see at thirteen I was not only converted to other religious views but I also stopped believing that the Jewish
people are in any way "the chosen people." This is my other reason for requesting not to be included in your work.
@Rob Schacter your last point is basically spot-on. The Ivies are fairly unique in the high proportion of Jewish applicants.
History, geographical bias, and self-selection all play a role. I think the overall preference distortion is probably not as wide
as Unz claims, but you will see similar tilts at Stanford, Northwestern, etc. that reflect different preference distortions.
@Leon, two quick points.
1st the census tracks by household, which generally overestimates Asian wealth. Many families have three generations and
extended members living in one household (this reflects that many of them work together in a small family business).
2nd most of the time, it's clear in the application (the HS, personal info, other residency info, etc.) which Asian applicants
are Asian-American and which are "Parachute Kids". But the numbers are much smaller than one might think, and the implication
depends on the school.
At Ivies, parachute kids (both Asian and not) tend to compete with each other in the application pool, and aren't substantially
informing the broader admissions thesis in this article. I'm not saying that's right, just saying it's less material than we might
think.
They more likely skew the admissions equation in great-but-not-rich liberal arts colleges (like Grinnell) and top public universities
(like UCLA), which are both having budget crises and need full fare students, parachute or not. And for the publics, this includes
adding more higher-tuition, out-of-state students, which further complicates assertions of just whose opportunities are being
lost.
I will bring this back to fundraising and finances again, because the broader point is about who is stewarding and creating
access: so long as top universities are essentially run as self-invested feedback loops, and position and resource themselves
accordingly (and other universities have to compete with them), we will continue to see large, persistent discrepancies in who
can participate.
When I applied to Harvard College back in 1976, I was proud of my application essay. In it, I proposed that the US used the
Israeli army as a proxy, just as the Russians were using the Cuban army at the time.
Alas, I wasn't admitted (I did get into Yale, which didn't require free-form essay like that).
This, of course, illustrates the point that coming from an Application Hell instead of from central Illinois helps a student
know how to write applications. It also illustrates what might help explain the mystery of high Jewish admissions: political bias.
Jews are savvier about knowing what admissions officers like to hear (including the black and Latino ones, who as a previous commentor
said aren't likely to be pro-semite). They are also politically more liberal, and so don't have to fake it. And their families
are more likely to read the New York Times and thus have the right "social graces" as we might call them, of this age.
It would be interesting to know how well "true WASPS" do in admissions. This could perhaps be estimated by counting Slavic
and Italian names, or Puritan New England last names. I would expect this group to do almost as well as Jews (not quite as well,
because their ability would be in the lower end of the Legacy group).
The missing variable in this analysis is income/class. While Unz states that many elite colleges have the resources to
fund every student's education, and in fact practice need-blind admissions, the student bodies are skewed towards the very highest
percentile of the income and wealth distribution. SAT scores may also scale with parents' income as well.
Tuition and fees at these schools have nearly doubled relative to inflation in the last 25-30 years, and with home prices in
desirable neighborhoods showing their own hyper-inflationary behavior over the past couple of decades (~15 yrs, especially), the
income necessary to pay for these schools without burdening either the student or parents with a lot of debt has been pushed towards
the top decile of earners. A big chunk of the upper middle class has been priced out. This could hit Asian professionals who may
be self made harder than other groups like Jews who may be the second or third generation of relative affluence, and would thus
have advantages in having less debt when starting their families and careers and be less burdened in financing their homes. Would
be curious to see the same analysis if $$ could be controlled.
I would also like to add that I am a late '80′s graduate of Wesleyan who ceased his modest but annual financial contribution to
the school after reading The Gatekeepers.
If I had a penny for every Jewish American I met (including myself) whose first and last name gave no indication of his religion
or ethnicity, I'd be rich. Ohand my brother and I have four Ivy League degrees between us.
I almost clicked on a different link the instance I came across the word "elite" , but curiosity forced my hand.
Just yesterday my mom was remarking how my cousin had gotten into MIT with an SAT score far below what I scored, and she finished
by adding that I should have applied to an ivy-league college after high school. I as always, reminded her, I'm too "black for
ivy games".
I always worked hard in school, participated in olympiads and symposiums, and was a star athlete. When it came to applying
for college I found myself startled when forced to "quantify" my achievements in an "application package". I did not do or engage
in these activities solely to boost my chances of gaining admission into some elite college over similarly-hardworking Henry Wang
or Jess Steinberg. I did these things because I loved doing them.
Sports after class was almost a relaxation activity for me. Participating in math olympiads was a way for me to get a scoop
on advanced mathematics. Participating in science symposiums was a chance for me to start applying my theoretical education to
solve practical problems.
The moment I realized I would have to kneel down before some admissions officer and "present my case", outlining my "blackness",
athleticism, hard work, curiosity, and academic ability, in that specific order I should point, in order to have a fighting chance
at getting admitted; is the moment all my "black rage" came out in an internal explosion of rebellion and disapproval of "elite
colleges".
I instead applied to a college that was blind to all of the above factors. I am a firm believer that hard work and demonstrated
ability always win out in the end. I've come across, come up against is a better way to put it, Ivy-league competition in college
competitions and applications for co-ops and internships, and despite my lack of "eliteness" I am confident that my sheer ability
and track record will put me in the "interview candidate" pool.
Finally, my opinion is: let elite schools keep doing what they are doing. It isn't a problem at all, the "elite" tag has long
lost its meaning.
The difficulty with using Jewish sounding last names to identify Jewish students works poorly in two ways today. Not only,
as others have pointed out, do many Jews not have Jewish sounding last names, but there are those, my grandson for example, who
have identifiably Jewish last names and not much in the way of Jewish background.
Interesting reading. The article opens a deceptively simple statistical window into a poorly understood process - a window
which I would guess even the key participants have never looked through. I especially appreciated the insights provided by the
author's examination of Asian surname-frequencies and their over-representation in NMS databases.
Though this is a long and meticulously argued piece, it would have benefited from a more thorough discussion of the statistical
share of legacies and athletic scholarships in elite admissions.
Perhaps, though, it would be better to focus on increasing meritocracy in the broader society, which would inevitably lead
to some discounting of the value of educational credentials issued by these less than meritocratic private institutions.
It is precisely because the broader society is also in many key respects non-meritocratic that the non-meritocratic admissions
practices of elite institutions are sustainable.
Despite the very long and detailed argument, the writer's interpretation of a pro-Jewish admissions bias at Ivy-league schools
is worryingly flawed.
First, he uses two very different methods of counting Jews: name recognition for counting various "objective" measures such
as NMS semifinalists and Hillel stats for those admitted to Harvard. The first is most likely an underestimate while the latter
very possibly inflated (in both cases especially due to the very large numbers of partially-Jewish students, in the many interpretations
that has). I wonder how much of his argument would just go away if he simply counted the number of Jews in Harvard using the same
method he used to count their numbers in the other cases. Would that really be hard to do?
Second, he overlooks the obvious two sources that can lead to such Asian/Jewish relative gaps in admissions. The first is the
different groups' different focus on Science/Math vs. on Writing/Culture. It is very possible that in recent years most Asians
emphasize the former while Jews the latter, which would be the natural explanation to the Caltech vs Harvard racial composition
(as well as to the other stats). The second is related but different and it is the different group's bias in applications: the
same cultural anecdotes would explain why Asians would favor applying to Caltech and Jews to Harvard. A natural interpretation
of the data would be that Jews have learned to optimize for whatever criteria the Ivy leagues are using and the Asians are doing
so for the Caltech criteria.
Most strange is the author's interpretation of how a pro-Jewish bias in admissions is actually put into effect: the application
packets do not have the data of whether the applicant is Jewish or not, and I doubt that most admission officers figure it out
in most cases. While it could be possible for admissions officers to have a bias for or against various types of characteristics
that they see in the data in front of them (say Asian/Black/White or political activity), a systematic bias on unobserved data
is a much more difficult proposition to make. Indeed the author becomes rather confused here combining the low education level
of admissions officers, that they are "liberal arts or ethnic-studies majors" (really?), that they are "progressive", and that
there sometimes is corruption, all together presumably leading to a bias in favor of Jews?
Finally, the author's suggestion for changing admittance criteria is down-right bizarre for a conservative: The proposal is
a centralized solution that he aims to force upon the various private universities, each who can only loose from implementing
it.
Despite the long detailed (but extremely flawed) article, I am afraid that it is more a reflection of the author's biases than
of admissions biases.
Both the article and the comments are illuminating. My takeaways:
1) Affirmative action in favor of blacks and Hispanics is acknowledged.
2) Admissions officers in the Ivy League appear to limit Asian admissions somewhat relative to the numbers of qualified applicants.
3) They may also admit somewhat more Jewish applicants than would be warranted relative to their comparative academic qualifications.
The degree to which this is true is muddled by the difficulty of identifying Jews by surnames, by extensive intermarriage, by
changing demographics within the Jewish population, by geographic factors, and by the propensity to apply in the first place.
4) (My major takeaway.) White Protestants and Catholics are almost certainly the sole groups that are greatly under-represented
relative to their qualifications as well as to raw population percentages.
5) This is due partly to subtle or open discrimination.
6) I would hypothesize that a great many of the white Protestants and Catholics who are admitted are legacies, star athletes,
and the progeny of celebrities in entertainment, media, politics, and high finance. White Protestant or Catholic applicants, especially
from the hinterlands, who don't fit one of these special categoriesthough they must be a very large component of Mr Unz's pool
of top talentare out of luck.
7) And everyone seems to think this is just fine.
The inner and outer ring idea seems to me an excellent one, though the likelihood of it happening is next to nil, both because
some groups would lose disproportionate access and because the schools' imprimatur would be diminished in
value.
The larger point, made by several respondents, is that far too many institutions place far too much weight on the credentials
conferred by a small group of screening institutions. The great advantage of the American system is not that it is meritocratic,
either objectively or subjectively. It is that it isor wasProtean in its flexibility. One could rise through luck or effort
or brains, with credentials or without them, early in life or after false starts and setbacks. And there were regional elites
or local elites rather than, as we increasingly see, a single, homogenized national elite. Success or its equivalent wasn't something
institutionally conferred.
The result of the meritocratic process is that we are making a race of arrogant, entitled overlords, extremely skilled at the
aggressive and assertive arts required to gain admission to, and to succeed in, a few similar and ideologically skewed universities
and colleges; and who spend the remainder of their lives congratulating each other, bestowing themselves on the populace, and
destroying the country.
This article is the product of careful and thoughtful research, and it identifies a problem hiding in plain sight. As a society,
we have invested great trust in higher education as a transformative institution. It is clear that we have been too trusting.
That the admissions policies of elite universities are meritocratic is hardly the only wrong idea that Americans have about
higher education. Blind faith in higher education has left too many people with largely worthless degrees and crushing student-loan
debt.
Of course, the problems don't end with undergraduate education. The "100 reasons NOT to go to grad school" blog offers some
depressing reading:
The higher education establishment has failed to address so many longstanding internal structural problems that it's hard to
imagine that much will change anytime soon.
"I believe that this article raises and then inappropriately immediately dismisses the simplest and most likely reason
for the over-representation of Jewish students at Ivy League Schools in the face of their declining bulk academic performance:
They apply to those schools in vastly disproportionate numbers."
Here's the problem with that point. What Ron Unz demonstrates, quite effectively, is that today's Jews simply don't measure
up to either their Asian or their White Gentile counterparts in terms of actual performance when they get into, say, Harvard.
The quite massive difference in the proportions of those groups who get into Phi Beta Kappa renders this quite undeniable. What
is almost certain is that policies that favored Asians and White Gentiles over the current crop of Jewish students would create
a class of higher caliber in terms of academic performance.
If indeed it's true that Jews apply to Harvard in greater numbers, then, if the desire is to produce a class with the greatest
academic potential, some appropriate way of correcting for the consequent distortion should be introduced. Certainly when it comes
to Asians, college admissions committees have found their ways of reducing the numbers of Asians admitted, despite their intense
interest in the Ivies.
One way of understanding Unz's results here might be not so much that today's Jewish student is far less inclined to hard academic
work than those of yesteryear, but rather that others - White Gentiles and Asians - have simply caught up in terms of motivation
to get into elite schools and perform to the best of their abilities.
Certainly among members of the upper middle class, there has been great, and likely increasing, emphasis in recent years on
the importance of an elite education and strong academic performance for ultimate success. This might well produce a much stronger
class of students at the upper end applying to the Ivies.
It may be that not only the Asians, but upper middle class White Gentiles, are "The New Jews".
I don't always agree with, Mr. Unz, but his expositions are always provocative and informative. As far as the criticisms of
his data set go, he openly admits that they are less than ideal. However, the variances are so large that the margin of error
can be excused. Jews are 40 TIMES more likely to be admitted to Harvard than Gentile whites. Asians are 10 times more likely.
Of course, it could be possible that Jews, because of higher average IQs, actually produce 40 times as many members in the upper
reaches of the cognitive elite.
Given Richard Lynn's various IQ studies of Jews and the relative preponderance of non-Jewish and Jewish whites in the population,
however, whites ought to have a 7 to 1 representation vis-a-vis Jews in Ivy League institutions, assuming the IQ cutoff is 130.
Their numbers are roughly equivalent instead.
Because Ivy League admissions have been a hotbed of ethnic nepotism in the past, it seems that special care should be taken
to avoid these improprieties (or the appearance thereof) in the future. But no such safeguards have been put in place. David Brooks
has also struck the alarm about the tendency of elites to shut down meritocratic institutions once they have gained a foothold:
http://www.nytimes.com/2012/07/13/opinion/brooks-why-our-elites-stink.html?_r=1&ref=global-home
Clannish as the WASPs may have been, they were dedicated enough to ideals of fairness and equality that they opened the doors
for their own dispossession. I predict that a new Asian elite will eventually eclipse our Jewish elite. Discrimination and repression
can restrain a vigorously ascendant people but for so long. When they do, it will be interesting to see if this Asian cohort clings
to its longstanding Confucian meritocratic traditions, embodied in the Chinese gaokao or if it too will succumb to the temptation,
ever present in a multiethnic polity, of preferring ethnic kinsmen over others.
Does anyone know how a minority such as the Uighurs fares in terms of elite Chinese university admissions?
This may sound like special-pleading, but it's not clear that full-scale IQ measures are meaningful when assessing and predicting
Jewish performance. Jewish deficits on g-loaded spatial reasoning task may reflect specific visuo-spatial deficits and not deficits
in g. As far as I know, no one doubts that the average Jewish VIQ is at least 112 (and possibly over 120). This score may explain
jewish representation which seems to exceed what would be projected by their full-scale iq scores. Despite PIQ's correllation
to mathematical ability in most populations, we ought also remember that, at least on the WAIS, it is the VIQ scale that includes
the only directly mathematical subtest. We should also note that Jewish mathematicians seem to use little visualization in their
reasoning (cf. Seligman
That said, I basically agree that Jews are, by and large, coasting. American Jews want their children to play hockey and join
'greek life' and stuff, not sit in libraries . It's sad for those of us who value the ivory tower, but understandable given their
stigmatiziation as a nerdish people.
I wonder if it would be at all possible to assess the political biases of admissions counselors at these schools by assessing
the rates at which applicants from red states are admitted to the elite universities. I suppose you would have to know how many
applied, and those data aren't likely to exist in the public domain.
One major flaw with this article's method of determining Jewish representation: distinctive Jewish surnames in no way make
up all Jewish surnames. Distinctive Jewish surnames happen to be held by only 10-12% of all American Jews. In fact, the third
most common American Jewish surname after Cohen and Levy is Miller. Mr. Unz' methodology does not speak well for itself, given
that he's comparing a limited set of last names against a far more carefully scrutinized estimate.
I'm not suggesting his estimate of national merit scholars and the like is off by a full 90%, but he's still ending up with
a significant undercount, possibly close to half. That would still mean Jews may be "wrongfully" over-represented are many top
colleges and universities, but the disproportion is nowhere near as nefarious as he would suggest.
@Nick the "red state" application and admission rates isn't useful data.
Short answer: There are many reasons for this, but basically, historical momentum and comfort play a much bigger role in where
kids apply than we think. I assure you, far more top Nebraska HS seniors want to be a Cornhusker than a Crimson, even though many
would find a very receptive consideration and financial aid package.
Long answer: 1st, although this article and discussion have been framed in broad racial/cultural terms, the mechanics of college
admissions are mostly local and a bit like athletic recruiting coverage (and cultivation) of specific regions and districts,
"X" high school historically deliver "X" kinds of candidates, etc. So to the degree we may see broader trends noted in the article
and discussion, some of that is rooted at the HS level and lower.
2nd, in "red states", most Ivy applicants come from the few blue or neutral districts. E.g.: the only 2 Utah HS's that consistently
have applicants to my Ivy alma mater are in areas that largely mirror other high-income, Dem-leaning areas nationwide rather than
the rest of Utah.
3rd, but, with some variation among the schools, the Ivy student body is more politically balanced than usually assumed. Remember,
most students are upper-income, Northeastern suburban and those counties' Dem/Rep ratio is often closer to 55/45 than 80/20.
But to wrap up, ideology plays a negligible role in admissions generally (there's always an exception); they have other fish
to fry (see below).
"Quota against Asians" is not entirely wrong, but it's too strong because it implies the forward intent is about limiting their
numbers.
Put another way, Unz believes the Ivies are failing their meritocractic mission by over-admitting a group that is neither disadvantaged
nor has highest technical credentials; and this comes at the expense of a group that is more often disadvantaged and with higher
technical credentials. The Ivies would likely reply, "well, we define 'meritocractic mission' differently".
That may be a legitimate counter, but it's also what needs more expansion and sunlight.
But Unz' analysis has a broader causation vs correlation gap. Just because admissions is essentially zero-sum doesn't mean
every large discrepancy in it is, even after allowing for soft biases. I've mentioned these earlier in passing, but here are just
a couple other factors of note:
Admissions is accountable for selection AND marketing and matriculation these are not always complementary forces. Essentially,
you want to maximize both the number and distribution (racial, geographic, types of accomplishment, etc.) of qualified applicants,
but also the number you can safely turn down but without discouraging future applications, upsetting certain stakeholders (specific
schools, admissions counselors/consultants, etc.) or "harming" any data in the US News rankings. And you have a very finite time
to do this, and not just your competition, but the entire sector is essentially doing this at the same time. You can see how
an admissions process would develop certain biases over time to limit risks in an unpredictable, high volume market, even if rarely
intended to target a specific group. Ivy fixation (but especially around HYP) is particularly concentrated in the Northeast
a sample from several top HS' across America (public and private) would show much larger application and matriculation variations
among their top students than would be assumed from Unz's thesis. Different Ivies have different competitors/peers, which influences
their diversity breakdowns to some degree, they all co-compete, but just as often don't. E.g.: Princeton often overlaps with
Georgetown and Duke, Columbia with NYU and Cooper Union, Cornell with SUNY honors programs because it has some "in state" public
colleges, etc.
There's much more, of course, but returning to Unz's ethnographic thesis, I have this anecdote: we have two friends in finance,
whose families think much of their success. The 1st is Asian, went to Carnegie Mellon, and is a big bank's trading CTO; the 2nd
is Jewish, went to Wharton, and is in private equity.
Put another way, while both families shared a pretty specific vision of success, they differed a lot in the execution. The
upper echelon of universities, and the kinds of elite-level mobility they offer, are much more varied than even 25 years ago.
While the relative role of HYP in our country, and their soft biases in admission, are "true enough" to merit discussion, it's
probably not the discussion that was in this article.
While you may have a point as to the difficulty in some cases of identifying a Jewish surname, the most important thing methodologically
is that the criteria be performed uniformly if one is comparing Jewish representation today vs. that of other periods. I can't
think, for example, of any reason that Cohens or Levys or Golds should be any less well represented today as opposed to many years
ago if indeed there has not been an underlying shift in numbers of Jews in the relevant categories. (Nor, for that matter, should
issues like intermarriage affect the numbers much here - for every mother whose maiden name is Cohen who marries a non-Jew with
a non-Jewish surname, and whose half Jewish child will be counted as non-Jewish, there is, on average, going to be a man named
Cohen who will marry a non-Jew, and whose half Jewish child will be counted as Jewish.)
One might suppose that all this "inequity" and "discrimination" matters if we're keeping score. However, seems to me that too
much emphasis is typically placed on equality whereas real criteria in productive and satisfying lives are neglected. Kind'a like
some people wanting bragging rights as much, if not more, than wanting positive reality.
I guess I just went about my way and lived a pretty god life (so far). Who knows?; maybe those "bragging rights" are meaningful.
Ditto to many comments about the "last name problem", even if its correction weakens but doesn't invalidate the argument. (One
imagines, chillingly, a new sub-field: "Jewish last name theory", seeking to determine proportionalities of classic names validated
against member/donor lists of synagogues and other Jewish organizations.)
Regarding the 20% inner ring suggestion, it suffers from its harsh transition. Consider a randomized derating scheme: a random
number between some lower bound (say 0.90) and 1.00 is applied to each score on the ranked applicant list.
The added noise provides warmth to a cold test scores list. Such an approach nicely captures the directive: "study hard, but
it's not all about the grades".
By adjusting the lower bound, you can get whatever degree of representativeness relative to the application base you want.
That it's a "just a number" (rather than a complex subjectivity-laden labyrinth incessantly hacked at by consultants) could
allow interesting conversations about how it could relate to the "top 1% / bottom 50%" wealth ratio. The feedback loop wants closure.
You missed my point, candid. A relatively small proportion of Jews, intermarried or otherwise, have distinctive Jewish names.
I didn't make that 10-12% figure up. It's been cited in numerous local Jewish population studies and is used in part (but certainly
far from whole) to help estimate those populations. It's also been significantly dragged down over the years as the Jewish population
(and hence the surname pool) has diversified, not just from intermarriage, but in-migration from groups who often lack "distinctive
Jewish surnames" such as Jews from the former Soviet Union. Consider also that for obvious reasons, Hillel, which maintains Jewish
centers on most campus, has an incentive to over-report by a bit. Jewish populations on college campuses in the distant past were
easier to gather, given that it was far less un-PC to simply point blank inquire what religious background applicants came from.
Again, I'm not saying there isn't a downward trend in Jewish representation among high achievers (which, even if one were to
accept Unz's figures, Jews would still be triple relative to were they "should" be). But Unz has made a pretty significant oversight
in doing his calculations. That may happen to further suit his personal agenda, but it's not reality.
This is interesting, but I suspect mostly bogus, based on your not having a decent algorithm for discovering if someone's Jewish.
I'm not sure what exact mechanism you're using to decide if a name is Jewish, but I'm certain it wouldn't have caught anyone,
including myself, in my father's side of the family (Sephardic Jews from Turkey with Turkish surnames), nor my wife's family,
an Ellis Island Anglo name. Or probably most of the people in her family. And certainly watching for "Levi, Cohen and Gold*" isn't
going to do anything.
Isn't the point about Jewish over representation in the Ivy League about absolute numbers?
Yes the Jewish demographic has a higher IQ at 115 to the Goyishe Kop 100 but Jewish people are only 2% of the population so
you have 6 million Jewish people vying with 200 million white Goys for admission to the Ivy League and future control of the levers
of power. That is a 33 times larger Bell curve so the right tail of the Goys' Bell curve is still much larger than the Jewish
Bell curve at IQ levels of 130 and 145, supposedly there are seven times more Goys with IQs of 130 and over 4 times more Goys
with IQs of 145. So why the equality of representation, one to one, Jewish to white Goy in the Ivy Leagues?
Russell K. Nieli on study by Thomas Espenshade and Alexandria Radford (mentioned by Unz):
"When lower-class whites are matched with lower-class blacks and other non-whites the degree of the non-white advantage becomes
astronomical: lower-class Asian applicants are seven times as likely to be accepted to the competitive private institutions as
similarly qualified whites, lower-class Hispanic applicants eight times as likely, and lower-class blacks ten times as likely.
These are enormous differences and reflect the fact that lower-class whites were rarely accepted to the private institutions Espenshade
and Radford surveyed. Their diversity-enhancement value was obviously rated very low."
Having worked with folks from all manner of "elite" and not so elite schools in a technical field, the main conclusion I was
able to draw was folks who went to "elite" colleges had a greater degree of entitlement. And that's it.
If all of the author's suspicions are correct, the most noteworthy takeaway would be that Jewish applicants have absolutely
no idea that they are being given preferential treatment when applying to Ivys.
Not that they think they are being discriminated against or anything, but no Jewish high school student or their parents think
they have any kind of advantage, let alone such a huge one. Someone should tell all these Jews that they don't need to be so anxious!
Also, I know this is purely anecdotal but having gone to an ivy and knowing the numbers of dozens of other Jews who have also
gone, I don't think I have ever witnessed a "surprise" acceptance, where someone got in with a score under the median.
I don't doubt for a minute that it's increasingly difficult for Asian students to get into so-called "elite" universities.
Having grown up in that community, I know a lot of people who were pressured into applying at Harvard and Yale but ended up *gasp*
going to a very good local school. My sarcasm aside, we can't really deny that having Harvard on your CV can virtually guarantee
a ticket to success, regardless of whether or not you were just a C student. It happens.
But what worries me about that is the fact that I know very well how hard Asian families tend to push their children. They
do, after all, have one of the highest suicide rates and that's here in the US. If by some means the Asian population at elite
universities is being controlled, as I suspect it is, that's only going to make tiger mothers push their children even harder.
That's not necessarily a good thing for the child's psyche, so instead of writing a novel here, I'll simply give you this link.
Since the author brought up the subject of Amy Chua and her book, I think it's a pretty fitting explanation of the fears I have
for my friends and their children if this trend is allowed to continue.
As a former admissions staff person at Princeton, I always sigh when I read articles on elite college admissions processes
which build cases on data analysis but which fail to consult with admissions experts on the interpretation of that data.
I am neither an expert in sociology, nor am I a statistician, but I have sat in that chair, reading thousands of essays, and
I have a few observations:
The most selective part of any college's admissions process is the part where students themselves decides whether or not to apply.
Without data on the actual applicant sets, it is, at the least, misleading to attribute incongruities between the overall population's
racial/ethnic/income/what-have-you characteristics and the student bodies' make-ups entirely to the admission decisions. The reality
is that there is always a struggle in the admission offices to compensate for the inequities that the applicant pool itself delivers
to their doorsteps. An experienced admission officer can tell you that applicants from cultures where academics and education
are highly valued, and where the emphasis on a single test is quite high, will generally present with very high SAT scores. Race
does not seem to be correlated, but immigrant status from such a culture is highly correlated. (This may partially explain Unz's
observation of a "decline" in Jewish scores, although I also do not believe that the surname tool for determining which scores
are "Jewish" holds much water.) One of the reasons that such students often fare less well in holistic application processes is
that the same culture that produces the work ethic and study skills which benefit SAT performance and GPA can also suppress activities
and achievement outside of the academic arena. Therefore, to say that these students are being discriminated against because of
race is a huge assumption. The true questions is whether the students with higher test scores are presenting activity, leadership
and community contributions comparable to other parts of the applicant pool which are "overrepresented". All of these articles
seem to miss the point that a freshman class is a fixed size pie chart. Any piece that shrinks or grows will impact the other
slices. My first thought upon reading Unz' argument that the Asian slice shrank was, "What other pieces were forced to grow?"
Forced growth in another slice of the class is the more likely culprit for this effect, much more likely than the idea that all
of the Ivies are systematically discriminating against the latest victim. I could go on and on, but will spare you! My last note
is to educate Mr. Unz on what an "Assistant Director" is in college admissions. Generally that position is equivalent to a Senior
Admission Officer (one step up from entry level Admission Officer), while the head of the office might be the Dean and the next
step down from that would be Associate Deans (not Assistant Directors). So while Michelle Hernandez was an Assistant Director,
she was not the second in charge of Admissions, as your article implies. A minor distinction, but one which is important to point
out so that her expertise and experience, as well as my own, as AN Assistant Director of Admission at Princeton, are not overstated.
A last personal note: During Princeton's four month reading season, I worked 7 days a week, usually for about 14 hours a day,
in order to give the fullest, most human and considerate reading of each and every applicant that I could give. I am sure that
the admission profession has its share of incompetents, corruptible people and just plain jerks, and apparently some of us are
not intelligent enough to judge the superior applicants . . . . But most of us did it for love of the kids at that age (they are
all superstars!), for love of our alma maters and what they did for us, and because we believed in the fairness of our process
and the dignity with which we tried to do it.
The sheer numbers of applicants and the fatigue of the long winters lend themselves to making poor jokes such as the "Night
of 1000 Lee's", but a good dean of admission will police such disrespect, and encourage the staff, as mine did, to read the last
applicant of the day with the same effort, energy and attention paid to the first. We admission folk have our honor, despite being
underpaid and playing in a no-win game with regard to media coverage of our activities. I am happy to be able to speak up for
the integrity of my former colleagues and the rest of the profession.
My own position has always been strongly in the former camp, supporting meritocracy over diversity in elite admissions.
When these Ivy League institutions were first begun in the colonial period, they were not strictly speaking meritocratic. The
prevailing idea was that Christocentric education is the right way to go, both from an eschatological and a temporal perspective,
and the central focus was on building and strengthening family ties. The Catholic institutions of higher learning took on the
vital role of preserving Church tradition from apostolic times and were thus more egalitarian and universalist. The results went
far beyond all expectations.
Nothing lasts forever. Your premise misses the essential point that the economy is for man and not vice-versa.
Many of the statements in this article relating to Jews are rather misleading: for while the Hillel data regarding percentage
of students who self-identify as Jews may be fairly accurate, the numbers the author cites based upon "likely Jewish names" are
a gross under-count of the real numbers, leading to the appearance of a large disparity between the two which, in reality, does
not exist. The reason for the under-count is that a large percentage of American Jews have either Anglicized their family name
or intermarried, resulting in their being mistaken for non-Hispanic whites. Thus, one ends up with incorrect statements such as
"since 2000, the percentage (of Jewish Putnam Fellows) has dropped to under 10 percent, without a single likely Jewish name in
the last seven years". The reality is that Jews, by Hillel's definition of self-identified students, have continued to be prominent
among the Putnam Fellows, US IMO team members, and high scorers in the USA Mathematical Olympiad. I have published a careful analysis
of the true ethnic/racial composition of the very top-performing students in these math competitions from recent years (see, Andreescu
et al. Notices of the AMS 2008; http://www.ams.org/notices/200810/fea-gallian.pdf
). For example, Daniel Kane, a Putnam Fellow in 2002-2006, is 100% of Jewish ancestry; his family name had been Cohen before
it was changed. Brian Lawrence was a Putnam Fellow in 2007, 2008, 2010, and 2011; his mother is Jewish. Furthermore, many of the
non-Jewish Putnam Fellows in recent years are Eastern European or East-Asian foreigners who matriculated to college in the US;
they were not US citizen non-Jewish whites or Asian-Americans, respectively. Rather, my data indicate that in recent years both
Jews and Asians have been 10- to 20-over-represented in proportion to their percentage of the US population among the students
who excel at the highest level in these math competitions. The authors conclusions based upon data from other types of competitions
is likely similarly flawed.
The title of this piece captured me to read what it was all about. What was discussed was admissions into elite colleges as
the only focus on "meritocracy" in America. That leaves the tail of the distribution of high IQ people in America, minus those
that make it into elite colleges, to be ignored, especially those that managed to be admitted to Cal Tech, or MIT, or a number
of other universities where significant intellectual power is admitted and fostered. this seems to further the meme that only
the elite graduates run the nation. They may have an early advantage through connections, but I believe that the Fortune 400 CEO's
are fairly evenly spread across the university world.
(1) Jews are better at verbal IQ, Asians at math. Your measures are all math. That woudl be OK if all else were equal across
time, but especially because Jews care a lot about admissions to Ivies, what we'd expect is that with growing Asian competition
in math/science, Jews would give up and focus their energy on drama/writing/service. I wonder if Jewish kids are doing worse in
music competitions too? Or rather- not even entering any more.
(2) For college numbers, adjustment for US/foreign is essential. How many Asians at Yale are foreign? It could well be that
Asian-Americans are far more under-represented than it seems, because they face quota competition from a billion Chinese and a
billion Indians. Cal Tech might show the same result as the Ivies.
(3) A separate but interesting study would be of humanities and science PhD programs. Different things are going on there,
and the contrast with undergrads and with each other might be interseting.
I also learned that Jews are no longer as prominent in math and science achievement, and that's not surprising to me at
all, because everyone in the elite knows that STEM is for Asians and middle-class kids. Jewish parents have learned that colleges
value sports and "leadership" activities more than raw academic achievement and nerdy activities like math olympiads, and that
the most prestigious careers are value transference activities which don't require science or high-level math.
The higher representation of Jews in the Ivies compared to Asians who have better average academic records compared to Jews
(applicants that is ) in the Ivies is due to the greater eligibility of Jews for preferences of every kind in the Ivies. In a
typical Ivy school like Harvard, at least 60% of the freshman class will disappear because of the vast system of preferences that
exists. There is no doubt that there is racial animus involved despite the denials of the Ivies and other private universities
despite the constant denials involved like that of Rosovsky who happens to be a historian by training. Jews are classified as
white in this country, hence there would presumably greater affinity for them among the white Board of Trustees and the adcom
staff. This is in contrast to Asians who do not share the same culture or body physiogonomy as whites do.
I had read the Unz article and the Andrew Goldman response to it. I just do not agree with Unz with his solutions to this problem.
First of all private schools are not going to give legacy preferences and other kinds of preferences for the simple reason that
it provides a revenue stream. Harvard is nothing but a business just like your Starbucks or Mcdonald's on the corner.
Around the world private universities regarded as nothing but the dumping ground of the children of the wealthy, the famous
and those with connections who cannot compete with others with regards to their talent and ability regardless of what anyone will
say from abroad about the private universities in their own country. Bottomline is in other countries , the privates simply do
not get the top students in the country, the top public school does. People in other countries will simply look askance at the
nonsensical admissions process of the Ivies and other private schools, the system that the Ivies use for admission does not produce
more creative people contrary to its claims.
The Goldman response has more to do with the humanities versus math . My simple response to Andrew Goldman would be this :
a grade of A in Korean history is different from a grade of A in Jewish history, it is like comparing kiwis and bananas. The fast
and decisive way of dealing with this problem is simply to deprive private schools of every single cent of tax money that practices
legacy preferences and other kinds repugnant preferences be it for student aid or for research and I had been saying that for
a long time. I would like to comment on the many points that had been raised here but I have no time.
The solution to a lot of problems would be transparency. I'd love to see the admissions and grade data of even one major university.
Public universities should be required to post publicly the names, SAT scores, and transcripts of every student. Allowing such
posting should be a requirement for admission.
The public could then investigate further if, for example, it turned out that children of state senators had lower SAT scores.
Scholars could then analyze the effect of diversity on student performance.
Of course, already many public universities (including my own, Indiana), post the salaries of their professors on the web,
and I haven't seen much analysis or muckraking come out of that.
One factor hinted at in the article, but really needing to be addressed is the "school" that is being attended.
By this, I mean, you need philosophy students to keep the philosophy department going. When I was in college 20 years ago,
I was a humanities major. I took 1 class in 4 years with an Asian American student. 1 class. When I walked through the business
building, it was about 50% Asian.
Could Asian-American students only wanting to go to Harvard to go into business, science, or math be skewing those numbers?
I don't know, but it's just a thought to put out there.
You are preaching to the choir! I blog on this extensively on my Asian Blog: JadeLuckClub. This has been going on for the last
30 years or more! All my posts are here under Don't ID as Asian When Applying to College:
All private schools basically practice legacy prefrences and other kinds of preferences and this practice has been going on
in the Ivies since time immemorial. The income revenue from these gallery of preferences will certainly not encourage the Ivies
to give them up.
In many countries around the world, private universiites are basically the dumping ground for the children of the wealthy ,
the famous and the well connected who could not get into the top public university of their choice in their own country. This
no different from the Ivies in this country where these Ivies and other private universities are just a corral or holding pen
for the children of the wealthy, the famous and the well connected and the famous who could not compete with others based on their
won talent or ability.
Abroad you have basically 3 choices if you could not get into the top public university of that country , they are:
Go to a less competetive public university
Go to a private university
or go abroad to schools like the Ivies or in other countries where the entrance requirements to a public or private university
are less competetive compared to the top public universities in your own home country.
You can easily tell a top student from another country, he is the guy who is studying in this country under a government scholarship
( unless of course it was wrangled through corruption ). the one who is studying here through his own funds or through private
means is likely to be the one who is a reject from the top public university in his own country. That is how life works.
I am generally satisfied with the data that Ron provided about Jews compared to Asians where Jews are lagging behind Asians
at least in grades and SAT scores in the high school level, from the data I had seen posted by specialized schools in NY like
Stuy , Bronx Sci, Brook Tech, Lowell (Frisco ) etc.
Ron is correct in asserting that the Ivies little represents the top students in this country. Compare UCLA and for example.
For the fall 2011 entering freshman class at UCLA , there were 2391 domestic students at UCLA compared to 1148 at Harvard who
scored above 700 in the Math portion of the SAT and there were 439 domestic students who scored a perfect 800 in the Math portion
of the SAT at UCLA, more than Harvard or MIT certainly. For the fall 2012 freshman classs at UCLA the figure was 2409 and 447
respectively.
We can devise a freshman class that will use only income, SATS,grades as a basis of admissions that will have many top students
like UCLA has using only algorithms.
The central test of fairness in any admissions system is to ask this simple question. Was there anyone admitted under that
system admitted over someone else who was denied admission and with better grades and SAT scores and poorer ? If the answer is
in the affirmative, then that system is unfair , if it is in the negative then the system is fair.
I like the comments from Chales Hale. (Nov. 30, 2012) He says: "Welcome to China". It said all in three words. All of these
have been experienced in China. They said there is no new things under the sun. History are nothing but repeated, China with its
5000 years experienced them all.
I meant that there were 439 domestic students in the fall 2011 freshman class at UCLA and 447 domestic students in the fall
2012 freshman class at UCLA who scored a perfect score of 800 in the Math portion of the SAT. In either case it is bigger than
what Harvard or MIT has got.
In fact for the fall 2011 of the entire UC system there were more students in the the freshman class of the entire UC system
who scored above 700 in the Math portion of the SAT than the entire fall 2011 freshman of the Ivy League (Cornell not included
since it is both a public and a private school )'
As I mentioned earlier there were 2409 domestic students in the fall 2012 UCLA freshman class who scored above 700 in the Math
portion of the SAT. We know that Harvard had only 1148 domestic students in its fall 2011 freshman class who scored above 700
in the Math portion of the SAT, why would Harvard ever want to have that many top students like Berkeley or UCLA have ? The answer
to that is simple , it has to do with money. For every additional student that Harvard will enroll it would mean money being taken
out of the endowment .
Since the endowment needs constant replenishment. Where would these replenishment funds come from ? From legacies,from the
children of the wealthy and the famous etc. of course . It would mean more legacy admits, more children of the wealthy admitted
etc.
That would mean that the admission rate at Harvard will rise, the mean SAT score of the entering class will be no different from
the mean SAT scores of the entering freshman classes of Boston University and Boston College
down the road. With rising admission rates and lower mean SAT scores for the entering freshman class that prospect will not prove
appetizing or appealing to the applicant pool.
Harvard ranks only 8th after Penn State in the production of undergrads who eventually get Doctorates in Science and Engineering.
Of course Berkeley has the bragging rights for that kind of attribute.
In the scenario I had outlined above, it would mean that the mean SAT score of the Harvard freshman class will actually go
down if it tried to increase the size of its freshman class and that kind of prospect ia unpalatable to Harvard and that is the
reason as to why it wants to maintain its current " air of exclusivity ".
There is another way of looking at the quality of the Harvard student body. The ACM ICPC computer programming competition is
regarded as the best known college competition among students around the world , it is a grueling programming marathon for 2 or
3 days presumably. Teams from universities around the world vie to win the contest that is dubbed the "Battle of the Brains "
What is arguably sad is that Ivy schools, Stanford and other private schools teams fielded in the finals of the competition are
basically composed of foreign students or foreign born students and foreign born coaches.
The University of Southern California team in this competition in its finals section was made up of nothing but foreign Chinese
students and a Chinese coach. The USC team won the Southern California competition to win a slot in the finals. Apparently they
could not find a domestic student who could fill the bill. However the USC team was roundly beaten by teams from China and Asia,Russia
and Eastern Europe. The last time a US team won this competition was in 1999 by Harvey Mudd, ever since the US had gone downhill
in the competition with the competition being dominated by China and Asia and by countries from Eastern Europe and Russia. Well
I guess USC's strategy was trying to fight fire with fire (Chinese students studying in the US versus Chinese students from the
Mainland ), and it failed.
Thank you Mr. Unz for scratching the surface of the various forms of corruption surrounding elite college admissions. I hope
that your next article further discusses the Harvard Price (and Yale Price and Brown Price etc). The recent press surrounding
the Hong Kong couple suing the person they had retained to pave their children's way into Harvard indicates the extent of the
problem. This Hong Kong couple just were not savvy enough to lay their money down where it would produce results.
Additionally, a discussion of how at least some North Eastern private schools facilitate the corrupt process would be illuminating.
Finally, a more thorough discussion of whether the Asian students being admitted are US residents or nationals or whether they
are foreign citizens would also be worth while and reveal. I suspect, an even lower admit percentage for US resident citizens
of Asian ethnicity.
For these schools to state that their acceptances are need blind is patently untrue and further complicates the admissions process
for students who are naive enough to believe that. These schools should come clean and just say that after the development admits
and the wealthy legacy admits spots are purchased, the remaining few admits are handed out in a need blind fashion remembering
that many of admit pools will already be filled by the development and wealthy legacy admits resulting in extraordinarily low
rates for certain non-URM type candidates (I estimate in the 1% range).
"By contrast, a similarly overwhelming domination by a tiny segment of America's current population, one which is completely
misaligned in all these respects, seems far less inherently stable, especially when the institutional roots of such domination
have continually increased despite the collapse of the supposedly meritocratic justification. This does not seem like a recipe
for a healthy and successful society, nor one which will even long survive in anything like its current form."
I completely agree that it is not healthy for one tiny segment of our population to basically hold all the key positions in
every major industry in this country. If Asians or Blacks (who look foreign) all of a sudden ran education, media, government,
and finance in this country, there would be uproar and resistance. But because Jewish people look like the majority (whites),
they've risen to the top without the masses noticing.
But Jewish people consider themselves a minority just like blacks and Asians. They have a tribal mentality that causes stronger
ethnic nepotism than most other minority groups. And they can get away with it because no one can say anything to them lest they
be branded "jew-hunters" or "anti-semists."
The question is, "where do we go from here?" True race-blind meritocracy will never be instituted on a grand scale in this
country both in education and in the work force. One group currently controls most industries and the only way this country will
see more balance is if other groups take more control. But if one group already controls them all and controls succession plans,
how will there ever be more balance?
If Jews become presidents or regents of universities, that's a credit to their ability. Nothing sinister there.
But when Jews (or anyone) buy into an institution to create the 'Goldman School of Business', or when they give large donations,
that is not a credit to anyone's ability and there may well be something sinister there.
It is no secret that corporations and individuals look for influence, if not control, in return for cash. The same thinking
can easily affect admissions policy.
It's always the same. In spite of all the jingoism about "democracy" and "freedoms" and the "free market capitalist system",
the trail of money obfuscates and corrupts. It is still very true that whoever pays the piper, calls the tune. And naive to believe
otherwise.
How recent was it that Princeton cancelled its anti-Semitism classes for lack of participation, and at least one Jewish organisation
was screaming that Princeton would never get another penny from any Jew, ever.
That is close to absolute control of a curriculum. I give you money, and you teach what I want you to teach.
How far is that from I give you money and you admit whom I want you to admit? Or from I give you money and you hire whom I
want?
A university that is properly funded by the government "the people" doesn't have these issues because there is nothing
you can buy.
Operating educational institutions as a business, just like charities and health care, will always produce this kind of corruption.
Two other points:
1. It occurred to me that the lowly-paid underachiever admissions officers might well have been mostly Jewish, and hired for
that reason, and that in itself could skew the results in a desired manner.
2. I think this is a serious criticism of the othewise excellent article:
At the end, Ron Unz wants us to believe that a $30-billion institution, the finest of its kind in the world, the envy of the
known universe and beyond, the prime educator of the world's most prime elites, completely abandons its entire admissions procedures,
without oversight or supervision, to a bunch of dim-witted losers of "poor human quality" who will now choose the entire next
generation of the nation's elites. And may even take cash payments to do so.
Come on. Who are you kidding? Even McDonald's is smarter than this.
Some of the comments suggest major problems with estimating who is Jewish. But the authors information is underpinned by data
collected by Jewish pressure groups for the purpose of ensuring the gravy train keeps flowing. It's either their numbers, or the
numbers are consistent with their numbers.
This article, to me, is shocking and groundbreaking. I don't think anyone has gone this in-depth into this biased and un-meritocratic
system. This is real analysis based on real numbers.
Why is this not getting more coverage in the media? Why are people so afraid to talk about this?
There is an excellent analysis of this article at The Occidental Observer by Kevin MacDonald, "Ron Unz on the Illusory
American Meritocracy". The MSM is ignoring Unz's article for obvious reasons.
I don't know if there's any truth behind the idea that Japanese Americans have become lazy relative to their Korean and Chinese
counterparts. I've grew up in Southern California, a part of the country with a relatively high percentage of Japanese Americans,
yet I've know very few other Japanese Americans in my life. I can recall one Japanese American classmate in jr. high, and one
Japanese classmate in my high school (who returned to Japan upon graduating). Even at the UC school I attended for undergrad,
I was always the only Japanese person in the every class, and the Japanese Student Association, already meager in numbers, was
almost entirely made up of Japanese International students who were only here for school.
If, in fact, 1% of California is made up of Japanese Americans, I suspect they are an aging population. I also think many 2nd
and 3rd generation Japanese Americans are only partially Japanese, since, out of necessity, Japanese Americans have a very high
rate of out marriage.
The carefully researched article makes a strong case that there is some discrimination against Asian-Americans at the Ivy League
schools.
On the other hand, I don't see how a percentage of 40-60% Asian-Americans at the selective UC schools, even given the higher
percentage of Asian-Americans in California, does not perhaps reflect reverse discrimation, or at least affirmative action on
their behalf. To be sure one way or the other, we would have to see their test scores AND GPA, apparently the criteria that the
UC schools use for admission, considered as well in the normalization of this statistical data.
The replies to date make some good points but also reflect precisely the biases pointed out in the article as likely causing
the discussed distortions.
1) use of name data in achievement vs use of Hillel data for Ivy admits: definitely an issue but is this only one of the measures
used in this study. Focusing only on this obscures the fact that Jewish enrollment as measured over time by Hillel numbers (apples
to apples) increased significantly over the past decade while the percent of Jewish high school age students relative to other
groups declined. One explanation for this surge could be that Jewish students became even more academically successful than they
have been in the past. The achievement data using Jewish surnames is used to assess this thesis in the absence of other better
data. Rejecting the surname achievement data still leaves a huge enrollment surge over time in Jewish attendance at the Ivies
relative to their percentage of the population.
2) many comments accept that the numbers show disproportionate acceptance and enrollment growth but simply then go on to assert
that Jewish students really are smarter (absolutely or in gaming the system) relying on anecdotal evidence that is not at all
compelling. All definitions of "smarter" contain value judgments". Back in the '20s the argument was that the Ivies should rely
more on objective testing to remove bias against the then high testing Jewish students; now the writers argue conveniently wthat
the new subjective tests that are applied to disproportionately admit Jewish students over higher scoring Asians and non-Jewish
Caucasians are better measures. In both cases, there is still an issue of using a set of factors that disproportionately favors
one group. In all such cases of significant disproportionate admits, the choice of the factors used to definemmerit and their
application should be carefully evaluated for bias. The burden of proof should shift to those defending the status quo in this
situation. In any event, it is clear that given the large applicant pool, there is no shortage of non-Jewish caucasians and Asians
who are fully qualified, so if the desire was there for a balanced entering class, the students are available to make it happen
3) the numbers don't break down admissions between men and women. When my child was an athletic recruit to Harvard, we received
an ethnic breakdown of the prior year's entering class. I was surprised to discover that the Caucasian population skewed heavily
male and the non-white/Asian population skewed heavily female. It seemed that Harvard achieved most of its ethnic diversity that
year by admitting female URMs, which made being a Caucasian female the single most underrepresented group relative to its percentage
in the school age population. I'm curious if this was an anomaly or another element of bias in the admissions process.
I will note that there is one flaw in this whole argument, and that flaw is thus:
Harvard and Yale aren't the best universities in the country. As someone who went to Vanderbilt, I knew people who had been
to those universities, and their evaluation was that they were no better and perhaps actually worse than Vanderbilt, which
is "merely" a top 25 university.
While there is a great deal of, shall we say, "insider trading" amongst graduates of those universities, in actuality they
aren't actually the best universities in the country today. That honor probably goes to MIT and Caltech, which you note are far
more meritocratic. But most of the other best universities are probably very close in overall level, and some of them might have
a lot of advantages over those top flight universities.
Or to put it simply, the Ivy League ain't what it used to be. Yeah, it includes some of the best universities in the country,
but there are numerous non-Ivy League universities that are probably on par with them. This may indeed be in part a consequence
of some of what you have described in the article, as well as a sense of complacency.
I suspect that in twenty or thirty years a lot of Ivy League graduates are going to feel a lot less entitled simply because
there has been an expansion of the top while they weren't paying attention.
I'm against the Ivies going up to 30-50% Asian but I'm also against the over-representation of a tiny minority group. This
country is going to go downhill if we continue to let one group skirt a fair application process just because they possess money
and influence. Who will stand up for fairness and equality?
Many of those commenting above don't seem to be picking up on Unz's evidence of bias against white Gentiles, which by meritocratic
measures is far worse than the bias against Asian Americans.
A drop of 70 PERCENT??? What's going on? Why is so much of the discussion that this article has spawned focused only on Asian
Americans and (secondarily) Jews?
National Merit Scholarship semifinalists are chosen based on per-state percentiles.
What this means is that NMS semifinalist numbers would be skewed _against_ a high-performing demographic group to the extent
that group's demographics concentrate geographically. Mr. Unz acknowledges that geographical skewing of Jewish populations is
huge. However, he ignores its effect on the NMS semifinalist numbers he uses as a proxy for academic performance on a _national_
level to predict equitable distributions at _national_ universities.
Please somebody explain to me how this oversight isn't fatal to his arguments
Surely the author must be aware that approximately half the children with "Jewish" names are not fully Jewish. Over half of
the marriages west of the Mississippi are reportedly mixed. Many non-Jews have last names that start with "Gold". Just these two
facts make the entire analysis ridiculous. Hillel does not keep statistics on how Jewish a student is, while many of Levys and
Cohens are not actually Jewish. What would we call Amy Chua's daughters? Jewish or Asian? It is therefore impossible to tease
out in a multi-racial society who is who.
I am an elementary school teacher at a Title One school in northern California. I supported your "English for the Children"
initiative when it was introduced.
However, the law of unintended consequences has kicked in, and what exists now is not at all what you (or anyone else, for that
matter) had intended.
The school day was not lengthened to create a time slot for English language instruction. Instead, history and science classes
were elbowed aside to make way for mediocre English language instruction. These usually worthless classes have crowded out valuable
core academic instruction for English language learners.
To make matters worse, while English language learners are in ESL classes, no academic instruction in science or history can
be given to "regular" students because that would lead to issues of "academic inequity." In other words, if the Hispanic kids
are missing out on history, the black kids have to miss out on it, too.
As a teacher, I hope you will once again consider bringing your considerable talents to focus on the education of low-income
minority children in California.
Could it be that the goal of financial, rather than academic, achievement, makes many young people uninterested in
competing in the science and math competitions sought out by the Asian students? I wonder about the different percentages
of applicants to medical school versus law or business.
I must also add that I am surprised that the author used the word "data" as singular, rather than plural. Shouldn't he be stating
that the data ARE, not IS; or SHOW, not SHOWS.
The author perhaps pays an incredible amount of attention to those with strengths in STEM fields (Science, technology, engineering,
and math), even though the proportion of all native-born white students majoring in these fields has plummetted in recent decades.
That means that he overlooks a shift in what kinds of training is considered "prestigious," and that this might be reflected in
the pursuits of students in high school. Perhaps there is a movement away from Jewish students' focus on Math Olympiad because
they are in no way interested in majoring in math or engineering fields, instead preferring economics or business. Is that the
fault of the students, or of the rewards system that corporate America has set up?
Jobs in STEM fields pay considerably less than do jobs in numerous professions - investment banking and law. So that is why
~ 40% of the Harvard graduating class - including many of its Jewish students - pursue that route. But to rely on various assessments
of math/science/computing as the measure of intelligence fails to incorporate how the rewards structure in our society has changed
over time.
I teach at an Ivy League university, and believe that many of the authors' arguments have merit, but there are also many weaknesses
in his argument. He sneers at Steinberg and the other sociologists he cites for not quite getting how society has changed - but
he clearly doesn' tunderstand how other aspects of our society have changed. Many of our most talented undergrads have no desire
to pursue careers in STEM fields. Entrance into STEM jobs even among those who majored in those fields is low, and there is very
high attrition from those fields, among both men and women. Young adults and young professionals are voting with their feet. While
our society might be better off with more Caltech grads and students interested in creating our way to a better future rather
than pursuing riches on wall street, one cannot fault students for seeking to maximize their returns on their expensive education.
That's the system we have presented them with, at considerable cost to the students and their families.
Personally, what I found profoundly disturbing is not the overrepresentation of Jewish students or the large presence of Asians
who feel they are discriminated against, but the fact that Ivy League schools have not managed to increase their representation
of Blacks for the last 3 decades. We all compete for the same talent pool. And until the K-12 system is improved, Black representation
won't increase without others screaming favoritism. The other groups - high performing Asians, middle class Jews - will do fine,
even if they don't get into Ivy League schools but have to "settle" for elite private schools. But if the Ivy Leagues are the
pathway to prestige and power, than we're not broadening our power base enough to adequately reprewsent the demographic shifts
reshaping our nation. more focus on that, please.
I've been an SAT tutor for a long time in West Los Angeles (a heavily Asian city), and I feel that at least some of Asians'
over-representation in SAT scores and NMS finalists is due to Asian parents putting massive time and money into driving their
children's success in those very statistics.
In my experience, Asian parents are more likely than other parents to attempt to ramrod their kids through test prep in order
to increase their scores. For example, the few students I've ever had preparing for the PSAT - most students prepare only for
the SAT - were all Asian.
Naturally, because it's so strange to be preparing for what is supposed to be a practice test, I asked these parents why their
9th or 10th grade child was in this class, and the answer was that they wanted to do well on the PSAT because of its use in the
NMS! Similarly, many Asian immigrants send their children to "cram school" every day after regular school lets out (and I myself
have taught SAT at one of these institutions), essentially having their students tutored in every academic subject year-round
from early in elementary school.
Because whites are unlikely to do this, it would seem to me that the resulting Asian academic achievement is analogous to baseball
players who use steroids having better stats than baseball players who do not.
It seems reasonable that the "merit" in "meritocracy" need not be based solely on test scores and grades, and that therefore
a race-based quota system is not the only conclusion that one can draw from a decrease in the attendance rate of hard-driving
test-preppers. Maybe the university didn't want to fill its dorms with grade-grubbers who are never seen because they're holed
up in the library 20 hours a day, and grade-grubbers just happen to be over-represented in the Asian population?
Unz's piece analyzes only the data that lead up to college - when the Asian parents' academic influence over their children
is absolute - whereas the Ivy League schools he criticizes are most concerned with what their students do during and after college.
Is the kid who went to cram school his entire life as likely to join student organizations? To continue practicing his four instruments
once his mom isn't forcing him to take lessons 4 days a week? To start companies and give money to his university? Or did he just
peak early because his parents were working him so hard in order to get him into that college?
However, the remedies considered are not. It is silly to believe that all abilities can be distilled into a small set of numbers,
and anyway, no one knows what abilities will succeed in marketplaces. The source of the problem is the lack of competition in
education, including higher education, a situation written in stone by current accreditation procedures. The solution to the problem
is entry. Remember Brandeis U? With sufficient competition, colleges could take whomever they pleased, on whatever grounds, and
everyone would get a chance.
Concerning the drop in non-Jewish white enrollment:
I am a recent graduate of a top public high school, where I was a NMS, individual state champion in Academic Decathlon, perfect
ACT score, National AP Scholar, etc. etc. Many of my friends almost exclusively white and Asian had similar backgrounds and
were eminently qualified for Ivy. None of us even applied Ivy, let alone considered going there. Why? At $60,000/yr, the cost
is simply not worth it, since none of us would have been offered anything close to substantial financial aid and our parents were
unable/unwilling to fully fund our educations. Meanwhile, my Asian friends applied to as many Ivies as they could because it was
understood that (a) their parents would foot the bill if they got in or (b) they would take on a large debt load in order to do
it.
This article discounts financial self-selection, which (at least based on my own, anecdotal evidence) is more prevalent than
we tend to think.
The author ignores the role that class plays in setting kids up for success. At one point he notes, "Given that Asians
accounted for just 1.5 percent of the population in 1980 and often lived in relatively impoverished immigrant families. . ."
When I was at Harvard in the mid-1980s, there were two distinct groups of Asian students: children of doctors, academics, scientists
and businesspeople who came from educated families in China, Korea and Vietnam, and therefore grew up with both strong educational
values and parental resources to push them; and a much smaller group of kids from Chinatown and Southeast Asian communities,
whose parents were usually working class and uneducated. The second group were at a severe disadvantage to the first, who were
able to claim "diversity" without really having to suffer for it.
I would expect you'd see the same difference among higher-caste educated South Asian Brahmins and Indians from middle and
lower castes or from places like Guyana. It is ridiculous to put South Asians and East Asians in the same category as "Asian."
They have different cultural traditions and immigration histories. Ask any Indian parent what race they are and they'll answer
"Caucasian." Grouping them without any kind of assessment of how they might be different undermines the credibility of the
author.
The takeaway is not that affirmative action is damaging opportunities for whites, but that whites are losing against Asians.
The percentage of Hispanic and Black students at leading schools is still tiny. Hence, if invisible quotas for Asians are lifted,
there will be far fewer white students at these schools. This isn't because of any conspiracy, but because white students are
scoring lower than the competition on the relevant entry requirements. I would love to see an article in this publication titled,
"Why White Students Are Deficient." How about some more writing about "The White Student Achievement Gap?"
As parents of 2 HYP grads, We can tell you from experience that Asian students are not under-represented in the Ivies today.
(In fact, I think they are slightly over represented, for the same reasons and stats the author cited).
True, if one looks at stats, such as SAT, scientific competition awards etc, it seems to imply that a +35% enrollment of Asian
students is warranted. However, these indicators are just a small part of a "holistc" approach in predicting the success of a
candidate not only in the next 4 years, but the individual's success in life and be able to impact and contribute to society later.
I have seen candidates of Asian background, who score almost full mark in SAT but was less than satisfactory in all other aspects
of being a potential achiever in life.
Granted, if one wants to be an achiever in science and technology, by all means go with Caltech and MIT. But if one wants an
real "education" and be a leader later on in life, one has to have other qualities as well (skin color is NOT one of them). Of
course, history, and current cultural and political climate may influence the assessment of such qualities because it is highly
subjective. (Is is unfair to pick a pleasant looking candidate over a lesser one, if the rest are the same?)
That is why an interview with the candidates is a good way to assess a potential applicant. I always encourage my children
to conduct interviews locally for their alma mater.
I just hope that the Ivies do not use this holistic approach to practice quota policies.
Here's a quote from a friend just today about this related topic: "Just like the Catholic church in the middle ages recruited
the smartest peasants in order to forestall revolutionary potential, and to learn mind bending religious dogma to befuddle the
remaining peasants, current practice is much the same. To twist Billy Clinton's mantra, "its the economy stupid", No ,"its the
co opted brains"! "
We can substitute economics dogma to the befuddlement mix. The bottom line is every ruling elite has co-opted the top 1%-5%
of high wage earners, to make the pyramid work. Sociology writing is all over this. Veblen, Weber, etc. We can see this little
group created everywhere minerals or natural resources are coveted by private empires.
The universities are doing exactly what they are supposed to do to protect the interests of the Trustees and Donors who run
them for a reason. They are a tool of, not a cause of, the inequality and over-concentration. It is interesting how the story
goes into hairsplitting and comparing Asians to others, etc. But, the real story is a well understood sociology story. This article
explains why Napoleon established free public education after the French Revolution.
This is a fascinating article. So much data. So many inferences. It's hardly surprising to any parent of high school students
that college admissions are only marginally meritocratic. Whether that's a good a thing or a bad thing is an open question. I
think meritocracy has a place in college admissions. But not the only place. Consider athletics, which are themselves almost exclusively
meritocratic. Only the best among the best are offered Division I scholarships. The same, I think, applies to engineering schools,
the physical sciences, and (to a lesser degree), elite law schools. It also applies to auto-mechanics, plumbers, and electricians.
Regarding the humanities (a field in which I hold a PhD), not so much. I think Unz's beef is less with admissions policies per
se (which I agree are mind-bogglingly opaque) than with the status of elite institutions. I also think, and I may be wrong, that
Unz appears heading down the Bobby Fisher highway, intimating that those pesky Jews are
America never promised success through merit or equality. That is the American "dream." America promises freedom of
religious belief and the right to carry a gun.
This is a fascinating and extremely important article which I am very eager to discuss privately with the author, having spent
my whole life in higher education, albeit with a unique perspective. I was flabbergasted the findings about Jewish and non-Jewish
white representation, and intrigued, all the more so since my own ancestry is evenly divided between those two groups. I do want
to make one criticism, however of something the author said about the 1950s which I do not think is correct.
At one point in the article the author makes the claim that the breakdown of Ivy League Jewish quotas in the 1950s reflected
the power of Jews in the media and Hollywood. The statistics he gives about their representation there may be correct, but the
inference, I believe, is unsustainable. The Proquest historical database includes the Washington Post, New York Times, and many
other major newspapers. I did a search for "Harvard AND Jewish AND quota" for the whole period 1945-65 and it turned up only 20
articles, not one of which specifically addressed the issue of Jewish quotas at Harvard and other Ivy League schools. The powerful
Jews of that era had reached their positions by downplaying their originsoften including changes in their last namesand they
were not about to use their positions overtly on behalf of their ethnic group. (This could be, incidentally, another parallel
with today's Asians.) Those quotas were broken down, in my opinion, because of a general emphasis on real equality among Americans
in those decades, which also produced the civil rights movement. The Second World War had been fought on those principles.
I could not agree more that the admissions policies of the last 30 years have produced a pathetic and self-centered elite that
has done little if any good for the country as a whole.
It is really refreshing to see in print what we all know by experience, but I have to wonder out loud, what is our higher purpose?
Surely, you have a largely goal than merely exposing corruption in the academy. Lastly, I have to wonder out loud, how would the
predicament of the working class fit into your analysis? I thank you for this scathing indictment of higher ed that has the potential
to offer us a chillingly sobering assessment.
This is why we need to reinstate a robust estate tax or "death tax" as conservatives derisively call it. To break the aristocracy
described in this article. No less than Alexis de Tocqueville said that the estate tax is what made America great and created
a meritocracy (which now is weaker and riddled with loopholes, thus the decline of America). Aristocracies dominated Europe for
centuries because they did not tax the inheritance.
The day when I learned so many Chinese ruling class' offspring are either alumni or current students of Harvard (the latest
example being Bo GuaGua), it was clear to me Harvard's admission process is corrupt. How would any ivy college determine "leadership"
quality? Does growing up in a leader's family give you more innate leadership skills? Harvard obviously thinks so.
Therefore, it's not surprising that Ron said the following on this subject. " so many sons and daughters of top Chinese leaders
attend college in the West ..while our own corrupt admissions practices get them an easy spot at Harvard or Stanford, sitting
side by side with the children of Bill Clinton, Al Gore, and George W. Bush." I hope world peace will be obtained within reach
in this approach.
The chilling factor is a hardworking Chinese immigrant's child in the U.S. would have less chance of getting into ivies than
these children of privileged.
It was also very disappointing to see another Asian parent whose children are HYP alumni saying too many Asians in ivies, despite
the overwhelming evidence showing otherwise.
Perhaps it's to be expected given the length of the article (over 22,000 words), but so many of the objections and "oversights"
raised in the comments are in fact dealt with in detail and with a great deal of respect by Unz in the article itself.
For example, this:
National Merit Scholarship semifinalists are chosen based on per-state percentiles.
What this means is that NMS semifinalist numbers would be skewed _against_ a high-performing demographic group to the extent
that group's demographics concentrate geographically. Mr. Unz acknowledges that geographical skewing of Jewish populations
is huge. However, he ignores its effect on the NMS semifinalist numbers he uses as a proxy for academic performance on a _national_
level to predict equitable distributions at _national_ universities.
Please somebody explain to me how this oversight isn't fatal to his argument
because geographical skewing of Asian populations is also huge, yet we don't witness the same patterning in admissions data
pertaining to Asian students. As the article states: "Geographical diversity would certainly hurt Asian chances since nearly half
their population lives in just the three states of California, New York, and Texas."
Unz goes on to note: "Both groups [Jews and Asians] are highly urbanized, generally affluent, and geographically concentrated
within a few states, so the 'diversity' factors considered above would hardly seem to apply; yet Jews seem to fare much better
at the admissions office."
So there's your answer.
And aside from the fact that your "basic question" has a very simple answer, it's just ludicrous in any case to suggest that
the validity of the entire article rests on a single data point.
There is no doubt this is more of a political issue than the academic one. If only merit is considered then asian american
would constitute as much as 50% of the student population in elite universities. Politically and socially this is not a desired
outcome. Rationale for affirmative action for the african americans and hispanics is same leaving a large population is in elite
institution is not desired, it smacks of segregation.
But the core issue remains unsolved. Affirmative action resulted in higher representation but not the competitiveness of the
blacks. I am afraid whites are going the similar path.
Anyone famliar with sociology and the research on social stratification knows that meritocracy is a myth; for example,
if one's parents are in the bottom decile of the the income scale, the child has only a 3% chance to reach the top decile in his
or her lifetime. In fact, in contrast to the Horatio Alger ideology, the U.S. has lower rates of upward mobility than almost any
other developed country. Social classses exist and they tend to reproduce themselves.
The rigid class structure of the the U.S. is one of the reasons I support progressive taxation; wealth may not always be
inherited, but life outcomes are largely determined by the class position of one's parents. In this manner, it is also a myth
to believe that wealth is an individual creation;most financially successful individuals have enjoyed the benefits of class privilege:
good and safe schools, two-parent families, tutors, and perhaps most important of all, high expecatations and positive peer socialization
(Unz never mentions the importants of peeer groups, which data show exert a strong causal unfluence on academic performance).
And I would challenge Unz's assertion that many high-performing Asians come from impovershed backgrounds: many of them
may undereport their income as small business owners. I believe that Asian success derives not only from their class background
but their culture in which the parents have authority and the success of the child is crucual to the honor of the family. As they
assimilate to the more individualist American ethos, I predict that their academic success will level off just as it has with
Jews.
1. HYP are private universities: the success of their alumni verifies the astuteness of their admissions policies.
2. Mr. Unz equates "merit" with "academic". I wonder how many CalTech undergrads would be, or were, admitted, to HYP (and vice-versa).
3. I would like ethnic or racial stats on, for several examples, class officers, first chair musicians*, job holders, actors^,
team captains, and other equally valuable (in the sense of contributing to an entering freshman class) high-school pursuits.*By
17, I had been a union trombonist for three years; at Princeton, I played in the concert band, the marching band, the concert
orchestra, several jazz ensembles, and the Triangle Club orchestra.^A high school classmate was John Lithgow, the superb Hollywood
character actor. Harvard gave him a full scholarship and they should have.
What if we were one homogeneous ethnic group? What dynamic would we set up then?
I suggest taking the top 20% on straight merit, based on SAT scores, whether they crammed for them or not, and take the next
50% from the economically poorest of the qualified applicants (1500 1600 on the SAT?) by straight ethnicity percentages to directly
reflect population diversity, and 30% at random to promote some humility, and try that for 20 years and see what effects are produced
in the quality of our economic and political leadership. And of course, keep them all in the dark as to how they actually got
admitted.
Maybe one effect is that more non-ivy league schools will be tapped by the top recruiters.
"Surely the author must be aware that approximately half the children with "Jewish" names are not fully Jewish. Over
half of the marriages west of the Mississippi are reportedly mixed. Many non-Jews have last names that start with "Gold". Just
these two facts make the entire analysis ridiculous. Hillel does not keep statistics on how Jewish a student is, while many
of Levys and Cohens are not actually Jewish. What would we call Amy Chua's daughters? Jewish or Asian? It is therefore impossible
to tease out in a multi-racial society who is who."
Well, there are several arguments to be made. First, unless you are advocating that there has been a mass adoption of words
like "Gold" in non-Jewish last names these past 10, 15 years, that argument sinks like a stone. Second, by selecting for specifically
Jewish last names, intermarriage can be minimized but not eliminated. How many kids with the lastname "Goldstein" was a non-Jew
in the last NMS? Not likely a lot of them.
Intermarriage can account for some fog, but not all, not by a longshot. Your entire argument reeks of bitter defensiveness.
You have to come to grips that Jews have become like the old WASPs, rich, not too clever anymore, and blocking the path forward
for brighter, underrepresented groups.
With all due respect, I was worried that I would get an answer that lazily points to the part of the essay that glosses over
this point (which mind you I had combed through carefully before posting my question). However, I was hoping that in response
someone might respond who had thought a little more carefully about the statistical fallacy in Unz's essay: that far-reaching
statements about nation-wide academic performance can be drawn directly from per-state-percentiles.
Yes, Asian Americans, like Jews, have concentrations. But their geographical distributions differ. Yes, it might be possible
that upon careful analysis of relative distributions of populations and NMS semifinalists in each state Unz might be able to draw
a robust comparison: he might even come up with the same answer. The point that I made is that he doesn't even try.
Given the lengths Unz goes to calculate and re-calculate figures _based_on_ the assumption of _equal_ geographic distributions
among Asians and Jews, it is - and I stand by this - a disservice to the reader that no effort (beyond hand-waving) is made to
quantitatively show the assumption is at all justified.
The statistical analysis used in this article is flawed. The author uses last names to identify the religion (or birth heritage)
of NMS semifinalists? Are you serious? My son was a (recent) National Merit Finalist and graduated from an ivy league university.
His mother is Jewish; his father is not, thus he has a decidedly WASP surname and according to the author's methods he would have
been classified as WASP. With the growing numbers of interfaith and mixed-race children how can anyone draw conclusions about
race and religion in the meritocracy or even "IQ" argument? Anecdotally, my son reported that nearly half his classmates at his
ivy league were at least one-quarter Jewish (one or more parents or one grandparent). To use last names (in lieu of actual demographic
data) to make the conclusion that Jews are being admitted to ivies at higher rates than similarly qualified Asians is irresponsible.
Essentially, the leftist forces in this country are trying to put the squeeze on white gentiles from both directions.
Affirmative action for underachieving minorities to take the place of white applicants.
Meritocracy for highly achieving Asians to push down white applicants, while never mentioning that full meritocracy would push
out other minorities as well (that's not politically correct).
The whole thing has become more about political narrative than actual concern for justice. I want you to know that as an Asian
man who graduated from Brown, I sympathize with you.
Very interesting article. The case that East Asian students are significantly underrepresented and Jewish students overrepresented
at Ivy League schools is persuasive, although not dispositive. The most glaring flaw in the analysis is the heavy reliance on
performance on the PSAT (the discussion of the winners of the various Olympiad and Putnam contests has little informational value
relevant to admissions, since those winners are the outliers on the tail of the distribution), which is a test that can be prepped
for quite easily. Another flaw is the reliance on last names to determine ethnicity, which I doubt works well for Jews, although
it probably works reasonably well for East Asians.
Unfortunately, the article is also peppered with (very) thinly supported (and implausible) claims like Asians are better at
visuospatial skills, worse at verbal skills, and that the situation is reversed for Jews. This kind of claim strikes me as racial
gobbledygook, and at least anecdotally belied if one considers the overrepresentation of Jews among elite chess players, both
in the US and worldwide.
In any event, the fundamental point is that the PSAT (as is the case with all standardized tests) is a fixed target that can
be studied for. Whether one chooses to put in 100s of hours studying for the PSAT is not, and should not be, the only criterion
used for admissions.
I find the relative percentage of East Asians and Jews at schools like MIT (and also Caltech and Berkeley, although obviously
those are in part distorted by the heavy concentration of East Asians in California) as compared to HYP as strong evidence that
the admissions process at HYP advantages Jews and disadvantages East Asians.
I suspect, though, that the advantages Jews enjoy in the admissions process are unconscious and unintentional, whereas the
disadvantages suffered by East Asians are quite conscious and intentional.
The graph entitled "Asians Age 18-21 and Elite College Enrollment Trends, 1990-2011″ is misleading. It contrasts percentage
of enrolled Asian students vs. the total number of the eligible Asian applicants. Therefore, it led to a flawed argument
when comfusing number vs. percentage . For proof, if a similar graph of Hispanic student percentage vs. eligible applicants
were drawn, it would appear that they were discriminated against as well. So would be the Black!
well, even a fair and objective admission criteria can have devastating consequences. here at IIT, we admit about 1 in 100.
this has the same effect on student ethics, career options and so on. in fact, even worse, since IIT is an engineering college,
the very definition of engineering in India has now distorted as serving international finance or distant masters in a globalized
world. our own development problems remain unattended.
also, the above is a part of the current trend of knowledge concentration, i.e., a belief that only a few universities can
impart us "true" knowledge or conduct "true" research.
see http://www.cse.iitb.ac.in/~sohoni/kpidc.pdf
This is a very valuable article. It deals with a subject that has received too little attention. I believe that cultural bias
in many cases outweighs the racial bias in the selection program. Time and again, I have seen young people with great potential
being selected against because they are culturally different from what the selectors are looking for (often people who are like
them culturally). The article's mentioning that students who participated in R.O.T.C., F.F.A. and/or 4H are often passed over
is a good illustration.
It was interesting to note that the girl who wrote an essay on how she dealt with being caught in a drug violation found acceptance.
I suspect that a student with similar academic qualifications who wrote an essay on the negative aspects of drug use would not
be so lucky.
comes news that Yale President Levin's successor will be Peter Salovey, tending to confirm Unz's observations regarding the
grossly disproportionate number of Jewish presidents at Ivy League schools.
All very interesting but I am among the National Merit Scholars from California who has a not obviously Jewish name despite
having two Jewish parents. It was changed in the 1950s due to anti-Semitism and an urge to assimilate. A lot of other names can
be German or Jewish for example. I suspect in light of that and intermarriage cases where the mom is Jewish and the dad is not,
not to mention a lot of Russian names, you may be undercounting Jews among other things. Although to be fair, you are probably
also undercounting some half-Asians given most of those marriages have a white husband and Asian wife.
I'm an Asian HYP grad. I applaud this article for being so extremely well researched and insightful. It's an excellent indictment
of the arbitrariness and cultural favoritism concentrated in the hands of a very small group of unqualified and ideologically
driven admissions officers. And I hasten to add that I am a liberal Democratic, an avid Obama supporter, and a strong proponent
of correcting income inequality and combating discrimination in the workplace.
To me, the most compelling exhibit was the one towards the end which showed the % relative representation of enrolled students
to highly-qualified students (I wish the article labeled the exhibits). This chart shows that in the Ivies, which administer highly
subjective admission criteria, Jews are overrepresented by 3-4x, but in the California schools and MIT, which administer more
objective criteria, Jews are overrepresented by only 0-50%, a range that can easily be explained by methodology or randomness.
This single exhibit is unequivocal evidence to me of systematic bias in the Ivy League selection process, with Jews as the
primary beneficiary. I tend to agree with the author this this bias is unlikely to be explicit, but likely the result of cultural
favoritism, with a decision-making body that is heavily Jewish tending to favor the activities, accomplishments, personalities,
etc. of Jewish applicants.
The author has effectively endorsed one of the core tenets of modern liberalism that human beings tend to favor people who
look and act like themselves. It's why institutions dominated by white males tend to have pro-white male biases. The only twist
here is that the decision-making body in this instance (Ivy League admissions committees) is white-Jewish, not white-Gentile.
So if you're a liberal like me, let's acknowledge that everyone is racist and sexist toward their own group, and what we have
here is Jews favoring Jews. We can say that without being anti-semitic, just like we can say that men favor men without being
anti-male, or whites favor whites without being anti-white.
Just some puzzling statistics: In p. 32, second paragraph, it is mentioned "The Asian ratio is 63% slightly above the white
ratio of 61 percent", then in the third paragraph "However, if we separate out the Jewish students, their
ratio turns out to be 435 percent, while the residual ratio for non-Jewish whites drops to just 28 percent, less than half of
even the Asian figure", leading to the conclusion that "As a consequence, Asians appear under-represented relative to Jews by
a factor of seven, while non-Jewish whites are by far the most under-represented group of all". Not very clear on the analysis!
Let me try to make a guess on the calculation of this statistics ratio: Assume that all groups in NMS will apply, with mA=Asians,
mJ=Jews, mW=Whites be the respective numbers in NMS. Suppose that nA, nJ, and nW are those Asians, Jews, and Whites finally admitted.
Then if the statistics ratio for G means ((nG)/(mG))/(mG/mNMS), where mNMS is the total number in the NMS, then the ratio will
amplify the admission rate (nG/mG) by (mNMS/mG) times and becomes very large or very small for small group size. For example,
for a single person group, being admitted will give a ratio as large as mNMS, and a zero for not being admitted. Why can this
ratio be used for comparing under-representation between different groups?
Very well. Loved the fact that the author put a lot into reseaching this piece. But i would like to know how many asians who
manage to attend this ivy schools end up as nobel leaurets and professors?? This demonstrates the driving force behind the testscore
prowess of the asians-financial motivation. The author talks about asians being under-represented in the ivies but even though
they manage to attend then what?? do they eventually become eintiens and great nobel leurets or great cheese players. Also what
is the stats like for asian poets, novelist, actors.etc Pls focus should be given on improving other non-ivy schools since we
have a lots of high SAT test scores than high running universities.
Look at Nobel prizes, field medals and all kind of prizes and awards that recognize lifetime original academic contributions.
Not many asians there yet. Perfect grades or SAT scores does not guarantee creativity, original thinking, intelectual curiosity
or leadership. The problem is that those things are hard to measure and very easy to fake in an application.
Loved all the research in the article and I am on board with the idea that moving in the tiger mother direction will kill creativity
in young people. And I agree with the observation that our country's top leadership since 1970 or so has been underwhelming and
dishonest especially in the financial services industry which draws almost entirely from the Ivies.
However, I am not so convinced that the over representation of Jewish students in the Ivy league is created by intentional
bias on the part of Jewish professors or administrators at these institutions. Is it possible that admissions officers select
Jewish applicants at such a high rate because they are more likely to actually attend? Once a family of four's income exceeds
$160k the net price calculation for a year at Harvard jumps up pretty quickly. By the time you hit annual income of $200k you
are looking at $43k/yr or $172k for 4 years. And at the lower income levels, even if a family has to pay just $15k a year, how
will they do that if they are struggling to make it as it is? Do they want/does their student want to graduate with $60k worth
of debt? Why not choose a great scholarship offer from a state university to pay nothing at all or go to community college for
2 years and then on to the state public institution?
There are many options for top students who can compete at the Ivy level. If I am an admissions officer looking to fill slots
left over after minority admissions (ones poor enough to get the education for free and thus to say yes), legacies, athletic recruits,
and the few super special candidates, wouldn't I choose those most likely to take me up on the admissions offer and protect my
yield number? Might an easy way to get this done be to consult a demographic tool showing net worth by zip code? And to stack
the yield odds a little more in my favor might I also choose families with Jewish appearing last names knowing they would be extremely
likely to accept my offer since I obviously have recent history to show me that these families say yes to our prices? I think
this is a much more plausible explanation then assuming some secret quota in force at these schools.
I am a conservative but I cannot believe Jewish liberals would go that far just to ensure more Jewish liberals attend their
institutions or to keep conservative white non Jewish middle income students out. Dollars and cents and the perception a yield
number conveys about the desirability of a school are what is at work here in my humble opinion.
There is a very simple solution. There is no legal definition of race. Simply check the "Negro" (or "African-American" or whatever
it is called today) box on the application form. You don't look it? Neither do many others, because your ancestry is really mixed.
This may get you in. It won't hurt your chances, which are essentially zero before you check that box. At the very least, it will
make it harder for the bigots in the admissions office to exercise their bigotry.
"Look at Nobel prizes, field medals and all kind of prizes and awards that recognize lifetime original academic contributions.
Not many asians there yet. Perfect grades or SAT scores does not guarantee creativity, original thinking, intelectual curiosity
or leadership. The problem is that those things are hard to measure and very easy to fake in an application."
Last year, 75% of Ph.D candidates where foreign born, most of which were either Indian or Chinese. You should rely on statistics
that are more current and relevant.
Wow, another article on how corrupt higher eduation is.
Folks, open your eyes a bit. Online education is growing massively; sharing this growth are websites that write academic papers
(even Ph.D. theses) on demands .these websites in toto have nearly as many customers as there are online students.
Harvard is unusual in that they actually banned students for cheating. Every investigation of cheating on campus shows it exists
on a massive scale, and reports of half or more of a class cheating are quite common in the news.
The reason for this is simple: administrators care about retention, nothing else. Faculty have long since gotten the message.
I've taught in higher education for nearly 25 years now, and I've seen many faculty punished for catching cheaters; not once has
there been any reward.
Over 90% of remedial students fail to get a 2-year degree in three years, yet administration sees no issue with talking them
into loans that will keep them in debt forever. Admin sees no issue with exploiting the vulnerable for personal gain, of course.
Here's what higher education is today: desperate people take out loans to go to college. They use the money to pay the tuition,
and they use the money to buy academic papers because they really aren't there for college, they're there for the checks. Their
courses are graded by poorly paid faculty (mostly adjuncts), again paid by those checks. The facutly are watched over by administrators
to make sure there is no integrity to the system and again, admin is paid by those checks (in fact, most of the tuition money
goes to administrators).
Hmm, what part of this could be changed that would put integrity back into the system?
I think your sources who claim to be familiar with China are very wrong concerning entrance into Chinese universities, especially
those so-called upper tier unis. It is well known amongst most Chinese students who take the gaokao, the all-or-nothing university
entrance examination, bribes, guanxi (connections) and just being local, are often better indicators of who will be accepted.
Replies: @KA Same and
some more in India.
In India it is politics of the gutter. Someone can get to medical school and engineering school even if he or she did not qualify,if
scored say 3 points out of 1000 points as long as he or she belonged to lower caste of Hindu. The minimum requirements they have
to fulfill is to pass the school leaving examinations with science subjects .A passing level is all that matters . The process
then continues (in further education -master , training, post doctoral, and in job and in promotion)
While upper caste Hindu or Christian or Muslim may not be allowed despite scoring 999 out of 1000. It is possible and has happened.
Unfortunately the lower caste has not progressed much. Upper caste Hindus have misused this on many occasions and continue to
do do by selling themselves as lower caste with legal loopholes .Muslim or Christians can't do that for they can't claim to be
Hindu
Ron Unz is a brilliant man. He created software that made him rich, and has written articles on all kinds of subjects. But
apparently, Ron shares a problem with a very tiny number of humanity. Ron is one of those oddball characters, that, no matter
where the truth leads him, he simply has to express it, regardless of political correctness. He did this in California with the
debate on English,etc.
Compared to the administrators of these Ivy League Institutions, Ron is a mental giant, not even near being in the same class
as these supposedly important but in reality, worthless beurocrats.
If ten million Gentile whites and Asians changed their surname to Kaplan, Levy, Golden, Goldstein, Goldman, it obviously would
throw a monkey wrench into the process of ethnic favoritism.
To paraphrase Unz - the "shared group biases" of Ivy League college admission officers that have "extreme flexibility and subjectivity",
does harm white Gentiles and Asians, but only because the process lacks objective, meritocratic decision making, and in its place
is a vile form of corrupt cronyism and favoritism.
An Asian speaking here, I agree that America isn't a meritocracy, but has it ever been? It seems like this article's falling
for the oldest trick in the book - looking back at the "good old days". I'd argue that now more than ever, the barrier to entry
is lower than ever, and that every individual can rise to the occasion and innovate for the better. Places like Exeter (my alma
mater) aren't just playgrounds for the rich - I'm not extremely wealthy, and neither were my classmates. Most of us were even
on financial aid. Don't just point fingers at institutions to account for shortcomings - if you had the stroke of fortune to be
born in a nation with such opportunity, with hard work and CREATIVITY and INNOVATION, anything is possible.
Has anyone thought about why the test-prep business has expanded so much? It's to feed into the very same system that you're
complaining about. Be the change you wish to see in the world, not a victim of it. To many of the Asians out there, I'd say get
over your 4.0 GPA and 2400 SAT score and be unique for once.
To put Unz's findings in social and historical perspective, it is important to understand where Jewish academics come from.
The Eastern European Jews who immigrated to Northeast US in the Twentieth Century ran into an immigrant world dominated by Catholics
and particularly Irish Catholics. The Irish, who were as "hungry" as the Jews got control over government and its ancillary economic
benefits. I wasn't there at the time, but I imagine we Irish did not do much to help Jewish immigrants compared with Catholic
immigrants.
One area abandoned by the Catholic Church was public and secular education. The Church formed its own educational Catholic
ghetto. Jewish immigrants adopted the public-secular educational world as their own and became strong adherents of education as
the key to Americanization. Education became their small piece of turf. The only memorable political conflict between Jews and
AfricanAmericans in New York City was over control of the public schools.
Just as the Irish react against affirmative action for non-Irish in government jobs, the descendants of these Jewish immigrants
react to the plagiarism of their assimilation plan by the Chinese/Koreans. When you have de facto Irish affirmative action you
don't want de jure African American affirmative action. When you have Jewish "meritocracy" you don't want Asian meritocracy.
The result is what you see today. The Irish still have a stranglehold on government related jobs in the Northeast with a smattering
of minorities ("New Irish") and the Jews try to protect their secular education turf from the "New Jews". It's just business.
Don't take it personally.
All I can say is see a book: "Ivy League Fools and Felons"' by Mack Roth. Lots of them are kids of corrupt people in all
fields.
But I disagree that opportunity is being closed off to most Americans. Here in North Dakota I work for a high school graduate,
self made trucking millionaire. Five years ago she was a secretary in Iowa. But she got off her butt and went to where the money
is circulating. Just my 2 cents
Sorry, but quick correction regarding rankings (and I only have to say this because I go to MIT). Technically, MIT and Caltech
are *both* ranked the same. The only reason why Caltech appears on the list before MIT is because it come before it alphabetically
to suggest otherwise would be untrue. When you look at individual departments, you'll find that MIT consistently ranks higher
than that of Caltech in all engineering disciplines and most scientific disciplines. Also, personally speaking, MIT has a far
better humanities program that Caltech (especially in the fields of economics, political science, philosophy, and linguisitics).
We do have a number of Pulitizer Prize winners who teach here.
Also generally, in academic circle, MIT is usually viewed with higher regard than Caltech, although that isn't to say Caltech
isn't a fantastic school (it really and truly isI loved it there and I wish more people knew more about it)
One observation about methodology that struck me while reading this:
The Jewish population of universities is being evaluated based on Hillel statistics, with the "Non-Jewish white" population
being based on the white population minus the Jewish population.
This can be problematic when you consider that these population are merging at a pretty high rate. (I don't have much information
here, but this is from the header of the wikipedia article: "The 1990 National Jewish Population Survey reported an intermarriage
rate of 52 percent among American Jews.")
What percentage of partially Jewish students identify as "Jewish" or does Hillel identify as Jewish? If you're taking a population
that would have once identified as "white" and now identifying them as Jewish, obviously you'll see some Jewish inflation, and
white deflation. And when a large percentage of this population bears the names "Smith", "Jones", "Roberts" etc., you're obviously
not going to see a corresponding increase in NMS scores evaluated on the basis of last names.
Of course, I have no idea what methodology Hillel is using, but I wouldn't be surprised to learn that it's an inflated one.
Thank you Mr. Unz for this provocative article. It isn't the author's first one on Jewish & Asian enrollment at Ivy League
colleges. I remember another one, in the 1990s I believe.
According to what I read, less and less American Jews apply for medical school nationwide, and Jewish women are very educated,
but it comes also with a low birthrate and high median age. It makes the recent spike in Jewish admissions at Harvard College
all the more curious, intriguing.
This month, the NY Times published a list of the highest earners in the hedge fund industry in 2012, and 8 out of 10 were Jewish.
Are certain universities aggressively seeking donations from this super rich demographic since the 2000s?
The young American Jew is not like his grandparents. They are just as fun loving and lazy as any other. This is the result
of a lack of perceived persecution that use to keep the group together. In the major cities, half of the young people leave the
tribe through intermarriage. This is human nature. The Rabbis changed the rules some time ago to define a Jew as coming from the
mother, so the Jewish man would marry a Jewish woman, instead of a woman outside of the tribe. Read the Bible. In David's time,
the men had an eye for good looking women outside of the tribe(like all men). Now days, the young people just laugh at the Rabbi's
words.
Instead of the old folks liberal ideas of race and ethnic divisions, let us change it to go by economic class. According to
liberal thought, intelligence is equally distributed throughout all economic classes, so higher education admissions should be
by economic class, and not the old divisive ideas of race and ethnic background. After all, affirmative action programs are institutionalized
racism and racial profiling.
Replies: @KA Yes . You
have points . This is one of the fears that drove the Zionist to plan of Israel in 1880 . It was the fear of secular life free
from religious persecution and freedom to enjoy life to its fullest in the post industrial non religious Europe guided by enlightenment
that drove them embrace the religious ethnic mix concept of statehood.
These and many other ills would be alleviated if government would stop: (a) banning aptitude tests or even outright discrimination
as determinants of employment; (b) subsidizing private institutions such as Harvard; and (c) close down all government schools,
starting with state institutions of "higher learning."
I know, pie in the sky. But the author's suggestions by comparison are mere Band-Aids.
Great analysis, but pie-in-the-sky prescription, which was presumably just intended to be thought provoking. If you want to
know why Harvard would never adopt the author's recommendation, just read what he wrote:
"But if it were explicitly known that the vast majority of Harvard students had merely been winners in the application lottery,
top businesses would begin to cast a much wider net in their employment outreach, and while the average Harvard student would
probably be academically stronger than the average graduate of a state college, the gap would no longer be seen as so enormous,
with individuals being judged more on their own merits and actual achievements. A Harvard student who graduated magna cum laude
would surely have many doors open before him, but not one who graduated in the bottom half of his class."
I wonder why Harvard officials would desire this outcome?
So a lot of ivy league presidents with Jewish-sounding names somehow influence admissions staff who may not have Jewish-sounding
names to favor undeserving applicants because they also have Jewish-sounding names? And this is because of some secret ethnic
pride thing going on? And nobody's leaked this conspiracy to the outside world until our whistle blowing author? The guy's a nut
job.
All of your statistics are highly suspect due to the enormous, and rapid annual increase in Jewish intermarriage. I do not
have the statistics, but over many years, it certainly appears that Jewish men are far more likely to intermarry than Jewish women
(the lure of the antithesis to their Jewish mother??) and to complicate matters further, Jewish men seem to have a predilection
for Asian women, at least in the greater NY Metro Area. But that still does not represent the majority of Jewish men marrying
Christians. QED. More Jewish last names, for children who are DNA wise only half Jewish than non Jewish names for the intermarried.
And if one wanted to get really specific, the rapidly rising intermarriage is diluting the "Jewish" genetic pool's previously
demonstrable intelligence superiority., strengthened by the fact that most couples use the Jewish fathers last name.
These observations are in no way associated with how the various Jewish denominations define 'Jewish"
In short: Unz substantially overestimated the percentage of Jews at Harvard while grossly underestimating the percentage of
Jews among high academic achievers, when, in fact, there is no discrepancy.
In addition, Unz's arguments have proven to be untenable in light of a recent survey of incoming Harvard freshmen conducted
by The Harvard Crimson, which found that students who identified as Jewish reported a mean SAT score of 2289, 56 points higher
than the average SAT score of white respondents.
First. I was thrilled to see your advocacy of admissions by lottery. I have advocated such a plan on various websites that
I participate in, but you have written the first major article advocating it that I have seen. Congratulations.
Just a small quibble with your plan, I would not allow the schools any running room for any alternatives to the lottery. They
have not demonstrated any willingness to administer such a system fairly. After a few years of pure lottery it would be time to
evaluate it and see if they should be allowed any leeway, but I wouldn't allow any variation before that.
I would hypothesize that one effect of a lottery admissions plan would be a return to more stringent grading in the class rooms.
It would be useful to the faculty to weed out the poor performers more quickly, and the students might have less of an attitude
of entitlement.
Second, I am glad that you raised the issue of corruption of the admissions staffs. It would be a new chapter in human history
if there was no straight out bribe taking of by functionaries in their positions. My guess is that the bag men are the "high priced
consultants". Pay them a years worth of tuition money and a sufficient amount will flow to the right places to get your kid in
to wherever you want him to go.
Third, three observations about Jewish Students.
First, Jews are subject to mean reversion just like everybody else.
Second, the kids in the millennial generation were, for the most part, born into comfortable middle class and upper class homes.
The simply do not have the drive that their immigrant grandparents and great-grandparents had. I see this in my own family. My
wife and I had immigrant parents, and we were pretty driven academically (6 degrees between us). Our kids, who are just as bright
as we were, did not show that same edge, and it was quite frustrating to us. None of them have gone to a graduate or professional
school. They are all working and are happy, but driven they aren't.
Third, Hillel's numbers of Jewish students on their website should be taken cum grano salis. All three of our kids went to
Northwestern U. (Evanston, IL) which Hillel claimed was 20% Jewish. Based on our personal observations of kids in their dorms
and among their friends, I think the number is probably 10% or less.
Finally, the side bar on Paying Tuition to a Hedge Fund. I too am frustrated with the current situation among the wealthy institutions.
I think that it deserves a lot more attention from policy makers than it has received. The Universities have received massive
benefits from the government (Federal and state) - not just tax exemptions, but grants for research and to students, subsidized
loans, tax deductions for contributions, and on, and on. They have responded to this largess by raising salaries, hiring more
administrators, spending billions on construction, and continually raising tuitions far faster than the rate of inflation. I really
do not think the tax payers should be carrying this much of a burden at a time when deficits are mounting without limit.
Henry VIII solved a similar problem by confiscating assets. We have constitutional limits on that sort of activity, but I think
there a lot of constitutional steps that should be considered. Here a few:
1. There is ample reason to tax the the investment gains of the endowments as "unrelated business taxable income" (UBTI, see
IRS Pub 598 and IRC §§ 511-515) defined as income from a business conducted by an exempt organization that is not substantially
related to the performance of its exempt purpose. If they do not want to pay tax on their investments, they should purchase treasuries
and municipals, and hold them to maturity.
2. The definition of an exempt organization could be narrowed to exclude schools that charge tuition. Charging $50,000/yr and
sitting on 30G$ of assets looks a lot more like a business than a charity.
3. Donations to overly rich institutions should be non deductible to the donors. Overly rich should be defined in terms of
working capital needs and reserves for depreciation of physical assets.
Is the proposed mechanism that Jewish university presidents create a bias in the admissions department?
That could be tested by comparing Jewish student percentages between schools with Christian and Jewish presidents. If Christian
presidents produce student bodies with a high proportion of Jews, then Jewish ethnocentrism is not the cause. (We'd have to find
a way to control for presidents' politics.)
If admissions departments are discriminating in favor of liberals, that will boost the proportion of all liberals, including
many Jews, but it will be political discrimination, not ethnic discrimination. (Both are bad, but we should be accurate.)
Liberals see a discrepancy in ethnic outcomes and consider it proof of ethnic discrimination. Are we doing the same thing?
After Russian emancipation, the Jews from Pale settlement spread out and took up jobs in government services, secured admissions
in technical and medical schools, and established positions in trade in just two decades. Then they started interconnecting and
networking more aggressively to eliminate competition and deny the non-Jews the opportunities that the non Jews rightfully claimed.
This pattern was also evident in Germany after 1880 and in Poland between interwars .
The anti-Jewish sentiment seen in pre revolutionary Russia was the product of this ethnic exclusivisity and of the tremendous
in-group behaviors .
@Ira The young American
Jew is not like his grandparents. They are just as fun loving and lazy as any other. This is the result of a lack of perceived
persecution that use to keep the group together. In the major cities, half of the young people leave the tribe through intermarriage.
This is human nature. The Rabbis changed the rules some time ago to define a Jew as coming from the mother, so the Jewish man
would marry a Jewish woman, instead of a woman outside of the tribe. Read the Bible. In David's time, the men had an eye for good
looking women outside of the tribe(like all men). Now days, the young people just laugh at the Rabbi's words.
Instead of the old folks liberal ideas of race and ethnic divisions, let us change it to go by economic class. According to
liberal thought, intelligence is equally distributed throughout all economic classes, so higher education admissions should be
by economic class, and not the old divisive ideas of race and ethnic background. After all, affirmative action programs are institutionalized
racism and racial profiling.
Yes . You have points . This is one of the fears that drove the Zionist to plan of Israel in 1880 . It was the fear of secular
life free from religious persecution and freedom to enjoy life to its fullest in the post industrial non religious Europe guided
by enlightenment that drove them embrace the religious ethnic mix concept of statehood.
@Anonymous I think your
sources who claim to be familiar with China are very wrong concerning entrance into Chinese universities, especially those so-called
upper tier unis. It is well known amongst most Chinese students who take the gaokao, the all-or-nothing university entrance examination,
bribes, guanxi (connections) and just being local, are often better indicators of who will be accepted.
Same and some more in India. In India it is politics of the gutter. Someone can get to medical school and engineering school
even if he or she did not qualify, if scored say 3 points out of 1000 points as long as he or she belonged to lower caste of Hindu.
The minimum requirements they have to fulfill is to pass the school leaving examinations with science subjects .A passing level
is all that matters . The process then continues (in further education -master , training, post doctoral, and in job and in promotion)
While upper caste Hindu or Christian or Muslim may not be allowed despite scoring 999 out of 1000. It is possible and has happened.
Unfortunately the lower caste has not progressed much. Upper caste Hindus have misused this on many occasions and continue to
do do by selling themselves as lower caste with legal loopholes .Muslim or Christians can't do that for they can't claim to be
Hindu
Takeaways:
Jews are really good at networking and in-group activity. They have centuries of practice, and lived a meritocratic existence
of self-sorting in the Pale and elsewhere.
That is evident to all who look.
Other groups have different approaches, and different organizational or affiliation bonds, based on their history, culture
and other factors.
NE Asians share some traits, and both value education as a way to improve themselves and to some extent their groups.
S Asians will demonstrate their own approach, focusing heavily on STEM.
Expect demographics to win out, given 2.5B Asians versus a smaller NAM or NE European-base populace.
Thanks for the informative article. Your proposal sounds reasonable. Another option would be to attempt to vastly decrease
the significance of these elite private schools. Why should we allow undemocratic little fiefdoms to largely control entry into
our country's ruling class? It would probably be considerably more fair, more transparent and more efficient to pour a lot of
resources into our public universities. If Berkeley, Michigan, UVA, UMass, etc. were completely free, for instanceor if they
provided students with living expenses as well as free tuition, the quality of their students would conceivably surpass that of
the Ivy League's, and over time the importance and prestige of Harvard, Stanford, etc. would diminish. Instead, we are subsidizing
students at elite private colleges more than those at public collegesan absurd state of affairs (see this article, whose author
is a bit of an ideologue but who is right on this issue:
http://www.csmonitor.com/Business/Robert-Reich/2014/1014/How-the-government-spends-more-per-student-at-elite-private-universities-than-public
).
Mr. Unz; thank you for the long, informational and scholarly article. I read the whole thing, and from Sailer I am familiar
with your reputation as a certified genius. I must admit however, after the 5-10,000 words you had written, I was a bit shocked
that your answer to how to improve elite University enrollment, was to FLIP A FIGURATIVE COIN.
I expected some chart with differential equations that I would have to consult my much more intelligent brother, the electrical
engineer to explain to me. Not that it does not make a lot of sense.
The issue with your solution is that you go from a three class university:
1) Legacy Admits
2) Non athletic, black admits
3) everyone else
to a much-more rigid, two class university:
1) academic admits
2) coin-flip admits
One tier being one of the smartest 15-18 year olds in the world, the other being "somewhat better than good student at Kansas
State."
My brother works at a little ivy league school. Well endowed because the parents Dun and Bradstreet reports are at the top
of the selection sheets with parents jobs also. Extra points for finance and government jobs at executive levels.
This article was excellent and reinforced everything he has told me over the years. One thing he did mention i would like to
add. Asians, which for years were their choice for filling minority quotas, are horrible when it comes to supporting the alma
mater financially during the fund drives. This information was confirmed by several other schools in the area when they tried
a multi-school drive in the far east and south east asia to canvas funds and returned with a pitiful sum.
Diversity is a scheme that is the opposite of a meritocracy. Diversity is a national victim cult that generally demonizes gentiles,
and more specifically demonizes people that conform to a jewish concocted profile of a nazi.
Why would anyone use the word diversity in the same sentence as the word meritocracy?
"Are elite university admissions based on meritocracy and diversity as claimed?" Why would anybody claiming to be intelligent
include meritocracy and diversity in the same sentence?
@Sean Gillhoolley Harvard
is a university, much like Princeton and Yale, that continues based on its reputation, something that was earned in the past.
When the present catches up to them people will regard them as nepotistic cauldrons of corruption.
Look at the financial disaster that befell the USA and much of the globe back in 2008. Its genesis can be found in the clever
minds of those coming out of their business schools (and, oddly enough, their Physics programs as well). They are teaching the
elite how to drain all value from American companies, as the rich plan their move to China, the new land of opportunity. When
1% of the population controls such a huge portion of the wealth, patriotism becomes a loadstone to them. The elite are global.
Places like Harvard cater to them, help train them to rule the world....but first they must remake it.
I agree, common people would never think of derivatives , nor make loans based on speculation .
"Tiffany Wang['s] SAT scores were over 100 points above the Wesleyan average, and she ranked as a National Merit Scholarship
semifinalist "
"Julianna Bentes her SAT scores were somewhat higher than Tiffany's "
Did Ms. Wang underperform on her SATs? NMS semifinalist status depends purely on the score on a very SAT-like test being at
a 99.5 percentile level, as I understand it (and I was one, albeit a very long time ago) and I gather from the above that her
SAT scores did not correspond to the PSAT one. That is, merely " 100 points above the Wesleyan average" doesn't seem all that
exceptional. Or am I wrong?
Mr. Unz several times conflates NMS semifinalist status with being a top student. Which I most definitely was not. It's rather
an IQ test. As was the SAT.
"... Politics must not be subject to the economy, nor should the economy be subject to the dictates of an efficiency-driven paradigm of technocracy. Today, in view of the common good, there is urgent need for politics and economics to enter into a frank dialogue in the service of life, especially human life. ..."
"... Production is not always rational, and is usually tied to economic variables which assign to products a value that does not necessarily correspond to their real worth. This frequently leads to an overproduction of some commodities, with unnecessary impact on the environment and with negative results on regional economies.[133] The financial bubble also tends to be a productive bubble. The problem of the real economy is not confronted with vigour, yet it is the real economy which makes diversification and improvement in production possible, helps companies to function well, and enables small and medium businesses to develop and create employment. ..."
"... Whenever these questions are raised, some react by accusing others of irrationally attempting to stand in the way of progress and human development. But we need to grow in the conviction that a decrease in the pace of production and consumption can at times give rise to another form of progress and development. ..."
"... The principle of the maximization of profits, frequently isolated from other considerations, reflects a misunderstanding of the very concept of the economy. As long as production is increased, little concern is given to whether it is at the cost of future resources or the health of the environment; as long as the clearing of a forest increases production, no one calculates the losses entailed in the desertification of the land, the harm done to biodiversity or the increased pollution. In a word, businesses profit by calculating and paying only a fraction of the costs involved. Yet only when "the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations",[138] can those actions be considered ethical. An instrumental way of reasoning, which provides a purely static analysis of realities in the service of present needs, is at work whether resources are allocated by the market or by state central planning. ..."
I'm an environmental scientist, not an economist, but it seems to me that Pope Francis has some
sensible things to say, as in the following from Laudato si:
IV. POLITICS AND ECONOMY IN DIALOGUE FOR HUMAN FULFILMENT
189. Politics must not be subject to the economy, nor should the economy be subject to
the dictates of an efficiency-driven paradigm of technocracy. Today, in view of the common good,
there is urgent need for politics and economics to enter into a frank dialogue in the service
of life, especially human life. Saving banks at any cost, making the public pay the price,
foregoing a firm commitment to reviewing and reforming the entire system, only reaffirms the absolute
power of a financial system, a power which has no future and will only give rise to new crises
after a slow, costly and only apparent recovery. The financial crisis of 2007-08 provided an opportunity
to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative
financial practices and virtual wealth. But the response to the crisis did not include rethinking
the outdated criteria which continue to rule the world. Production is not always rational,
and is usually tied to economic variables which assign to products a value that does not necessarily
correspond to their real worth. This frequently leads to an overproduction of some commodities,
with unnecessary impact on the environment and with negative results on regional economies.[133]
The financial bubble also tends to be a productive bubble. The problem of the real economy is
not confronted with vigour, yet it is the real economy which makes diversification and improvement
in production possible, helps companies to function well, and enables small and medium businesses
to develop and create employment.
190. Here too, it should always be kept in mind that "environmental protection cannot be assured
solely on the basis of financial calculations of costs and benefits. The environment is one of
those goods that cannot be adequately safeguarded or promoted by market forces".[134] Once more,
we need to reject a magical conception of the market, which would suggest that problems can be
solved simply by an increase in the profits of companies or individuals. Is it realistic to hope
that those who are obsessed with maximizing profits will stop to reflect on the environmental
damage which they will leave behind for future generations? Where profits alone count, there can
be no thinking about the rhythms of nature, its phases of decay and regeneration, or the complexity
of ecosystems which may be gravely upset by human intervention. Moreover, biodiversity is considered
at most a deposit of economic resources available for exploitation, with no serious thought for
the real value of things, their significance for persons and cultures, or the concerns and needs
of the poor.
191. Whenever these questions are raised, some react by accusing others of irrationally
attempting to stand in the way of progress and human development. But we need to grow in the conviction
that a decrease in the pace of production and consumption can at times give rise to another form
of progress and development. Efforts to promote a sustainable use of natural resources are
not a waste of money, but rather an investment capable of providing other economic benefits in
the medium term. If we look at the larger picture, we can see that more diversified and innovative
forms of production which impact less on the environment can prove very profitable. It is a matter
of openness to different possibilities which do not involve stifling human creativity and its
ideals of progress, but rather directing that energy along new channels.
192. For example, a path of productive development, which is more creative and better directed,
could correct the present disparity between excessive technological investment in consumption
and insufficient investment in resolving urgent problems facing the human family. It could generate
intelligent and profitable ways of reusing, revamping and recycling, and it could also improve
the energy efficiency of cities. Productive diversification offers the fullest possibilities to
human ingenuity to create and innovate, while at the same time protecting the environment and
creating more sources of employment. Such creativity would be a worthy expression of our most
noble human qualities, for we would be striving intelligently, boldly and responsibly to promote
a sustainable and equitable development within the context of a broader concept of quality of
life. On the other hand, to find ever new ways of despoiling nature, purely for the sake of new
consumer items and quick profit, would be, in human terms, less worthy and creative, and more
superficial.
193. In any event, if in some cases sustainable development were to involve new forms of growth,
then in other cases, given the insatiable and irresponsible growth produced over many decades,
we need also to think of containing growth by setting some reasonable limits and even retracing
our steps before it is too late. We know how unsustainable is the behaviour of those who constantly
consume and destroy, while others are not yet able to live in a way worthy of their human dignity.
That is why the time has come to accept decreased growth in some parts of the world, in order
to provide resources for other places to experience healthy growth. Benedict XVI has said that
"technologically advanced societies must be prepared to encourage more sober lifestyles, while
reducing their energy consumption and improving its efficiency".[135]
194. For new models of progress to arise, there is a need to change "models of global development";[136]
this will entail a responsible reflection on "the meaning of the economy and its goals with an
eye to correcting its malfunctions and misapplications".[137] It is not enough to balance, in
the medium term, the protection of nature with financial gain, or the preservation of the environment
with progress. Halfway measures simply delay the inevitable disaster. Put simply, it is a matter
of redefining our notion of progress. A technological and economic development which does not
leave in its wake a better world and an integrally higher quality of life cannot be considered
progress. Frequently, in fact, people's quality of life actually diminishes by the deterioration
of the environment, the low quality of food or the depletion of resources in the midst of economic
growth. In this context, talk of sustainable growth usually becomes a way of distracting attention
and offering excuses. It absorbs the language and values of ecology into the categories of finance
and technocracy, and the social and environmental responsibility of businesses often gets reduced
to a series of marketing and image-enhancing measures.
195. The principle of the maximization of profits, frequently isolated from other considerations,
reflects a misunderstanding of the very concept of the economy. As long as production is increased,
little concern is given to whether it is at the cost of future resources or the health of the
environment; as long as the clearing of a forest increases production, no one calculates the losses
entailed in the desertification of the land, the harm done to biodiversity or the increased pollution.
In a word, businesses profit by calculating and paying only a fraction of the costs involved.
Yet only when "the economic and social costs of using up shared environmental resources are recognized
with transparency and fully borne by those who incur them, not by other peoples or future generations",[138]
can those actions be considered ethical. An instrumental way of reasoning, which provides a purely
static analysis of realities in the service of present needs, is at work whether resources are
allocated by the market or by state central planning.
196. What happens with politics? Let us keep in mind the principle of subsidiarity, which grants
freedom to develop the capabilities present at every level of society, while also demanding a
greater sense of responsibility for the common good from those who wield greater power. Today,
it is the case that some economic sectors exercise more power than states themselves. But economics
without politics cannot be justified, since this would make it impossible to favour other ways
of handling the various aspects of the present crisis. The mindset which leaves no room for sincere
concern for the environment is the same mindset which lacks concern for the inclusion of the most
vulnerable members of society. For "the current model, with its emphasis on success and self-reliance,
does not appear to favour an investment in efforts to help the slow, the weak or the less talented
to find opportunities in life".[139]
197. What is needed is a politics which is far-sighted and capable of a new, integral and interdisciplinary
approach to handling the different aspects of the crisis. Often, politics itself is responsible
for the disrepute in which it is held, on account of corruption and the failure to enact sound
public policies. If in a given region the state does not carry out its responsibilities, some
business groups can come forward in the guise of benefactors, wield real power, and consider themselves
exempt from certain rules, to the point of tolerating different forms of organized crime, human
trafficking, the drug trade and violence, all of which become very difficult to eradicate. If
politics shows itself incapable of breaking such a perverse logic, and remains caught up in inconsequential
discussions, we will continue to avoid facing the major problems of humanity. A strategy for real
change calls for rethinking processes in their entirety, for it is not enough to include a few
superficial ecological considerations while failing to question the logic which underlies present-day
culture. A healthy politics needs to be able to take up this challenge.
198. Politics and the economy tend to blame each other when it comes to poverty and environmental
degradation. It is to be hoped that they can acknowledge their own mistakes and find forms of
interaction directed to the common good. While some are concerned only with financial gain, and
others with holding on to or increasing their power, what we are left with are conflicts or spurious
agreements where the last thing either party is concerned about is caring for the environment
and protecting those who are most vulnerable. Here too, we see how true it is that "unity is greater
than conflict".[140]
"... The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems, and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market growth. ..."
From Encyclical Letter Laudato Si' of the Holy Father Francis, On Care For Our Common Home:
The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated
and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively
approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental
method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find
itself in the presence of something formless, completely open to manipulation. Men and women have constantly intervened in nature,
but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a
matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on
things, attempting to extract everything possible from them while frequently ignoring or forgetting the reality in front of us.
Human beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational.
This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers
and experts in technology. It is based on the lie that there is an infinite supply of the earth's goods, and this leads to the
planet being squeezed dry beyond every limit. It is the false notion that "an infinite quantity of energy and resources are available,
that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily
absorbed"
"The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance
in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the
real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons
of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems,
and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market
growth.
They are less concerned with certain economic theories which today scarcely anybody dares defend, than with their actual
operation in the functioning of the economy. They may not affirm such theories with words, but nonetheless support them with their
deeds by showing no interest in more balanced levels of production, a better distribution of wealth, concern for the environment
and the rights of future generations. Their behavior shows that for them maximizing profits is enough. Yet by itself the market
cannot guarantee integral human development and social inclusion. At the same time, we have "a sort of 'superdevelopment' of a
wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation", while
we are all too slow in developing economic institutions and social initiatives which can give the poor regular access to basic
resources. We fail to see the deepest roots of our present failures, which have to do with the direction, goals, meaning and social
implications of technological and economic growth."
"... The "Obama Doctrine" a continuation of the previous false government doctrines in my lifetime, is less doctrine than the disease,
as David Swanson points out . But in the article he critiques, the neoconservative warmongering global planning freak perspective (truly,
we must recognize this view as freakish, sociopathic, death-cultish, control-obsessed, narcissist, take your pick or get a combo, it's
all good). Disease, as a way of understanding the deep state action on the body politic, is abnormal. It can and should be cured. ..."
"... The deep state seems to have grown, strengthened and tightened its grip. Can a lack of real money restrain or starve it? I
once thought so, and maybe I still do. But it doesn't use real money, but rather debt and creative financing to get that next new car,
er, war and intervention and domestic spending program. Ultimately it's not sustainable, and just as unaffordable cars are junked, stripped,
repossessed, and crunched up, so will go the way of the physical assets of the warfarewelfare state. ..."
"... Because inflated salaries , inflated stock prices and inflated ruling-class personalities are month to month, these should
evaporate more quickly, over a debris field once known as some of richest counties in the United States. Can I imagine the shabbiest
of trailer parks in the dismal swamp, where high rises and government basilicas and abbeys once stood? I'd certainly like to. But I'll
settle for well-kept, privately owned house trailers, filled with people actually producing some small value for society, and minding
their own business. ..."
"... Finally, what of those pinpricks of light, the honest assessments of the real death trail and consumption pit that the deep
state has delivered? Well, it is growing and broadening. Wikileaks and Snowden are considered assets now to any and all competitors
to the US deep state, from within and from abroad the Pandora's box, assisted by technology, can't be closed now. The independent
media has matured to the point of criticizing and debating itself/each other, as well as focusing harsh light on the establishment media.
Instead of left and right mainstream media, we increasingly recognize state media, and delightedly observe its own struggle to survive
in the face of a growing nervousness of the deep state it assists on command. ..."
"... Watch an old program like"Yes, Minister" to understand how it works. Politicians come and go, but the permanent state apparatchiks
doesn't. ..."
"... The "deep state" programs, whether conceived and directed by Soros' handlers, or others, risks unintended consequences. The
social division intended by BLM, for example could easily morph beyond the goals. The lack of law due to corruption is equally susceptible
to a spontaneous reaction of "the mob," not under the control of the Tavistock handlers. There's an old saying on Wall St; pigs get
fat, hogs get slaughtered. ..."
So, after getting up late, groggy, and feeling overworked even before I started, I read
this article . Just
after, I had to feed a dozen cats and dogs, each dog in a separate room out of respect for their territorialism and aggressive desire
to consume more than they should (hmm, where have I seen this before), and in the process, forgot where I put my coffee cup. Retracing
steps, I finally find it and sit back down to my 19-inch window on the ugly (and perhaps remote) world of the state, and the endless
pinpricks of the independent media on its vast overwhelmingly evil existence. I suspect I share this distractibility and daily estrangement
from the actions of our government with most Americans .
We are newly bombing Libya and still messing with the Middle East? I thought that the wars the deep state wanted and started were
now limited and constrained! What happened to lack of funds, lack of popular support, public transparency that revealed the stupidity
and abject failure of these wars?
Deep state. Something systemic, difficult to detect, hard to remove, hidden. It is a spirit as much as nerves and organ.
How do your starve it, excise it, or just make it go away? We want to know. I think this explains the popularity of infotainment
about haunted houses, ghosts and alien beings among us. They live and we are curious
and scared.
The "Obama Doctrine" a continuation of the previous false government doctrines in my lifetime, is less doctrine than the
disease, as David Swanson points out . But in the article he critiques, the neoconservative warmongering global planning freak
perspective (truly, we must recognize this view as freakish, sociopathic, death-cultish, control-obsessed, narcissist, take your
pick or get a combo, it's all good). Disease, as a way of understanding the deep state action on the body politic, is abnormal. It
can and should be cured.
My summary of the long Jeffrey Goldberg piece is basically that Obama has become more fatalistic (did he mean to say fatal?) since
he won that Nobel
Peace Prize back in 2009 . By the way, the "Nobel prize" article contains this gem, sure to get a chuckle:
"Obama's drone program is regularly criticized for a lack of transparency and accountability, especially considering incomplete
intelligence means officials are often unsure about who will die. "
[M]ost individuals killed are not on a kill list, and the government does not know their names," Micah Zenko, a scholar at
the Council on Foreign Relations told the New York Times."
This is about all the fun I can handle in one day. But back to what I was trying to say.
The deep state seems to have grown, strengthened and tightened its grip. Can a lack of real money restrain or starve it? I
once thought so, and maybe I still do. But it doesn't use real money, but rather debt and creative financing to get that next new
car, er, war and intervention and domestic spending program. Ultimately it's not sustainable, and just as unaffordable cars are junked,
stripped, repossessed, and crunched up, so will go the way of the physical assets of the warfarewelfare state.
Because
inflated salaries ,
inflated
stock prices and inflated ruling-class personalities
are month to month, these should evaporate more quickly, over a debris field
once known as some of richest
counties in the United States. Can I imagine the shabbiest of trailer parks in the dismal swamp, where high rises and government
basilicas and abbeys once stood? I'd certainly like to. But I'll settle for well-kept, privately owned house trailers, filled with
people actually producing some small value for society, and minding their own business.
Can a lack of public support reduce the deep state, or impact it? Well, it would seem that this is a non-factor, except for the
strange history we have had and are witnessing again today, with the odd successful popular and populist-leaning politician and their
related movements. In my lifetime, only popular figures and their movements get assassinated mysteriously, with odd polka dot dresses,
MKULTRA suggestions, threats against their family by their competitors (I'm thinking Perot, but one mustn't be limited to that case),
and always with concordant pressures on the sociopolitical seams in the country, i.e riots and police/military activations. The
bad dealings toward, and genuine fear
of, Bernie Sanders within the Democratic Party's wing of the deep state is matched or exceeded only by the genuine terror of
Trump among the Republican deep state wing. This reaction to something or some person that so many in the country find engaging and
appealing - an outsider who speaks to the growing political and economic dissatisfaction of a poorer, more indebted, and
more regulated population is
heart-warming, to be sure. It is a sign that whether or not we do, the deep state thinks things might change. Thank you, Bernie and
especially Donald, for revealing this much! And the "republicanization" of the Libertarian Party is also a bright indicator blinking
out the potential of deep state movement and compromise in the pursuit of "stability."
Finally, what of those pinpricks of light, the honest assessments of the real death trail and consumption pit that the deep
state has delivered? Well, it is growing and broadening. Wikileaks and Snowden are considered assets now to any and all competitors
to the US deep state, from within and from abroad the Pandora's box, assisted by technology, can't be closed now. The independent
media has matured to the point of criticizing and debating itself/each other, as well as focusing harsh light on the establishment
media. Instead of left and right mainstream media, we increasingly recognize state media, and delightedly observe its own struggle
to survive in the face of a growing nervousness of the deep state it assists on command.
Maybe we will one day soon be able to debate how deep the deep state really is, or whether it was all just a dressed up, meth'ed
up, and eff'ed up a sector of society that deserves a bit of jail time, some counseling, and a new start . Maybe some job training
that goes beyond the printing of license plates. But given the destruction and mass murder committed daily in the name of this state,
and the environmental disasters it has created around the world for the future generations, perhaps we will be no more merciful to
these proprietors of the American empire as they have been to their victims. The ruling class deeply fears our judgment, and in this
dynamic lies the cure.
LIST OF DEMANDS TO PROTECT THE PEOPLE OF THE UNITED STATES OF AMERICA FROM FINANCIAL CATASTROPHE
I.CURB CORRUPTION AND EXCESSIVE POWER IN THE FINANCIAL ARMS OF THE US GOVERNMENT
A. FEDERAL RESERVE
1. Benjaman Bernanke to be removed as Chairman immediately
2. New York Federal Reserve Bank and all New York City offices of the Federal Reserve system will be closed for at least 3
years
3. Salaries will be reduced and capped at $150,000/year, adjusted for official inflation
4. Staffing count to be reduced to 1980 levels
5. Interest rate manipulation to be prohibited for at least five years
6. Balance sheet manipulation to be prohibited for at least five years
7. Financial asset purchases prohibited for at least five years
B. TREASURY DEPARTMENT
1. Timothy Geithner to be removed as Secretary immediately
2. All New York City offices of the Department will be closed for at least 3 years
3. Salaries will be reduced and capped at $150,000/year, adjusted for official inflation
4. Staffing count to be reduced to 1980 levels
5. Market manipulation/intervention to be prohibited for at least five years
7. Financial asset purchases prohibited for at least five years
II. END THE CORRUPTING INFLUENCE OF GIANT BANKS AND PROTECT AMERICANS FROM FURTHER EXPOSURE TO THEIR COLLAPSE
A. END CORRUPT INFLUENCE
1. Lifetime ban on government employment for TARP recipient employees and corporate officers, specifically including Goldman
Sachs and JP Morgan Chase
2. Ten year ban on government work for consulting firms, law firms, and individual consultants and lawyers who have accepted
cash from these entities
3. All contacts by any method with federal agencies and employees prohibited for at least five years, with civil and criminal
penalties for violation
B. PROTECT THE AMERICAN PEOPLE FROM FURTHER HARM AT THE HANDS OF GIANT BANKS
1. No financial institution with assets of more than $10billion will receive federal assistance or any 'arm's-length' bailouts
2. TARP recipients are prohibited from purchasing other TARP recipient corporate units, or merging with other TARP recipients
3. No foreign interest shall be allowed to acquire any portion of TARP recipients in the US or abroad
III. PREVENT CORPORATE ACCOUNTING AND PENSION FUND ABUSES RELATED TO THE GLOBAL FINANCIAL CRISIS
A. CORPORATE ACCOUNTING
1. Immediately implement mark-to-market accounting rules which were improperly suspended, allowing six months for implementation.
2. Companies must reserve against impaired assets under mark-to-market rules
3. Any health or life insurance company with more than$100 million in assets must report on their holdings and risk factors,
specifically including exposure to real estate, mortgage-backed securities, derivatives, and other exotic financial instruments.
These reports will be to state insurance commissions and the federal government, and will also be made available to the public
on the Internet.
B. PENSION FUNDS
1. All private and public pension funds must disclose their funding status and establish a plan to fully fund accounts under
the assumption that net real returns across all asset classes remain at zero for at least ten years.
Sir Humphrey Appleby: You know what happens when politicians get into Number 10; they want to take their place on the
world stage.
Sir Richard Wharton: People on stages are called actors. All they are required to do is look plausible, stay sober,
and say the lines they're given in the right order.
Sir Humphrey Appleby: Some of them try to make up their own lines.
The "deep state" programs, whether conceived and directed by Soros' handlers, or others, risks unintended consequences.
The social division intended by BLM, for example could easily morph beyond the goals. The lack of law due to corruption is equally
susceptible to a spontaneous reaction of "the mob," not under the control of the Tavistock handlers. There's an old saying on
Wall St; pigs get fat, hogs get slaughtered.
The failed coup in Turkey is a significant indication of institutional weakness and also vulnerability. The inability to exercise
force of will in Syria is another. The list of failures is getting too long.
An interesting article on John McCain. I disagree with the contention that McCain hid knowledge that many American POWs were left
behind (undoubtedly some voluntarily choose to remain behind but not hundreds ). However, the article touched on some ideas that
rang true:
Today when we consider the major countries of the world we see that in many cases the official leaders are also the leaders
in actuality: Vladimir Putin calls the shots in Russia, Xi Jinping and his top Politburo colleagues do the same in China, and
so forth. However, in America and in some other Western countries, this seems to be less and less the case, with top national
figures merely being attractive front-men selected for their popular appeal and their political malleability, a development that
may eventually have dire consequences for the nations they lead. As an extreme example, a drunken Boris Yeltsin freely allowed
the looting of Russia's entire national wealth by the handful of oligarchs who pulled his strings, and the result was the total
impoverishment of the Russian people and a demographic collapse almost unprecedented in modern peacetime history.
An obvious problem with installing puppet rulers is the risk that they will attempt to cut their strings, much like Putin
soon outmaneuvered and exiled his oligarch patron Boris Berezovsky.
One means of minimizing such risk is to select puppets who
are so deeply compromised that they can never break free, knowing that the political self-destruct charges buried deep within
their pasts could easily be triggered if they sought independence. I have sometimes joked with my friends that perhaps the best
career move for an ambitious young politician would be to secretly commit some monstrous crime and then make sure that the hard
evidence of his guilt ended up in the hands of certain powerful people, thereby assuring his rapid political rise.
The gist is that elite need a kill switch on their front men (and women).
Seems to be a series of pieces dealing with Vietnam POWs: the following linked item was interesting and provided a plausible explanation:
that the US failed to pay up agreed on reparations
Remarkable and shocking. Wheels within wheels this is the first time I have ever seen McCain's father connected with the infamous
Board of Inquiry which cleared Israel in that state's attack on USS LIBERTY during Israel's seizure of the Golan Heights.
Another stunning article in which the author makes reference to his recent acquisition of what he considers to be a reliably authentic
audio file of POW McCain's broadcasts from captivity. Dynamite stuff. The conclusion regarding aspiring untenured historians is
quite downbeat:
Also remarkable; fantastic. It's hard to believe, and a testament to the boldness of Washington dog-and-pony shows, because this
must have been well-known in insider circles in Washington anything so damning which was not ruthlessly and professionally suppressed
and simply never allowed to become part of a national discussion would surely have been stumbled upon before now. Land of the
Cover-Up.
So when you cut through all the steam and the boilerplate, how do they plan to do it so it's
fairer to poor Ukrainians, but the state spends less?
Ah. They plan to
raise the age at which you
qualify for a pension
, doubtless among other money-savers. If the state plays its cards
right, the target demographic wil work all its adult life and then die before reaching
pensionable age. But as usual, we must be subjected to the usual western sermonizing about
how the whole initiative is all about helping people and doing good.
This is borne out in one of the other 'critical reforms' the IMF insisted upon before
releasing its next tranche of 'aid' – a land reform act which would allow Ukraine to
sell off its agricultural land
in the interests of 'creating a market'. Sure: as if.
Land-hungry western agricultural giants like Monsanto are drooling at the thought of
getting their hands on Ukraine's rich black earth
plus a chink in Europe's armor against
GMO crops. Another possible weapon to use against Russia would be the growing of huge volumes
of GMO grain so as to weaken the market for Russian grains.
Another element of the plan to reduce pension obligations is the dismantling of whatever
health care system that remain in the Ukraine. That is a twofer – save money on
providing medical services and shortening the life span. This would be another optimization
of wealth generation for the oligarchs and for those holding Ukraine debt.
I can just see Ukrainian health authorities giving away free cigarettes to patients and their
families next!
That remark was partly facetious and partly serious: life these days in the Ukraine sounds
so surreal that I wouldn't put it past the Ministry of Healthcare of Ukraine to come up with
the most hare-brained "reform" initiatives.
I recall a news story about the adverse effects of a reduction in smoking on the US Social
Security Trust Fund. Those actuaries make those calculations for a living. The trouble with
shortening life spans via cancer is that end-of-life treatment tends to be very expensive
unless
people do not have or have very basic health insurance, then there is a likely
net gain. Alcohol, murder and suicides are generally much more efficient economically. I just
depressed myself.
Something does not add up. Any government expenditure is an economic stimulus. The only
potentially negative aspect is taxation. Since taxation is not excessive and in fact too
small on key layers (e.g. companies and the rich), there is no negative aspect to government
spending on pensions. So we have here narrow-definition accounting BS.
Agree that in a world where the people, represented by their governments, are in charge of
money creation and governments ran their financial systems independently of Wall Street and
Washington, any government spending would be welcomed as stimulating economic production and
development. The money later recirculates back to the government when the people who have
jobs created by government spending pay the money back through purchases of various other
government goods and services or through their taxes.
But in capitalist societies where increasingly banks are becoming the sole creators and
suppliers of money, government spending incurs debts that have to be paid back with interest.
In the past governments also raised money for major public projects by issuing treasury bonds
and securities but that doesn't seem to happen much these days.
Unfortunately also Ukraine is surviving mainly on IMF loans and the IMF certainly doesn't
want the money to go towards social welfare spending.
In fact, the IMF specifically intervenes to prevent spending loan money on social welfare, as
a condition of extending the loan. That might have been true since time out of mind for all I
know, but it certainly was true after the first Greek bailout, when leaders blew the whole
wad on pensions and social spending so as to ensure their re-election. They then went
sheepishly back to the IMF for a second bailout. So there are good and substantial reasons
for insisting the loan money not be wasted in this fashion, as that kind of spending
customarily does not generate any meaningful follow-on spending by the recipients, and is
usually absorbed by the cost of living.
But as we are all aware, such IMF interventions have a definite political agenda as well.
In Ukraine's case, the IMF with all its political inveigling is matched against a crafty
oligarch who will lift the whole lot if he is not watched. Alternatively, he might well blow
it all on social spending to ensure his re-election, thus presenting the IMF with a dilemma
in which it must either continue to support him, or cause him to fall.
"... So, if the period when he was a good econometrician exists it is limited to pre-war and war years. As he was born in 1912, he was just 33 in 1945. His "A Theory of the Consumption Function" was published in 1957. And "A Monetary History of the United States, 18671960" in 1963, when he was already completely crooked. ..."
"... Mont Pelerin Society was founded in 1947 with the explicit political goal of being hatching place for neoliberal ideology as alternative to communist ideology. He served as a President of this Society from 1970 to 1972. ..."
"... So what Krugnam is saying is a myth. And he is not an impartial observer. He is a neoliberal himself. I still remember Krugman despicable attacks on John Kenneth Galbraith and his unhealthy fascination with the usage of differential equations in economic modeling, the epitome of mathiness. ..."
Ironic isn't it? "Why didn't ... exhibit the same restraint in his role as a public intellectual?
The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could
and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not
give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm
of his early career hardened into a rigid defense of what had become the new orthodoxy."
Krugman should have stuck to economics...
likbez -> JohnH...
Yes, this is pretty nasty verdict for Krugman too.
But, in reality, Milton Friedman was an intellectual prostitute of financial oligarchy most of his long life, starting from
his days in Mont Pelerin Society ( https://en.wikipedia.org/wiki/Mont_Pelerin_Society)
, where he was one of the founders.
So, if the period when he was a good econometrician exists it is limited to pre-war and war years. As he was born in 1912,
he was just 33 in 1945. His "A Theory of the Consumption Function" was published in 1957. And "A Monetary History of the United
States, 18671960" in 1963, when he was already completely crooked.
Mont Pelerin Society was founded in 1947 with the explicit political goal of being hatching place for neoliberal ideology
as alternative to communist ideology. He served as a President of this Society from 1970 to 1972.
Capitalism and Freedom that many consider to be neoliberal manifesto similar to Marx and Engels "Manifesto of the Communist
Party" was published in 1962.
So what Krugnam is saying is a myth. And he is not an impartial observer. He is a neoliberal himself. I still remember
Krugman despicable attacks on John Kenneth Galbraith and his unhealthy fascination with the usage of differential equations in
economic modeling, the epitome of mathiness.
This was written in 2011 but it summarizes Obama presidency pretty nicely, even today. Betrayer
in chief, the master of bait and switch. That is the essence of Obama legacy. On "Great Democratic betrayal"...
Obama always was a closet neoliberal and neocon. A stooge of neoliberal financial oligarchy, a puppet,
if you want politically incorrect term. He just masked it well during hist first election campaigning
as a progressive democrat... And he faced Romney in his second campaign, who was even worse, so after
betraying American people once, he was reelected and did it twice. Much like Bush II. He like
another former cocaine addict -- George W Bush has never any intention of helping American people, only
oligarchy.
Notable quotes:
"... IN contrast, when faced with the greatest economic crisis, the greatest levels of economic inequality, and the greatest levels of corporate influence on politics since the Depression, Barack Obama stared into the eyes of history and chose to avert his gaze. ..."
"... We (yes, we) recognise that capitalism is the most efficient way to maximise overall prosperity and quality of life. But we also recognise that unfettered, it will ravage the environment, abuse labor, and expand income disparity until violence or tragedy (or both) ensues. ..."
"... These are the lessons we've learned since the industrial revolution, and they're the ones that we should be drawing from the past decade. We recognise that we need a strong federal government to check these tendencies, and to strike a stable, sustainable balance between prosperity, community, opportunity, wealth, justice, freedom. We need a voice to fill the moral vacuum that has allowed the Koch/Tea/Fox Party to emerge and grab power. ..."
"... Americans know this---including, of course, President Obama (see his April 13 speech at GW University). But as this article by Dr. Westen so effectively shows, Obama is incompetent to lead us back ..."
"... he is not competent to lead us back to a state of American morality, where government is the protector of those who work hard, and the provider of opportunity to all Americans. ..."
"... I've heard him called a mediator, a conciliator, a compromiser, etc. Those terms indicate someone who is bringing divergent views together and moving us along. That's part of what a leader does, though not all. Yet I don't think he's even lived up to his reputation as a mediator. ..."
"... Almost three years after I voted for Obama, I still don't know what he's doing other than trying to help the financial industry: the wealthy who benefit most from it and the technocrats who run it for them. But average working people, people like myself and my daughter and my grandson, have not been helped. We are worse off than before. And millions of unemployed and underemployed are even worse off than my family is. ..."
"... So whatever else he is (and that still remains a mystery to me), President Obama is not the leader I thought I was voting for. ..."
"... I knew that Obama was a charade early on when giving a speech about the banking failures to the nation, instead of giving the narrative Mr. Westen accurately recommended on the origins of the orgy of greed that just crippled our economy and caused suffering for millions of Americans ..."
"... He should have been condemning the craven, wanton, greed of nihilistic financial gangsters who hijacked our economy. Instead he seemed to be calling for all Americans not to hate rich people. That was not the point. Americans don't hate rich people, but they should hate rich people who acquire their wealth at the expense of the well being of an entire nation through irresponsible, avaricious, and in some instances illegal practices, and legally bribe politicians to enact laws which allow them to run amok over our economy without supervision or regulation. ..."
"... I knew then that Obama was either a political lemon, in over his head, an extremely conflict averse neurotic individual with a compulsive need for some delusional ideal of neutrality in political and social relations, or a political phony beholden to the same forces that almost destroyed the country as Republicans are. ..."
When Barack Obama rose to the lectern on Inauguration Day, the nation was in tatters. Americans
were scared and angry. The economy was spinning in reverse. Three-quarters of a million people lost
their jobs that month. Many had lost their homes, and with them the only nest eggs they had. Even
the usually impervious upper middle class had seen a decade of stagnant or declining investment,
with the stock market dropping in value with no end in sight. Hope was as scarce as credit.
In that context, Americans needed their president to tell them a story that made sense of what
they had just been through, what caused it, and how it was going to end. They needed to hear that
he understood what they were feeling, that he would track down those responsible for their pain and
suffering, and that he would restore order and safety. What they were waiting for, in broad strokes,
was a story something like this:
"I know you're scared and angry. Many of you have lost your jobs, your homes, your hope. This
was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated
with your lives and futures. It was made by conservative extremists who told us that if we just eliminated
regulations and rewarded greed and recklessness, it would all work out. But it didn't work out. And
it didn't work out 80 years ago, when the same people sold our grandparents the same bill of goods,
with the same results. But we learned something from our grandparents about how to fix it, and we
will draw on their wisdom. We will restore business confidence the old-fashioned way: by putting
money back in the pockets of working Americans by putting them back to work, and by restoring integrity
to our financial markets and demanding it of those who want to run them. I can't promise that we
won't make mistakes along the way. But I can promise you that they will be honest mistakes, and that
your government has your back again." A story isn't a policy. But that simple narrative - and the
policies that would naturally have flowed from it - would have inoculated against much of what was
to come in the intervening two and a half years of failed government, idled factories and idled hands.
That story would have made clear that the president understood that the American people had given
Democrats the presidency and majorities in both houses of Congress to fix the mess the Republicans
and Wall Street had made of the country, and that this would not be a power-sharing arrangement.
It would have made clear that the problem wasn't tax-and-spend liberalism or the deficit - a deficit
that didn't exist until George W. Bush gave nearly $2 trillion in tax breaks largely to the wealthiest
Americans and squandered $1 trillion in two wars.
And perhaps most important, it would have offered a clear, compelling alternative to the dominant
narrative of the right, that our problem is not due to spending on things like the pensions of firefighters,
but to the fact that those who can afford to buy influence are rewriting the rules so they can cut
themselves progressively larger slices of the American pie while paying less of their fair share
for it.
But there was no story - and there has been none since.
In similar circumstances, Franklin D. Roosevelt offered Americans a promise to use the power of
his office to make their lives better and to keep trying until he got it right. Beginning in his
first inaugural address, and in the fireside chats that followed, he explained how the crash had
happened, and he minced no words about those who had caused it. He promised to do something no president
had done before: to use the resources of the United States to put Americans directly to work, building
the infrastructure we still rely on today. He swore to keep the people who had caused the crisis
out of the halls of power, and he made good on that promise. In a 1936 speech at Madison Square Garden,
he thundered, "Never before in all our history have these forces been so united against one candidate
as they stand today. They are unanimous in their hate for me - and I welcome their hatred."
When Barack Obama stepped into the Oval Office, he stepped into a cycle of American history, best
exemplified by F.D.R. and his distant cousin, Teddy. After a great technological revolution or a
major economic transition, as when America changed from a nation of farmers to an urban industrial
one, there is often a period of great concentration of wealth, and with it, a concentration of power
in the wealthy. That's what we saw in 1928, and that's what we see today. At some point that power
is exercised so injudiciously, and the lives of so many become so unbearable, that a period of reform
ensues - and a charismatic reformer emerges to lead that renewal. In that sense, Teddy Roosevelt
started the cycle of reform his cousin picked up 30 years later, as he began efforts to bust the
trusts and regulate the railroads, exercise federal power over the banks and the nation's food supply,
and protect America's land and wildlife, creating the modern environmental movement.
Those were the shoes - that was the historic role - that Americans elected Barack Obama to fill.
The president is fond of referring to "the arc of history," paraphrasing the Rev. Dr. Martin Luther
King Jr.'s famous statement that "the arc of the moral universe is long, but it bends toward justice."
But with his deep-seated aversion to conflict and his profound failure to understand bully dynamics
- in which conciliation is always the wrong course of action, because bullies perceive it as weakness
and just punch harder the next time - he has broken that arc and has likely bent it backward for
at least a generation.
When Dr. King spoke of the great arc bending toward justice, he did not mean that we should wait
for it to bend. He exhorted others to put their full weight behind it, and he gave his life speaking
with a voice that cut through the blistering force of water cannons and the gnashing teeth of police
dogs. He preached the gospel of nonviolence, but he knew that whether a bully hid behind a club or
a poll tax, the only effective response was to face the bully down, and to make the bully show his
true and repugnant face in public.
IN contrast, when faced with the greatest economic crisis, the greatest levels of economic
inequality, and the greatest levels of corporate influence on politics since the Depression, Barack
Obama stared into the eyes of history and chose to avert his gaze. Instead of indicting the
people whose recklessness wrecked the economy, he put them in charge of it. He never explained that
decision to the public - a failure in storytelling as extraordinary as the failure in judgment behind
it. Had the president chosen to bend the arc of history, he would have told the public the story
of the destruction wrought by the dismantling of the New Deal regulations that had protected them
for more than half a century. He would have offered them a counternarrative of how to fix the problem
other than the politics of appeasement, one that emphasized creating economic demand and consumer
confidence by putting consumers back to work. He would have had to stare down those who had wrecked
the economy, and he would have had to tolerate their hatred if not welcome it. But the arc of his
temperament just didn't bend that far.
Michael August 7, 2011
Eloquently expressed and horrifically accurate, this excellent analysis articulates the frustration
that so many of us have felt watching Mr...
Bill Levine August 7, 2011
Very well put. I know that I have been going through Kόbler-Ross's stages of grief ever since
the foxes (a.k.a. Geithner and Summers) were...
AnAverageAmerican August 7, 2011
"In that context, Americans needed their president to tell them a story that made sense of
what they had just been through, what caused it,...
Unfortunately, the Democratic Congress of 2008-2010, did not have the will to make the economic
and social program decisions that would have improved the economic situation for the middle-class;
and it is becoming more obvious that President Obama does not have the temperament to publicly
push for programs and policies that he wants the congress to enact.
The American people have a problem: we reelect Obama and hope for the best; or we elect a Republican
and expect the worst. There is no question that the Health Care law that was just passed would
be reversed; Medicare and Medicare would be gutted; and who knows what would happen to Social
Security. You can be sure, though, that business taxes and regulation reforms would not be in
the cards and those regulations that have been enacted would be reversed. We have traveled this
road before and we should be wise enough not to travel it again!
Brilliant analysis - and I suspect that a very large number of those who voted for President
Obama will recognize in this the thoughts that they have been trying to ignore, or have been trying
not to say out loud. Later historians can complete this analysis and attempt to explain exactly
why Mr. Obama has turned out the way he has - but right now, it may be time to ask a more relevant
and urgent question.
If it is not too late, will a challenger emerge in time before the 2012 elections, or will
we be doomed to hold our noses and endure another four years of this?
Very eloquent and exactly to the point. Like many others, I was enthralled by the rhetoric
of his story, making the leap of faith (or hope) that because he could tell his story so well,
he could tell, as you put it, "the story the American people were waiting to hear."
Disappointment has darkened into disillusion, disillusion into a species of despair. Will I
vote for Barack Obama again? What are the options?
This is the most brilliant and tragic story I have read in a long time---in fact, precisely
since I read when Ill Fares the Land by Tony Judt. When will a leader emerge with a true moral
vision for the federal government and for our country? Someone who sees government as a balance
to capitalism, and a means to achieve the social and economic justice that we (yes, we) believe
in? Will that leadership arrive before parts of America come to look like the dystopia of Johannesburg?
We (yes, we) recognise that capitalism is the most efficient way to maximise overall prosperity
and quality of life. But we also recognise that unfettered, it will ravage the environment, abuse
labor, and expand income disparity until violence or tragedy (or both) ensues.
These are the lessons we've learned since the industrial revolution, and they're the ones
that we should be drawing from the past decade. We recognise that we need a strong federal government
to check these tendencies, and to strike a stable, sustainable balance between prosperity, community,
opportunity, wealth, justice, freedom. We need a voice to fill the moral vacuum that has allowed
the Koch/Tea/Fox Party to emerge and grab power.
Americans know this---including, of course, President Obama (see his April 13 speech at
GW University). But as this article by Dr. Westen so effectively shows, Obama is incompetent to
lead us back to America's traditional position on the global economic/political spectrum.
He's brilliant and eloquent. He's achieved personal success that is inspirational. He's done some
good things as president. But he is not competent to lead us back to a state of American morality,
where government is the protector of those who work hard, and the provider of opportunity to all
Americans.
Taxes, subsidies, entitlements, laws... these are the tools we have available to achieve our
national moral vision. But the vision has been muddled (hijacked?) and that is our biggest problem.
-->
I voted for Obama. I thought then, and still think, he's a decent person, a smart person, a
person who wants to do the best he can for others. When I voted for him, I was thinking he's a
centrist who will find a way to unite our increasingly polarized and ugly politics in the USA.
Or if not unite us, at least forge a way to get some important things done despite the ugly polarization.
And I must confess, I have been disappointed. Deeply so. He has not united us. He has not forged
a way to accomplish what needs to be done. He has not been a leader.
I've heard him called a mediator, a conciliator, a compromiser, etc. Those terms indicate
someone who is bringing divergent views together and moving us along. That's part of what a leader
does, though not all. Yet I don't think he's even lived up to his reputation as a mediator.
Almost three years after I voted for Obama, I still don't know what he's doing other than
trying to help the financial industry: the wealthy who benefit most from it and the technocrats
who run it for them. But average working people, people like myself and my daughter and my grandson,
have not been helped. We are worse off than before. And millions of unemployed and underemployed
are even worse off than my family is.
So whatever else he is (and that still remains a mystery to me), President Obama is not
the leader I thought I was voting for. Which leaves me feeling confused and close to apathetic
about what to do as a voter in 2012. More of the same isn't worth voting for. Yet I don't see
anyone out there who offers the possibility of doing better.
This was an extraordinarily well written, eloquent and comprehensive indictment of the failure
of the Obama presidency.
If a credible primary challenger to Obama ever could arise, the positions and analysis in this
column would be all he or she would need to justify the Democratic party's need to seek new leadership.
I knew that Obama was a charade early on when giving a speech about the banking failures
to the nation, instead of giving the narrative Mr. Westen accurately recommended on the origins
of the orgy of greed that just crippled our economy and caused suffering for millions of Americans,
he said "we don't disparage wealth in America." I was dumbfounded.
He should have been condemning the craven, wanton, greed of nihilistic financial gangsters
who hijacked our economy. Instead he seemed to be calling for all Americans not to hate rich people.
That was not the point. Americans don't hate rich people, but they should hate rich people who
acquire their wealth at the expense of the well being of an entire nation through irresponsible,
avaricious, and in some instances illegal practices, and legally bribe politicians to enact laws
which allow them to run amok over our economy without supervision or regulation.
I knew then that Obama was either a political lemon, in over his head, an extremely conflict
averse neurotic individual with a compulsive need for some delusional ideal of neutrality in political
and social relations, or a political phony beholden to the same forces that almost destroyed the
country as Republicans are.
Ironic isn't it? "Why didn't ... exhibit the same restraint in his role as a public intellectual?
The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could
and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not
give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm
of his early career hardened into a rigid defense of what had become the new orthodoxy."
Krugman should have stuck to economics...
likbez -> JohnH...
Yes, this is pretty nasty verdict for Krugman too.
But, in reality, Milton Friedman was an intellectual prostitute of financial oligarchy most of his long life, starting from
his days in Mont Pelerin Society ( https://en.wikipedia.org/wiki/Mont_Pelerin_Society)
, where he was one of the founders.
So, if the period when he was a good econometrician exists it is limited to pre-war and war years. As he was born in 1912,
he was just 33 in 1945. His "A Theory of the Consumption Function" was published in 1957. And "A Monetary History of the United
States, 18671960" in 1963, when he was already completely crooked.
Mont Pelerin Society was founded in 1947 with the explicit political goal of being hatching place for neoliberal ideology
as alternative to communist ideology. He served as a President of this Society from 1970 to 1972.
Capitalism and Freedom that many consider to be neoliberal manifesto similar to Marx and Engels "Manifesto of the Communist
Party" was published in 1962.
So what Krugnam is saying is a myth. And he is not an impartial observer. He is a neoliberal himself. I still remember
Krugman despicable attacks on John Kenneth Galbraith and his unhealthy fascination with the usage of differential equations in
economic modeling, the epitome of mathiness.
"... My criticism of Krugman is far more fundamental. I do not believe the profit motive is superior to the mutual benefit motive
when it comes to organizing economies. ..."
1. His refusal to acknowledge the central role of consumption in our economy. As Keynes said, ""Consumption - to repeat
the obvious - is the sole end and object of all economic activity." The General Theory, p. 104.
And Adam Smith agreed: "Consumption is the sole end and purpose of all production." The Wealth of Nations, Book IV Chapter
VIII, v. ii, p. 660, para. 49.
2. Krugman's refusal to endorse fiscal stimulus unless the economy is at ZLB. That is not only anti-Keynesian, it plays
directly into the hands of the debt fear mongers. (Krugman is also worried about the debt.)
"Krugman's refusal to endorse fiscal stimulus unless the economy is at ZLB."
That is a strawman, and a bad one.
PS: My criticism of Krugman is far more fundamental. I do not believe the profit motive is superior to the mutual benefit
motive when it comes to organizing economies.
An Inquiry into the Nature and Causes of The Wealth of Nations
By Adam Smith
On Systems of Political Economy
Conclusion of the Mercantile System
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so
far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self evident that it would be absurd
to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the
producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.
The General Theory of Employment, Interest and Money
By John Maynard Keynes
The Propensity to Consume: The Objective Factors
Consumption - to repeat the obvious - is the sole end and object of all economic activity. Opportunities for employment are
necessarily limited by the extent of aggregate demand. Aggregate demand can be derived only from present consumption or from present
provision for future consumption. The consumption for which we can profitably provide in advance cannot be pushed indefinitely
into the future. We cannot, as a community, provide for future consumption by financial expedients but only by current physical
output. In so far as our social and business organisation separates financial provision for the future from physical provision
for the future so that efforts to secure the former do not necessarily carry the latter with them, financial prudence will be
liable to diminish aggregate demand and thus impair well-being, as there are many examples to testify. The greater, moreover,
the consumption for which we have provided in advance, the more difficult it is to find something further to provide for in advance,
and the greater our dependence on present consumption as a source of demand. Yet the larger our incomes, the greater, unfortunately,
is the margin between our incomes and our consumption. So, failing some novel expedient, there is, as we shall see, no answer
to the riddle, except that there must be sufficient unemployment to keep us so poor that our consumption falls short of our income
by no more than the equivalent of the physical provision for future consumption which it pays to produce to-day.
anne -> Paul Mathis... , -1
Krugman's refusal to endorse fiscal stimulus unless the economy is at zero lower bound. That is not only anti-Keynesian, it plays
directly into the hands of the debt fear mongers. (Krugman is also worried about the debt.)
[ Only correct to a degree, economic weakness is recognized. ]
"What's odd about Friedman's absolutism on the virtues of markets and the vices of government is that in his work as an economist's
economist he was actually a model of restraint. As I pointed out earlier, he made great contributions to economic theory by emphasizing
the role of individual rationality-but unlike some of his colleagues, he knew where to stop. Why didn't he exhibit the same restraint
in his role as a public intellectual?
The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could
and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not
give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm
of his early career hardened into a rigid defense of what had become the new orthodoxy.
In the long run, great men are remembered for their strengths, not their weaknesses, and Milton Friedman was a very great man
indeed-a man of intellectual courage who was one of the most important economic thinkers of all time, and possibly the most brilliant
communicator of economic ideas to the general public that ever lived. But there's a good case for arguing that Friedmanism, in
the end, went too far, both as a doctrine and in its practical applications. When Friedman was beginning his career as a public
intellectual, the times were ripe for a counterreformation against Keynesianism and all that went with it. But what the world
needs now, I'd argue, is a counter-counterreformation."
In an interview with Public Broadcasting System on Oct. 1, 2000, Dr. Milton Friedman said, "Let me emphasize [that] I think
Keynes was a great economist. I think his particular theory in The General Theory of Employment, Interest, and Money is a fascinating
theory. It's a right kind of a theory. It's one which says a lot by using only a little. So it's a theory that has great potentiality."
Brilliant economist? Not exactly. For monetarists who believe as Dr. Friedman did that "inflation is always and everywhere
a monetary phenomenon," the nearly $4 trillion added to the money supply by the Fed since 2008 should have produced raging hyper-inflation.
For Friedman, the answer was not debatable: "A steady rate of monetary growth at a moderate level can provide a framework under
which a country can have little inflation and much growth." The Counter-Revolution in Monetary Theory (1970).
this graph, which should have been labelled but was not, depicts the monetary base from October 2012 to December 2015 for reasons
that are a mystery to me.
So Friedman has vanished from the policy scene - so much so that I suspect that a few decades from now, historians of economic
thought will regard him as little more than an extended footnote.
Who Was Milton Friedman?
By Paul Krugman - New York Review of Books
1.
The history of economic thought in the twentieth century is a bit like the history of Christianity in the sixteenth century.
Until John Maynard Keynes published The General Theory of Employment, Interest, and Money in 1936, economics-at least in the English-speaking
world-was completely dominated by free-market orthodoxy. Heresies would occasionally pop up, but they were always suppressed.
Classical economics, wrote Keynes in 1936, "conquered England as completely as the Holy Inquisition conquered Spain." And classical
economics said that the answer to almost all problems was to let the forces of supply and demand do their job.
But classical economics offered neither explanations nor solutions for the Great Depression. By the middle of the 1930s, the
challenges to orthodoxy could no longer be contained. Keynes played the role of Martin Luther, providing the intellectual rigor
needed to make heresy respectable. Although Keynes was by no means a leftist-he came to save capitalism, not to bury it-his theory
said that free markets could not be counted on to provide full employment, creating a new rationale for large-scale government
intervention in the economy.
Keynesianism was a great reformation of economic thought. It was followed, inevitably, by a counter-reformation. A number of
economists played important roles in the great revival of classical economics between 1950 and 2000, but none was as influential
as Milton Friedman. If Keynes was Luther, Friedman was Ignatius of Loyola, founder of the Jesuits. And like the Jesuits, Friedman's
followers have acted as a sort of disciplined army of the faithful, spearheading a broad, but incomplete, rollback of Keynesian
heresy. By the century's end, classical economics had regained much though by no means all of its former dominion, and Friedman
deserves much of the credit.
I don't want to push the religious analogy too far. Economic theory at least aspires to be science, not theology; it is concerned
with earth, not heaven. Keynesian theory initially prevailed because it did a far better job than classical orthodoxy of making
sense of the world around us, and Friedman's critique of Keynes became so influential largely because he correctly identified
Keynesianism's weak points. And just to be clear: although this essay argues that Friedman was wrong on some issues, and sometimes
seemed less than honest with his readers, I regard him as a great economist and a great man....
It's one of Ben Bernanke's most memorable quotes: at a conference honoring Milton Friedman on his 90th birthday, he said: *
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say
to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do
it again."
He was referring to the Friedman-Schwartz argument that the Fed could have prevented the Great Depression if only it has been
more aggressive in countering the fall in the money supply. This argument later mutated into the claim that the Fed caused the
Depression, but its original version still packed a strong punch. Basically, it implied that no fundamental reforms of the economy
were necessary; all it takes to avoid depressions is for central banks to do their job.
But can we say that recent events appear to disprove that claim? (So did Japan's experience in the 1990s, but that lesson failed
to sink in.) What we have now is a Fed that is determined not to "do it again." It has been very aggressive about monetary expansion.
Here's one measure of that aggressiveness, banks' excess reserves:
[Bank excess reserves, 1990-2009]
And yet the world economy is still falling off a cliff.
Preventing depressions, it turns out, is a lot harder than we were taught.
"... Therefore, the neoliberal project, considered under the aspect of justice, was destined to implode, and known to be so destined from the very beginning, since ultimately for popular acceptance it depends on redistribution, but "winners seldom, if ever, compensate the losers." So why throw good money after bad? ..."
"... Second, neoliberalism puts markets first . Always. So there's no reason to think that losers will ever be compensated, because there's no market in doing that. In any case, how do you put a price on a destroyed Main Street or a child dead from opiates? ..."
"... The neoliberal project has finally failed. It cannot secure a popular mandate, and by its nature cannot ever secure one. Therefore, anyone dedicated to an open society should not fund it. One might argue that alternatives to that project should be funded, but I think (see above) that only small-d democratic projects can create such alternatives, and they should be self-funded. ..."
"... Everything Lambert states he is correct, but as much as Soros's money is amplified by and mirrors NED and USAID money, it might be his job to invest in Democrat, Neoliberal, and Regime Change projects. He seems to function as a front/shell company like Chaz T. MAIN (Confessions of an Economic Hitman, John Perkins) or Business International Corp. ( http://johnpilger.com/articles/power-illusion-and-americas-last-taboo ) ..."
"... Soros and the State Department (or the dominant faction thereof) have roughly the same prescription for Russia and Eastern Europe. So no need at all to hypothesize one as a front for the other. ..."
"... It's not inconceivable. Think of Pierre Omidyar and USAID in Ukraine ..."
"... Agreed. Just a dumb excuse to persuade people we can't have nice things. Obama may have campaigned on "Yes We Can" in 2008 but Hillary in 2016 was the soaring voice of "No, You Can't." ..."
"... Pretty clear from the rich people and a few very rich people I have encountered, professionally and personally (once shared a secretary with Bill Gates Sr.) that the empathy and comity and decency drivers never got installed with the original programming. ..."
"... Everything Soros does is to line his own pockets I'm afraid. This will fall on deaf ears. For them, it's never enough money. That is what this is really about. Behind the curtains, you are dealing with a bunch of people who care nothing about the collective good and everything about their own net worth. Nothing else matters to them. ..."
I find the current moment in history very painful. Open societies are
in crisis, and various forms of closed societies from fascist
dictatorships to mafia states are on the rise. How could this happen?
The only explanation I can find is that
elected leaders failed to
meet voters' legitimate expectations and aspirations
and that this
failure led electorates to become disenchanted with the prevailing
versions of democracy and capitalism. Quite simply, many people felt that
the elites had stolen their democracy.
Not to mention their money, as the foreclosure crisis showed.
After the collapse of the Soviet Union, the US emerged as the sole
remaining superpower, equally committed to the principles of democracy
and free markets. The major development since then has been the
globalization of financial markets, spearheaded by advocates who argued
that globalization increases total wealth. After all, if the winners
compensated the losers, they would still have something left over.
The argument was misleading, because it ignored the fact that the
winners seldom, if ever, compensate the losers
. But the potential
winners spent enough money promoting the argument that it prevailed .
Globalization has had far-reaching economic and political
consequences. It has brought about some economic convergence between poor
and rich countries; but it increased inequality within both poor and rich
countries. In the developed world,
the benefits accrued mainly to
large owners of financial capital
, who constitute less than 1% of
the population. The
lack of redistributive policies is the main
source of the dissatisfaction
that democracy's opponents have
exploited. But there were other contributing factors as well,
particularly in Europe.
Therefore, the neoliberal project, considered under the aspect of
justice, was destined to implode, and known to be so destined from the very
beginning, since ultimately for popular acceptance it depends on
redistribution, but "winners seldom, if ever, compensate the losers." So why
throw good money after bad?
Now, to be fair, some more fair-minded mainstream academics are trying to
improve neoliberalism by bringing redistribution forward. First, why - after
forty years of neoliberalism - would anyone trust them? For example, a
current popular topic is the replacement of all wage work by robots. And
sometimes the topic "How to help all those poor
losers
workers"
is vaguely discussed. Are we really to believe any help will be forthcoming?
Or that, if it comes, it won't be gate-keepered and means-tested to death?
History says no. Experience says no.
Second,
neoliberalism puts markets first
. Always. So there's no reason to think
that losers will ever be compensated, because there's no market in doing
that. In any case, how do you put a price on a destroyed Main Street or a
child dead from opiates?
The neoliberal project has finally failed. It cannot secure a popular
mandate, and by its nature cannot ever secure one. Therefore, anyone
dedicated to an open society should not fund it. One might argue that
alternatives to that project should be funded, but I think (see above) that
only small-d democratic projects can create such alternatives, and they
should be self-funded.
Conclusion
I think philanthropy even on the Nineteenth Century Robber Baron model -
Carnegie Libraries, the Frick Museum, or genuine scholarship[1] - would be
preferable to continuing to fund Democrats, or neoliberal projects
generally. Soros should consider those alternatives. Short neoliberalism.[2]
Lambert Strether has been blogging, managing online communities, and
doing system administration 24/7 since 2003, in Drupal and WordPress.
Besides political economy and the political scene, he blogs about
rhetoric, software engineering, permaculture, history, literature, local
politics, international travel, food, and fixing stuff around the house.
The nom de plume "Lambert Strether" comes from Henry James's The
Ambassadors: "Live all you can. It's a mistake not to." You can follow
him on Twitter at @lambertstrether. http://www.correntewire.com
mothyGeithner
,
December 30, 2016 at 1:26 pm
I'm reminded of Dan Snyder, the owner of the football team from
Landover, Maryland.
Snyder is a guy who sold three business ventures for crazy valuations
for companies that didn't exist in any capacity a few years later or
didn't have anything beyond pizzazz. Yet, Snyder is a billionaire. Why?
What good is he? Why shouldn't the government say, "hey, we will leave
you with $25 million, but we are taking the rest."? There is no rationale
reason for billionaires to exist, so billionaires have to come up with a
reason for why their billions are justified without giving the money
away. Dan Snyder runs a football team into the ground. George Soros tries
to fight villains of his youth, Nazis and Communists under the bed before
people realize they should just get rid of billionaires.
Snyder has to run the football team because he has to prove he's worth
it and not the by product of inane Fed and tax policies that turned two
bit operations into over night IPO bonanzas. Why isn't the guy who
invented synthetic diamonds a billionaire or even a millionaire?
Wallace
: [while eating some Chicken McNuggets]
Man, these s****s is right, yo.
Malik 'Poot' Carr
: [with his mouth full] Mm-hmm.
Wallace
: Good with the hot sauce too, yo.
Malik 'Poot' Carr
: Most definitely.
Wallace
: Yo, D, you want some nuggets?
D'Angelo Barksdale
: Nah, go ahead, man.
Wallace
: Man, whoever invented these, yo, he off the
hook.
Malik 'Poot' Carr
: What?
Wallace
: Mm. M********* got the bone all the way out
the damn chicken. 'Til he came along, n****s been chewin' on
drumsticks and s***, gettin' they fingers all greasy. He said, " Later
for the bone. Let's nugget that meat up and make some real money."
Malik 'Poot' Carr
: You think the man got paid?
Wallace
: Who?
Malik 'Poot' Carr
: Man who invented these.
Wallace
: S***, he richer than a m*********.
D'Angelo Barksdale
: Why? You think he get a
percentage?
Wallace
: Why not?
D'Angelo Barksdale
: N****, please. The man who
invented them things? Just some sad-ass down at the basement at
McDonald's, thinkin' up some s*** to make some money for the real
players.
Malik 'Poot' Carr
: Naw, man, that ain't right.
D'Angelo Barksdale
: F*** "right." It ain't about
right, it's about money. Now you think Ronald McDonald gonna go down
in that basement and say, "Hey, Mista Nugget, you the bomb. We sellin'
chicken faster than you can tear the bone out. So I'm gonna write my
clowny-ass name on this fat-ass check for you"?
Wallace
: S***.
D'Angelo Barksdale
: Man, the n**** who invented them
things still workin' in the basement for regular wage, thinkin' up
some s*** to make the fries taste better or some s*** like that.
Believe.
[pause]
Wallace
: Still had the idea, though.
Everything Lambert states he is correct, but as much as Soros's money
is amplified by and mirrors NED and USAID money, it might be his job to
invest in Democrat, Neoliberal, and Regime Change projects. He seems to
function as a front/shell company like Chaz T. MAIN (Confessions of an
Economic Hitman, John Perkins) or Business International Corp. (
http://johnpilger.com/articles/power-illusion-and-americas-last-taboo
)
Soros and the State Department (or the dominant faction
thereof) have roughly the same prescription for Russia and
Eastern Europe. So no need at all to hypothesize one as a front
for the other.
Isn't he a frontman for the pretense of democracy? and the pretense
that billionaires are concerned with the working class in general
rather than a resource to be exploited and discarded?
I see Soros useful in that he feeds the myth that there are two
parties and is a pr funder marketing the myth of choice to the voters.
His words are counter to the vast majority of what he funds. I try to
focus on what people are doing not what they say.
He could personally build vast swaths of manufacturing plants and
hand them over to the workers. He could leave his wealth to a
volunteer co-op board that only grants funds to employee owned
start-ups. He could build vast swaths of non-profit public housing and
hand them over to the communities.
Also, this is not a criticism, but it looks like your argument
is for lesser evilism. Your first proposal that he stop investing
in D elections as they are losers seems merely to be a capitalist
argument that he isn't getting a return on his investment.
I'm not to sure what your second proposal of supporting small d
institions refers to maybe think tanks and media? but supporting
lower level elections is again back to the 'more and better Ds'.
I get your strategy is to take over the D party but it seems
that 'more and better Ds' that just failed to get traction with the
2016 election. Promoting that billionaires could fine tune their
influence looks like an amelioration strategy of conservatism
rather than an affirmative policy platform in opposition to the Rs.
The problem for Soros and all billionaires interested in the politics
game is that they cannot fathom voting against their own interests and they
must pick credentialed and vetted candidates. Somebody like Hillary is great
for them. For example, when she stated during the primary against Bernie
that we can't just have outright free public higher education because rich
people would benefit unfairly. That is coding to say that we won't
redistribute ill gotten gains for the purposes of building a stable and
functioning society.
> we can't just have outright free public higher education becuase
rich people would benefit unfairly
Agreed. Just a dumb excuse to persuade people we can't have nice
things. Obama may have campaigned on "Yes We Can" in 2008 but Hillary in
2016 was the soaring voice of "No, You Can't."
Especially since, in the not too distant past, we actually
had
"nice things" like tuition-free state universities but we
allowed them to be taken away from us.
Pretty clear from the rich people and a few very rich people I have
encountered, professionally and personally (once shared a secretary with
Bill Gates Sr.) that the empathy and comity and decency drivers never got
installed with the original programming.
And I "follow" Gates Jr. on Twitter, when I can stand to look in, and
what a piece of work he, or his Twavatar, is. Always on his book and on his
game. And it seems like just a game to him, from the way he plays his
position.
Now Trumpunist stars are in the ascendant. And the planet gets more heat
load, every moment of every day Too bad the looters are on the way to
"conquering death" for themselves, while "dealing death" to the rest of us
> Too bad the looters are on the way to "conquering death" for
themselves, while "dealing death" to the rest of us
I wonder what they'll do once they realize they've been had by a bunch
of grifting con artists, hardly different from themselves. When the
billionaires realize Mars is a death trap worse than Earth, will they
feel any remorse about destroying the planet? Or has the "market"
whittled that away, along with the rest of the human emotions like shame,
guilt, and compassion for their fellow man? When they realize eternal
youth and immortality isn't ever going to happen, partly because they've
hollowed out their own civilization and corrupted its science, will they
regret forcing so many others into destitution and an early grave? Maybe
for about 30 seconds, I reckon. The rest cower in self-protective
ignorance.
It's fun to look to pop culture for illustrative myths and
potentially illuminating analogies. I like "Wall-e" and "Elysium" and
"Terminator" and "Robocop" and for dessert, a big helping of "Soylent
Green "
The dillusionati always drown in their own vomit it has been that way
for the last 2 million sunsets all the technology in the world wont
change that if one can not find peace and happiness with a few million
dollars, chasing billions to spend more money 4 monets on the wall in the
hall is a losing proposition
As to georgi sore-ohs redirecting his money the klown princes will
soon be abandoning their givings with the coming removal of the estate
tax putting many non profits out of business
"non profit" hospitals will now be able to convert to for profit
dividend paying entities instead of consultant skim capital kiting
enterprises
The rober baron era existed before income taxes so I expect sow-oats
to slowly melt away now that he can hand out his remaining assets
directly and enjoy the rest of his youth with his robobabe .
Despite the best efforts of the dillusionati these past 5 10
thousand years once they run out of people to prey with they turn on each
other
these are weak creatures, power hungry and control crazy based on
their own fears and limitations
The bernaze sauce isnt spicy enough anymore
the rewind button on vcrs killed the soviet union and youtube and the
capacity of the average shmoe to cut, paste, edit and freeze frame has
reduced the mesmerization to a near stand still
The game is up and there is no more room left to squeeze more gold
tips on a chip no matter how much cooling one throws into the mix
The iPhone is just newton with the security state release of tech that
has been aroud for over 20 years
The programs still have bugs/features that can not be fixed based on a
unix/linux platform from over 50 years ago designed to exist in a closed
loop circuit decades of patch and pray can not be fixed by decree
one of the funders of one of the fake news "overseers"(u of penn/annanb)
runs an outfit in nyc that prices out derivatives out over 150 years from
now but all the tech can't tell me if it is going to rain or snow in 72
hours
The dillusionati are running on fumes
What is amusing is watching the panic as they fear resistance and
revolution that will never develop people just want to eat, breath and
live a reasonable life these weak dillusionati contemplate and imagine
how "they" in their weakness and fears would react but many parts of
america have already seen and lived thru an economic apocalypse
even manhattan was a dead zone on the west side when all their
shipping moved to LA and all the piers were left open and abandoned with
jokes about the only place to find nypd was at donut shops abounding
Living in the south bronx or coney island was living a real life
version of madmax
Anyhoot methinx, in respects to the original posting sore-oats just
does his freedom and democracy funding to tip the scales on his out of
the money tail risk currency options investing he just games the system
with a smile
Onto a wondrous and pleasant 2017
The fun has just begun
Less fences and more dances let 2017 be the year we talk past our
differences with our neighbors and get on with the being of being
(Damn that was long winded I thought I gave that up )
Everything Soros does is to line his own pockets I'm afraid. This
will fall on deaf ears. For them, it's never enough money. That is what this
is really about. Behind the curtains, you are dealing with a bunch of people
who care nothing about the collective good and everything about their own
net worth. Nothing else matters to them.
They'd rather watch the world burn than lose money.
Hope this isn't dinged as an
ad hominem,
but I recall that old
central European expression: "Anybody with a Hungarian for a friend doesn't
need an enemy."
Now that can be read in several ways - but always to the same end, some
allies you don't want. Soros may be a Dark Side conduit for neocon or neolib
instincts and pelf; or he may just be pissing away his own money,
a la
Snyder, just in a less benign enterprise. Neither scenario undercuts the
"bootstrap" metaphor for progressive funding. We should, therefore, be
prepared to see increased efforts to diminish "self-funding" mechanisms that
leave too much power in the hands of the little people. Not an
ad hom,
I'm not talking about Munchkins.
Soros need not be worried. Even without his money funding all these
projects, plenty of people will join him in hell afterwards. Once his Open
Ideas have been tested there, then he is welcomed to port those here, the
lesser hell.
The argument was misleading, because it ignored the fact that the
winners seldom, if ever, compensate the losers.
Yep, which is why sources of unjust wealth inequality such as
government privileges for private credit creation should be precluded at
their SOURCE.
In other words, ethical financing is needed to insure that increases in
productivity and wealth are justly shared.
One thing all Americans should believe in is "Thou shall not steal"
even if by subtle means such as implicit privileges for a usury cartel.
I would argue that the U.S. hasn't been interested in democracy since, at
least, WWII. They have performed coups and assassinations and other
destabilizations in other countries (and, I would argue, here with JFK, RFK,
MLK, Jr., and who knows how many others in those "freak" small plan
accidents over the years) in favor of "friendly" dictators and tyrants.
Although Soros claims to hate Nazis and Communists, Allen Dulles was quite
partial to Nazis and made sure many of them did not face trial at Nuremberg
but instead were employed in the U.S., West Germany and other places.
If Soros wanted to put his money to good use, he could invest in getting
some transparency and cohesiveness to our election system. Had he done that
after 2000, John Kerry would have been president and probably Hillary also.
And many Dem senators, congress critters, etc. To pretend that the elections
are honest and represent the people's will has pretty much been discredited,
as far as I'm concerned.
My understanding is that Soros likes instability. It's good for his
market plays.
Call an annihilation an annihilation. Auschwitz was NOT a "resettlement
to the East". The 1931 Ukrainian Famine was NOT a "Collectivization". Using
our precious language to lie and obscure .
Despicable
There is a recording out today of Hillary Clinton talking to her
biggest donors, laying blame for her loss entirely on the shoulders
of Putin and Comey.
Let's break this down, shall we?
In the first place, she is talking to her "donors." There's your
first problem right there. Hers was always a campaign of the donors,
by the donors and for the donors. That's exactly what the American
people were turned off by. At no time did she actually talk to and
connect with them.
But more fundamentally, there was never a chance of her winning
unless she won the popular vote by MORE than 2 1/2 million. As we
have already pointed out, the last four presidential elections that
Democrats have won in the electoral college were associated with a
MINIMUM popular vote margin of about 5 million and an average of 7
million.
Let's take WI for example. The governor, lieutenant governor,
attorney general and state treasurer are all Republicans, as are 5 of
8 members of the US House, and the senators are split. By what
delusional political consultant standard is WI to be seen as an
inherently blue state? And she never set foot in WI to campaign after
the primaries.
What blue wall where?
If you win the popular vote by a minimum of 5 million, OK then
sure,
there's your blue wall, otherwise all you have is blue tissue paper.
So the day Clinton locked up the Democratic nomination, question
number one, two and three should have been, "How the hell can I, the
Democratic nominee with the highest negatives ever, win by at least 5
million in the popular vote count?"
She told her donors then that the general election was going to be
close. The general election was lost right there.
Where could all those extra votes have come from?
At that very moment we were pleading with you to rally behind an
initiative to tap Bernie Sanders for VP. The Clinton people shouted
us down. The Bernie people told us to shut up. Bernie can still win
it all they claimed, totally detached from the reality of even the
pledged delegate count.
But Bernie still got more than 13 million votes in the primaries.
There's your general election victory right there, including taking
back the Senate and bigger gains in the House.
Just as they are doing now, the Clinton's political genius dream
team
came up with the wrong answers last July. Not only have they learned
nothing, they are perversely determined to learn nothing.
Clinton had a 65% negative approval rating before Putin did a
thing.
If Comey was the big problem that should have been known on July 5th
when he called her out for being extremely careless. The "good news"
that she was not going to be indicted did not give her a big positive
bump. The tone deaf Kaine VP pick was more than 2 weeks later.
She had more than 2 weeks to come up with the answer to the
question,
"How the hell do we overcome all these negatives by a WIDE margin?"
And her answer was a corporate TPP supporter for VP?
Are you kidding us?
As unpopular as she was, Trump was only MARGINALLY more unpopular.
That was not a wide margin in her favor, and a wide margin was
mandatory. That was why she lost.
The blame list does not stop with Putin and Comey. Also this week
she
accused President Obama of not doing enough. If Obama actually
retained the power to substantially rally anyone, he would have
rallied people to demand confirmation of Merrick Garland for the
Supreme Court, and THAT would have positively impacted Hillary's
chances by highlighting Republican disrespect and obstructionism.
Some blame Bernie for not doing enough. Bernie never had the power
to
MAKE his supporters like her. By doing what . . . standing on stage
next to her more? We guarantee you she did not want him standing on
stage with her more times that he did.
But all his 13 million votes, not just a begrudging part, would
have
been hers if she had genuinely embraced him and his supporters by
putting him on the ticket too as VP in a display of unity. His
popularity, the highest of any candidate, would have rubbed off on
her big time.
The White House was hers and she threw it away to appease her
donors,
to raise an extra 100 million dollars to burn.
How are we so sure of this?
We did a private outreach to the Bernie or Bust people at the time.
What if she picks Bernie for VP, would you go for it? The answer was
not hell no. It was, we'll consider it.
That's called a yes.
And tomorrow we will talk about how to reconstruct the big tent
that
was lost by people too busy condemning people on the other side of
the tent to actually win an election.
Making money is a knack usually with some very modest intellectual input.
These guys know this and that's why once they have their big pile they start
meddling in politics using the clout ( read power ) that their billions
gives them. The politicians on the other hand know little, or nothing about
making money, but are enthralled by the billionaires . What they have in
common is that they all crave kudos to justify their position and its
maintenance. That they are a bunch of vain, self-aggrandising sociopaths is
beyond question; it's just that it took the Great Financial Crash of 2008
for most of us to realise this and that realisation has now spread to large
numbers of the populations in most of the West . So now they have a problem,
but how to deal with it they have no idea because there isn't a scintilla of
empathy in those minds of theirs. And so now we have Trump and Brexit etc.
From a Guardian article on insecure "smart Meters" put up by
Jerri-Lynn in the 12/31 Links, the humors line of the year: "The Power
[players] have to understand that with great power comes great
responsibility." Nyuk nyuk nyuk Should read, "with great power comes
great power "
democracy with a small d is a fine idea for your schools and other issues
that affect your local community. Alas, for everything else, you are living
in a complex post-agrarian society in which your very ability to eat depends
on the amorphous structure called "the economy". Which in turn depends on
central banks, trade, national policies, etc. One could deconstruct this
economy, but I somehow doubt that such deconstruction would lead to
exceptional prosperity for all. There are multiple examples of deconstructed
countries around the world, and they are not exactly an inspiration.
Soros is one of the few bright spots among billionaires, though I am sure
he is not perfect. He understands that, through generational forgetting, the
world is now facing a resurgence of fascism. He understands it better than
most, because he is one of the very few survivors of the holocaust that are
still alive. Fascism is so dangerous because, as a method of political
advancement, it works well. Appeal to emotion, particularly fear, works
better that appeal to reason. It has always been thus. You can second guess
him all you want, but you have to give this to him: he is one of the very
few left that are trying to do something to stop this wave before it plunges
the world into a sequence of wars with nukes on day one.
You would do well to join him, rather than dis him.
As far as neoliberalism goes, one should also be careful throwing this
label around indiscriminately. Human population more than doubled in my
lifetime, and all these new people are competing for resources. The US will
not escape unscathed. Governments can mitigate to some degree, but they
cannot fully stop some decline in the living standard until technologies
catch up and reduce pressures on resources. Furthermore, US relies on
imports for 50% of her oil, which also means US needs to trade and be
competitive on world markets. There are no free lunches and easy solutions
that will magically make everything better overnight. Thinking there are is
unrealistic in its own right.
Hillary Clinton, for all her faults, was a center left politician. She
was defeated by a con artist who was riding a wave of about 10-15 years
worth of fascist propaganda emanating from increasingly radicalized
Republican party. The greatest danger now is actually radicalization of the
left, as this will put the US on the path to become another South American
permanent disaster. So, when you attack those "Democratic elites", be
careful what you wish for, and be careful not to become part of the problem,
rather than part of the solution.
"Hillary Clinton, for all her faults, was a center-left politician."
Her record at State, not to mention most of the policy positions she has
supported throughout her career, is a vehement refutation of that
assertion.
We are living in the twilight of the ideologues. Whatever proves to be
practical will now prevail. Soros always had one wheel stuck in the ditch.
And Hillary, for all her experience, wound up knowing nothing. It was
amazing. Very wizard of oz. Capitalism can morph but it can't go back. We
have all new, complex circumstances now and free marketeering in an open
society BS just hasn't got a chance of fixing things anymore. Soros should
try to understand this. So should Trump.
All I can say is, if Soros's Quantum Fund performed the way the Democrats
had the last 8 years, heads would definitely be rolling. Odd that he doesn't
demand the same accountability for his dollars when it comes to his Open
Society Foundation.
All I can say is that if Soros's fund, Quantum, delivered performance
comparable to what the Democrats had delivered over the last 8 years
electorally, heads would definitely roll and there would be no more dollars
forthcoming. Interesting that this accountability doesn't apply here.
This was written in 2011 but it summarizes Obama presidency pretty nicely, even today. Betrayer
in chief, the master of bait and switch. That is the essence of Obama legacy. On "Great Democratic betrayal"...
Obama always was a closet neoliberal and neocon. A stooge of neoliberal financial oligarchy, a puppet,
if you want politically incorrect term. He just masked it well during hist first election campaigning
as a progressive democrat... And he faced Romney in his second campaign, who was even worse, so after
betraying American people once, he was reelected and did it twice. Much like Bush II. He like
another former cocaine addict -- George W Bush has never any intention of helping American people, only
oligarchy.
Notable quotes:
"... IN contrast, when faced with the greatest economic crisis, the greatest levels of economic inequality, and the greatest levels of corporate influence on politics since the Depression, Barack Obama stared into the eyes of history and chose to avert his gaze. ..."
"... We (yes, we) recognise that capitalism is the most efficient way to maximise overall prosperity and quality of life. But we also recognise that unfettered, it will ravage the environment, abuse labor, and expand income disparity until violence or tragedy (or both) ensues. ..."
"... These are the lessons we've learned since the industrial revolution, and they're the ones that we should be drawing from the past decade. We recognise that we need a strong federal government to check these tendencies, and to strike a stable, sustainable balance between prosperity, community, opportunity, wealth, justice, freedom. We need a voice to fill the moral vacuum that has allowed the Koch/Tea/Fox Party to emerge and grab power. ..."
"... Americans know this---including, of course, President Obama (see his April 13 speech at GW University). But as this article by Dr. Westen so effectively shows, Obama is incompetent to lead us back ..."
"... he is not competent to lead us back to a state of American morality, where government is the protector of those who work hard, and the provider of opportunity to all Americans. ..."
"... I've heard him called a mediator, a conciliator, a compromiser, etc. Those terms indicate someone who is bringing divergent views together and moving us along. That's part of what a leader does, though not all. Yet I don't think he's even lived up to his reputation as a mediator. ..."
"... Almost three years after I voted for Obama, I still don't know what he's doing other than trying to help the financial industry: the wealthy who benefit most from it and the technocrats who run it for them. But average working people, people like myself and my daughter and my grandson, have not been helped. We are worse off than before. And millions of unemployed and underemployed are even worse off than my family is. ..."
"... So whatever else he is (and that still remains a mystery to me), President Obama is not the leader I thought I was voting for. ..."
"... I knew that Obama was a charade early on when giving a speech about the banking failures to the nation, instead of giving the narrative Mr. Westen accurately recommended on the origins of the orgy of greed that just crippled our economy and caused suffering for millions of Americans ..."
"... He should have been condemning the craven, wanton, greed of nihilistic financial gangsters who hijacked our economy. Instead he seemed to be calling for all Americans not to hate rich people. That was not the point. Americans don't hate rich people, but they should hate rich people who acquire their wealth at the expense of the well being of an entire nation through irresponsible, avaricious, and in some instances illegal practices, and legally bribe politicians to enact laws which allow them to run amok over our economy without supervision or regulation. ..."
"... I knew then that Obama was either a political lemon, in over his head, an extremely conflict averse neurotic individual with a compulsive need for some delusional ideal of neutrality in political and social relations, or a political phony beholden to the same forces that almost destroyed the country as Republicans are. ..."
When Barack Obama rose to the lectern on Inauguration Day, the nation was in tatters. Americans
were scared and angry. The economy was spinning in reverse. Three-quarters of a million people lost
their jobs that month. Many had lost their homes, and with them the only nest eggs they had. Even
the usually impervious upper middle class had seen a decade of stagnant or declining investment,
with the stock market dropping in value with no end in sight. Hope was as scarce as credit.
In that context, Americans needed their president to tell them a story that made sense of what
they had just been through, what caused it, and how it was going to end. They needed to hear that
he understood what they were feeling, that he would track down those responsible for their pain and
suffering, and that he would restore order and safety. What they were waiting for, in broad strokes,
was a story something like this:
"I know you're scared and angry. Many of you have lost your jobs, your homes, your hope. This
was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated
with your lives and futures. It was made by conservative extremists who told us that if we just eliminated
regulations and rewarded greed and recklessness, it would all work out. But it didn't work out. And
it didn't work out 80 years ago, when the same people sold our grandparents the same bill of goods,
with the same results. But we learned something from our grandparents about how to fix it, and we
will draw on their wisdom. We will restore business confidence the old-fashioned way: by putting
money back in the pockets of working Americans by putting them back to work, and by restoring integrity
to our financial markets and demanding it of those who want to run them. I can't promise that we
won't make mistakes along the way. But I can promise you that they will be honest mistakes, and that
your government has your back again." A story isn't a policy. But that simple narrative - and the
policies that would naturally have flowed from it - would have inoculated against much of what was
to come in the intervening two and a half years of failed government, idled factories and idled hands.
That story would have made clear that the president understood that the American people had given
Democrats the presidency and majorities in both houses of Congress to fix the mess the Republicans
and Wall Street had made of the country, and that this would not be a power-sharing arrangement.
It would have made clear that the problem wasn't tax-and-spend liberalism or the deficit - a deficit
that didn't exist until George W. Bush gave nearly $2 trillion in tax breaks largely to the wealthiest
Americans and squandered $1 trillion in two wars.
And perhaps most important, it would have offered a clear, compelling alternative to the dominant
narrative of the right, that our problem is not due to spending on things like the pensions of firefighters,
but to the fact that those who can afford to buy influence are rewriting the rules so they can cut
themselves progressively larger slices of the American pie while paying less of their fair share
for it.
But there was no story - and there has been none since.
In similar circumstances, Franklin D. Roosevelt offered Americans a promise to use the power of
his office to make their lives better and to keep trying until he got it right. Beginning in his
first inaugural address, and in the fireside chats that followed, he explained how the crash had
happened, and he minced no words about those who had caused it. He promised to do something no president
had done before: to use the resources of the United States to put Americans directly to work, building
the infrastructure we still rely on today. He swore to keep the people who had caused the crisis
out of the halls of power, and he made good on that promise. In a 1936 speech at Madison Square Garden,
he thundered, "Never before in all our history have these forces been so united against one candidate
as they stand today. They are unanimous in their hate for me - and I welcome their hatred."
When Barack Obama stepped into the Oval Office, he stepped into a cycle of American history, best
exemplified by F.D.R. and his distant cousin, Teddy. After a great technological revolution or a
major economic transition, as when America changed from a nation of farmers to an urban industrial
one, there is often a period of great concentration of wealth, and with it, a concentration of power
in the wealthy. That's what we saw in 1928, and that's what we see today. At some point that power
is exercised so injudiciously, and the lives of so many become so unbearable, that a period of reform
ensues - and a charismatic reformer emerges to lead that renewal. In that sense, Teddy Roosevelt
started the cycle of reform his cousin picked up 30 years later, as he began efforts to bust the
trusts and regulate the railroads, exercise federal power over the banks and the nation's food supply,
and protect America's land and wildlife, creating the modern environmental movement.
Those were the shoes - that was the historic role - that Americans elected Barack Obama to fill.
The president is fond of referring to "the arc of history," paraphrasing the Rev. Dr. Martin Luther
King Jr.'s famous statement that "the arc of the moral universe is long, but it bends toward justice."
But with his deep-seated aversion to conflict and his profound failure to understand bully dynamics
- in which conciliation is always the wrong course of action, because bullies perceive it as weakness
and just punch harder the next time - he has broken that arc and has likely bent it backward for
at least a generation.
When Dr. King spoke of the great arc bending toward justice, he did not mean that we should wait
for it to bend. He exhorted others to put their full weight behind it, and he gave his life speaking
with a voice that cut through the blistering force of water cannons and the gnashing teeth of police
dogs. He preached the gospel of nonviolence, but he knew that whether a bully hid behind a club or
a poll tax, the only effective response was to face the bully down, and to make the bully show his
true and repugnant face in public.
IN contrast, when faced with the greatest economic crisis, the greatest levels of economic
inequality, and the greatest levels of corporate influence on politics since the Depression, Barack
Obama stared into the eyes of history and chose to avert his gaze. Instead of indicting the
people whose recklessness wrecked the economy, he put them in charge of it. He never explained that
decision to the public - a failure in storytelling as extraordinary as the failure in judgment behind
it. Had the president chosen to bend the arc of history, he would have told the public the story
of the destruction wrought by the dismantling of the New Deal regulations that had protected them
for more than half a century. He would have offered them a counternarrative of how to fix the problem
other than the politics of appeasement, one that emphasized creating economic demand and consumer
confidence by putting consumers back to work. He would have had to stare down those who had wrecked
the economy, and he would have had to tolerate their hatred if not welcome it. But the arc of his
temperament just didn't bend that far.
Michael August 7, 2011
Eloquently expressed and horrifically accurate, this excellent analysis articulates the frustration
that so many of us have felt watching Mr...
Bill Levine August 7, 2011
Very well put. I know that I have been going through Kόbler-Ross's stages of grief ever since
the foxes (a.k.a. Geithner and Summers) were...
AnAverageAmerican August 7, 2011
"In that context, Americans needed their president to tell them a story that made sense of
what they had just been through, what caused it,...
Unfortunately, the Democratic Congress of 2008-2010, did not have the will to make the economic
and social program decisions that would have improved the economic situation for the middle-class;
and it is becoming more obvious that President Obama does not have the temperament to publicly
push for programs and policies that he wants the congress to enact.
The American people have a problem: we reelect Obama and hope for the best; or we elect a Republican
and expect the worst. There is no question that the Health Care law that was just passed would
be reversed; Medicare and Medicare would be gutted; and who knows what would happen to Social
Security. You can be sure, though, that business taxes and regulation reforms would not be in
the cards and those regulations that have been enacted would be reversed. We have traveled this
road before and we should be wise enough not to travel it again!
Brilliant analysis - and I suspect that a very large number of those who voted for President
Obama will recognize in this the thoughts that they have been trying to ignore, or have been trying
not to say out loud. Later historians can complete this analysis and attempt to explain exactly
why Mr. Obama has turned out the way he has - but right now, it may be time to ask a more relevant
and urgent question.
If it is not too late, will a challenger emerge in time before the 2012 elections, or will
we be doomed to hold our noses and endure another four years of this?
Very eloquent and exactly to the point. Like many others, I was enthralled by the rhetoric
of his story, making the leap of faith (or hope) that because he could tell his story so well,
he could tell, as you put it, "the story the American people were waiting to hear."
Disappointment has darkened into disillusion, disillusion into a species of despair. Will I
vote for Barack Obama again? What are the options?
This is the most brilliant and tragic story I have read in a long time---in fact, precisely
since I read when Ill Fares the Land by Tony Judt. When will a leader emerge with a true moral
vision for the federal government and for our country? Someone who sees government as a balance
to capitalism, and a means to achieve the social and economic justice that we (yes, we) believe
in? Will that leadership arrive before parts of America come to look like the dystopia of Johannesburg?
We (yes, we) recognise that capitalism is the most efficient way to maximise overall prosperity
and quality of life. But we also recognise that unfettered, it will ravage the environment, abuse
labor, and expand income disparity until violence or tragedy (or both) ensues.
These are the lessons we've learned since the industrial revolution, and they're the ones
that we should be drawing from the past decade. We recognise that we need a strong federal government
to check these tendencies, and to strike a stable, sustainable balance between prosperity, community,
opportunity, wealth, justice, freedom. We need a voice to fill the moral vacuum that has allowed
the Koch/Tea/Fox Party to emerge and grab power.
Americans know this---including, of course, President Obama (see his April 13 speech at
GW University). But as this article by Dr. Westen so effectively shows, Obama is incompetent to
lead us back to America's traditional position on the global economic/political spectrum.
He's brilliant and eloquent. He's achieved personal success that is inspirational. He's done some
good things as president. But he is not competent to lead us back to a state of American morality,
where government is the protector of those who work hard, and the provider of opportunity to all
Americans.
Taxes, subsidies, entitlements, laws... these are the tools we have available to achieve our
national moral vision. But the vision has been muddled (hijacked?) and that is our biggest problem.
-->
I voted for Obama. I thought then, and still think, he's a decent person, a smart person, a
person who wants to do the best he can for others. When I voted for him, I was thinking he's a
centrist who will find a way to unite our increasingly polarized and ugly politics in the USA.
Or if not unite us, at least forge a way to get some important things done despite the ugly polarization.
And I must confess, I have been disappointed. Deeply so. He has not united us. He has not forged
a way to accomplish what needs to be done. He has not been a leader.
I've heard him called a mediator, a conciliator, a compromiser, etc. Those terms indicate
someone who is bringing divergent views together and moving us along. That's part of what a leader
does, though not all. Yet I don't think he's even lived up to his reputation as a mediator.
Almost three years after I voted for Obama, I still don't know what he's doing other than
trying to help the financial industry: the wealthy who benefit most from it and the technocrats
who run it for them. But average working people, people like myself and my daughter and my grandson,
have not been helped. We are worse off than before. And millions of unemployed and underemployed
are even worse off than my family is.
So whatever else he is (and that still remains a mystery to me), President Obama is not
the leader I thought I was voting for. Which leaves me feeling confused and close to apathetic
about what to do as a voter in 2012. More of the same isn't worth voting for. Yet I don't see
anyone out there who offers the possibility of doing better.
This was an extraordinarily well written, eloquent and comprehensive indictment of the failure
of the Obama presidency.
If a credible primary challenger to Obama ever could arise, the positions and analysis in this
column would be all he or she would need to justify the Democratic party's need to seek new leadership.
I knew that Obama was a charade early on when giving a speech about the banking failures
to the nation, instead of giving the narrative Mr. Westen accurately recommended on the origins
of the orgy of greed that just crippled our economy and caused suffering for millions of Americans,
he said "we don't disparage wealth in America." I was dumbfounded.
He should have been condemning the craven, wanton, greed of nihilistic financial gangsters
who hijacked our economy. Instead he seemed to be calling for all Americans not to hate rich people.
That was not the point. Americans don't hate rich people, but they should hate rich people who
acquire their wealth at the expense of the well being of an entire nation through irresponsible,
avaricious, and in some instances illegal practices, and legally bribe politicians to enact laws
which allow them to run amok over our economy without supervision or regulation.
I knew then that Obama was either a political lemon, in over his head, an extremely conflict
averse neurotic individual with a compulsive need for some delusional ideal of neutrality in political
and social relations, or a political phony beholden to the same forces that almost destroyed the
country as Republicans are.
"... You can't go all Ayn Rand/Gordon Gekko on the importance of greed as a motivator while claiming that wealth insulates ... from
temptation. ... ..."
"... And this is telling us something significant: namely, that supply-side economic theory is and always was a sham. It was never
about the incentives; it was just another excuse to make the rich richer. ..."
"... "The modern conservative is engaged in one of man's oldest exercises in moral philosophy: that is, the search for a superior
moral justification for selfishness." ..."
"... choosing a cabinet of billionaires, because rich men are incorruptible"...kind of like showering ZIRP on the Wall Street banking
cartel and letting them how to ration credit to the rest of economy...mostly their wealthy clientele, who use it for stock buy-backs
and asset speculation. ..."
"... Of course, 'liberal' economists see nothing wrong with trickle down, supply side economics, as long as it's the Wall Street
banking cartel who's in charge of it... ..."
"... Stiglitz: "I've always said that current monetary policy is not going to work because quantitative easing is based on a variant
of trickle-down economics. The lower interest rates have led to a stock-market bubble to increases in stock-market prices and huge
increases in wealth. But relatively little of that's been translated into increased and broad consumer spending." ..."
"... But pgl and many other '[neo[liberal' economists just can't get enough of the trickle down monetary policy...all the while
they vehemently condemn trickle down tax policy. ..."
"... You all think Trump can do worse than the sitting cabal adding $660B from Sep 2015 to the federal debt quietly keeping the
economy going for the incumbent party? ..."
"... The losers think the winners are as crooked as they! ..."
To belabor what should be obvious: either the wealthy care about having more money or they don't. If lower marginal tax rates
are an incentive to produce more, the prospect of personal gain is an incentive to engage in corrupt practices. You can't go
all Ayn Rand/Gordon Gekko on the importance of greed as a motivator while claiming that wealth insulates ... from temptation. ...
And this is telling us something significant: namely, that supply-side economic theory is and always was a sham. It was never
about the incentives; it was just another excuse to make the rich richer.
In one sentence, you still can't beat John Kenneth Galbraith's assessment: "The modern conservative is engaged in one of man's
oldest exercises in moral philosophy: that is, the search for a superior moral justification for selfishness."
Nothing is more admirable than the fortitude with which millionaires tolerate the disadvantages of their wealth. -- Nero
Wolfe
You need to know nothing else to understand the entirety of the conservative edifice.
JohnH :
"choosing a cabinet of billionaires, because rich men are incorruptible"...kind of like showering ZIRP on the Wall Street
banking cartel and letting them how to ration credit to the rest of economy...mostly their wealthy clientele, who use it for stock
buy-backs and asset speculation.
Of course, 'liberal' economists see nothing wrong with trickle down, supply side economics, as long as it's the Wall Street
banking cartel who's in charge of it...
But pgl and many other '[neo[liberal' economists just can't get enough of the trickle down monetary policy...all the while
they vehemently condemn trickle down tax policy.
yuan -> JohnH...
and few liberal economists have been more skeptical of QE's economic impact than Krugman.
You all think Trump can do worse than the sitting cabal adding $660B from Sep 2015 to the federal debt quietly keeping the
economy going for the incumbent party?
The losers think the winners are as crooked as they!
yuan -> ilsm...
when we can borrow over the long-term at 3% and have truly massive infrastructure and clean energy needs we should be borrowing
like military Keynesian republicans...
"... And this is telling us something significant: namely, that supply-side economic theory is and always was a sham. ..."
"... That it is and always a sham is irrelevant. It is THE NARRATIVE that matters! They had a compelling story and they stuck to
it. That's how you sell politics in this country. ..."
And this is telling us something significant: namely, that supply-side economic theory is and always was a sham.
Urgh. That it is and always a sham is irrelevant. It is THE NARRATIVE that matters! They had a compelling story and they
stuck to it. That's how you sell politics in this country.
Trump told a significant fraction of the population that he understood their problems and that he would fix them. He told
enough people what they wanted to hear - and did so with a convincing tone - that he got himself elected. That's how you win.
You sell people on your vision. If you tell a good story most people aren't going to reality-check it. Sad but true.
Krugman was clearly a neoliberal propagandist on payroll. He
should not be even discussed in this context because his
columns were so clearly partisan.
As for "Centrist Democrats" (aka Clinton wing of the
party) their power is that you have nowhere to go: they rule
the Democratic Party and the two party system guarantees that
any third party will be either squashed or assimilated.
In no way they need that you believe them: being nowhere
to go is enough.
Remember what happened with Sanders supporters during the
convention? They were silenced. And then eliminated. That's
how this system works.
Cal -> likbez...
, -1
Krugman is a polarizing agent here in RiverCity...to our
collective loss IMHO...as you know I don't have the Nobel.
But you might be giving him some hope with that "was"?
Clearly he does not need $.
He is writing for our....yes, American, maybe even Global
citizenship, which he thinks is in peril.
It is. Otherwise I'd be out fishing.
And you?
What's in it for you? Are you familiar with the history of
political party systems that transition in and out of 2
parties?
Is this little forum an example of the 2 party system:
pro/con Krugman?
Americans believe crazy things, yet they are outdone by
economists
Comment on Catherine Rampell on 'Americans - especially but
not exclusively Trump voters - believe crazy, wrong things'#1
Americans are NOT special. Since more than 5000 years people
believe things JUST BECAUSE they are absurd - in accordance
with Tertullian's famous dictum "credo quia absurdum".#2
As a matter of principle, almost everybody has the right
to his own opinion no matter how stupid, crazy, wrong, or
absurd; the only exception are scientists. The ancient Greeks
started science with the distinction between doxa (= opinion)
and episteme (= knowledge). Scientific knowledge is
well-defined by material and formal consistency. Knowledge is
established by proof, belief or opinion counts for nothing.
Opinion is the currency in the political sphere, knowledge
is the currency is the scientific sphere. It is extremely
important to keep both spheres separate. Since the founding
fathers, though, economists have not emancipated themselves
from politics. They claim to do science but they have never
risen above the level of opinion, belief, wish-wash,
storytelling, soap box propaganda, and sitcom gossip.
The orthodox majority still believes in these Walrasian
hard core absurdities: "HC1 economic agents have preferences
over outcomes; HC2 agents individually optimize subject to
constraints; HC3 agent choice is manifest in interrelated
markets; HC4 agents have full relevant knowledge; HC5
observable outcomes are coordinated, and must be discussed
with reference to equilibrium states." (Weintraub)
To be clear: HC2, HC4, HC5 are NONENTITIES like angels,
Spiderman, or the Easter Bunny.
The heterodox minority still believes in these ill-defined
Keynesian relationships: "Income = value of output =
consumption + investment. Saving = income - consumption.
Therefore saving = investment."
Until this day, Walrasians, Keynesians, Marxians,
Austrians hold to their provable false beliefs and claim to
do science. This is absurdity on stilts but it is swallowed
hook, line and sinker by every new generation of economics
students. Compared to the representative economist the
average political sucker is a genius.
Did not William Casey (CIA
Director) say, "We'll know
our disinformation program is
complete when everything the
American public believes is
false."?
Notable quotes:
"... The media should certainly shoulder some blame for parroting militarist propaganda but ordinary USAnians who continue to reward these scoundrels with their votes. And with Trump ordinary USAnians appear to have elected someone even more willing to shamelessly lie and loot than his predecessors. ..."
Americans are also led to believe a lot of crazy, wrong
things, such as Saddam had WMDs, or Iran had a nuclear
weapons program, to cite only the most outrageous lies
dutifully propagated by the mainstream media.
Before
Catherine Rampell criticizes ordinary Americans, she should
have the Washington Post engage in a little serious
introspection and self-criticism...
The media should certainly shoulder some blame for
parroting militarist propaganda but ordinary USAnians who
continue to reward these scoundrels with their votes. And
with Trump ordinary USAnians appear to have elected someone
even more willing to shamelessly lie and loot than his
predecessors.
It is time for ordinary USAnians to
engage in a lot of serious introspection and self-criticism.
I doubt this will happen until it's too late. (Very thankful
that I am not tied to this nation!)
>It is time for ordinary USAnians to engage in a lot of
serious introspection and self-criticism.
Don't hold your breath. Introspection and self-criticism
aren't our strong suits. They run counter to that whole
"American exceptionalism" thing.
> I doubt this will happen until it's too late.
I doubt that it will ever happen but, if it does, I have
no doubt that it will happen until after its too late to
salvage what currently passes for civilization in these
parts.
"There's a big difference between the task of trying to
sustain "civilisation" in its current form... and the task of
holding open a space for the things which make life worth
living. I'd suggest that it's this second task, in its many
forms, which remains, after we've given up on false hopes." (
http://dark-mountain.net/blog/what-do-you-do-after-you-stop-pretending/)
"... But there are other flavors too. For example Trump introduced another flavor which I called "bastard neoliberalism". Which is the neoliberalism without neoliberal globalization and without "Permanent revolution" mantra -- efforts for enlargement of the US led global neoliberal empire. Somewhat similar to Eduard Bernstein "revisionism" in Marxism. Or Putinism - which is also a flavor of neoliberalism with added "strong state" part and "resource nationalism" bent, which upset so much the US neoliberal establishment, as it complicates looting of the country by transnational corporations. ..."
"... Neoliberalism also can be viewed as a modern mutation of corporatism, favoring multinationals (under disguise of "free trade"), privatization of state assets, minimal government intervention in business (with financial oligarchy being like Soviet nomenklatura above the law), reduced public expenditures on social services, and decimation of New Deal, strong anti trade unionism stance and attempt to atomize work force (perma temps as preferred mode of employment giving employers "maximum flexibility") , neocolonialism and militarism in foreign relations (might makes right). ..."
"... The word "elite" in the context of neoliberalism has the same meaning as the Russian word nomenklatura. https://en.wikipedia.org/wiki/Nomenklatura, -- the political establishment holding or controlling both public and private power centers such as media, finance, academia, culture, trade, industry, state and international institutions. ..."
At this point, when I hear people use the words "neoliberal," "elites" and "the media" in unspecified
or highly generalized terms to make broad characterizations ... I know I'm dealing with an
unserious person.
It's a lot like when someone says "structural reform" without specification in an economic
discussion: An almost perfect indicator of vacuity.
likbez -> sanjait... , -1
Let's define the terms.
Neoliberals are those who adhere to the doctrine of Neoliberalism (the "prohibited" word
you should not ever see in the US MSM ;-)
In this sense the term is very similar to Marxists (with the replacement of the slogan of
"proletarians of all nations unite" with the "financial oligarchy of all countries unite").
Or more correctly they are the "latter day Trotskyites".
Neoliberalism consists of several eclectic parts such as neoclassic economics, mixture of
Nietzscheanism (often in the form of Ann Rand philosophy; with the replacement of concept of
Ubermench with "creative class" concept)) with corporatism. Like with Marxism there are different
flavors of neoliberalism and different factions like "soft neoliberalism" (Clinton third way)
which is the modern Democratic Party doctrine, and hard neoliberalism (Republican party version),
often hostile to each other.
But there are other flavors too. For example Trump introduced another flavor which I called
"bastard neoliberalism". Which is the neoliberalism without neoliberal globalization and without
"Permanent revolution" mantra -- efforts for enlargement of the US led global neoliberal empire.
Somewhat similar to Eduard Bernstein "revisionism" in Marxism. Or Putinism - which is also
a flavor of neoliberalism with added "strong state" part and "resource nationalism" bent, which
upset so much the US neoliberal establishment, as it complicates looting of the country by
transnational corporations.
Neoliberalism also can be viewed as a modern mutation of corporatism, favoring multinationals
(under disguise of "free trade"), privatization of state assets, minimal government intervention
in business (with financial oligarchy being like Soviet nomenklatura above the law), reduced
public expenditures on social services, and decimation of New Deal, strong anti trade unionism
stance and attempt to atomize work force (perma temps as preferred mode of employment giving
employers "maximum flexibility") , neocolonialism and militarism in foreign relations (might
makes right).
Like for any corporatist thinkers the real goals are often hidden under thick smoke screen
of propaganda.
The word "elite" in the context of neoliberalism has the same meaning as the Russian word
nomenklatura. https://en.wikipedia.org/wiki/Nomenklatura,
-- the political establishment holding or controlling both public and private power centers
such as media, finance, academia, culture, trade, industry, state and international institutions.
[As if] protectionist Japan is now backward and poverty stricken; free trade Africa is soaring
on the wings of giant trade deficits :
Economists lead the way in silly beliefs that defy empirical reality and common sense. The most glaring
example of this is the view that free trade is beneficial. All evidence points in the opposite direction,
but no matter - our fake economists are happy to say/believe whatever so long as their foreign government
paymasters and banks write the ten thousand dollar checks for "consulting" and "academic reports".
You are probably wrong. Free trade is a delicate instrument, much like tennis racket. If you hold
it too tightly you can't play well. If you hold it too loose you can't play well either.
Neoliberals promote "free trade" (note "free" not "fair") as the universal cure for all nations
problems in all circumstances. This is a typical neoliberal Three-card Monte.
The real effect in many cases is opening market for transnationals who dictate nations the
rules of the game and loot the country.
But isolationism has its own perils. So some middle ground should be fought against excessive
demands of neoliberal institutions like IMF and World Bank. For example, any country that take
loans from them (usually on pretty harsh conditions; with string attached), has a great danger
that money will be looted via local fifth column. And will return in no time back into Western Banks
leaving the country in the role of the debt slave.
The latter is the preferred role neoliberals want to see each and every third world country
(and not only third world countries -- see Greece and Cyprus). Essentially in their "secret" book
this is the role those counties should be driven into.
Recent looting of Ukraine is the textbook example of this process. The majority of population
now will live on less then $2 a day for many, many years.
At the same time, balancing free trade and isolationism is tricky process also. Because at some
point, the subversion starts and three letter agencies come into the play. You risk getting color
revolution as a free present for your refusal to play the game.
Neoliberals usually do not take NO for the answer.
That's when the word "neoliberal" becomes yet another dirty word.
Did William Casey (CIA
Director) really say, "We'll know
our disinformation program is
complete when everything the
American public believes is
false."?
Americans are also led to believe a lot of crazy, wrong
things, such as Saddam had WMDs, or Iran had a nuclear
weapons program, to cite only the most outrageous lies
dutifully propagated by the mainstream media.
Before
Catherine Rampell criticizes ordinary Americans, she should
have the Washington Post engage in a little serious
introspection and self-criticism...
The media should certainly shoulder some blame for parroting
militarist propaganda but ordinary USAnians who continue to
reward these scoundrels with their votes. And with Trump
ordinary USAnians appear to have elected someone even more
willing to shamelessly lie and loot than his predecessors.
It is time for ordinary USAnians to engage in a lot of
serious introspection and self-criticism. I doubt this will
happen until it's too late. (Very thankful that I am not tied
to this nation!)
"... "Fake news was a term specifically about people who purposely fabricated stories for clicks and revenue," said David Mikkelson, the founder of Snopes, the myth-busting website. "Now it includes bad reporting, slanted journalism and outright propaganda. And I think we're doing a disservice to lump all those things together." ..."
"... "What I think is so unsettling about the fake news cries now is that their audience has already sort of bought into this idea that journalism has no credibility or legitimacy," ..."
"... The market in these divided times is undeniably ripe. "We now live in this fragmented media world where you can block people you disagree with. You can only be exposed to stories that make you feel good about what you want to believe," Mr. Ziegler, the radio host, said. "Unfortunately, the truth is unpopular a lot. And a good fairy tale beats a harsh truth every time." ..."
.... As reporters were walking out of a Trump rally this month in Orlando, Fla., a man heckled them with shouts of "Fake news!"
Until now, that term had been widely understood to refer to fabricated news accounts that are meant to spread virally online.
But conservative cable and radio personalities, top Republicans and even Mr. Trump himself, incredulous about suggestions that fake
stories may have helped swing the election, have appropriated the term and turned it against any news they see as hostile to their
agenda.
In defining "fake news" so broadly and seeking to dilute its meaning, they are capitalizing on the declining credibility of all
purveyors of information, one product of the country's increasing political polarization. And conservatives, seeing an opening to
undermine the mainstream media, a longtime foe, are more than happy to dig the hole deeper.
"Over the years, we've effectively brainwashed the core of our audience to distrust anything that they disagree with. And now
it's gone too far," said John Ziegler, a conservative radio host, who has been critical of what he sees as excessive partisanship
by pundits. "Because the gatekeepers have lost all credibility in the minds of consumers, I don't see how you reverse it."
Journalists who work to separate fact from fiction see a dangerous conflation of stories that turn out to be wrong because of
a legitimate misunderstanding with those whose clear intention is to deceive. A report, shared more than a million times on social
media, that the pope had endorsed Mr. Trump was undeniably false. But was it "fake news" to report on data models that showed Hillary
Clinton with overwhelming odds of winning the presidency? Are opinion articles fake if they cherry-pick facts to draw disputable
conclusions?
"Fake news was a term specifically about people who purposely fabricated stories for clicks and revenue," said David Mikkelson,
the founder of Snopes, the myth-busting website. "Now it includes bad reporting, slanted journalism and outright propaganda. And
I think we're doing a disservice to lump all those things together."
The right's labeling of "fake news" evokes one of the most successful efforts by conservatives to reorient how Americans think
about news media objectivity: the move by Fox News to brand its conservative-slanted coverage as "fair and balanced." Traditionally,
mainstream media outlets had thought of their own approach in those terms, viewing their coverage as strictly down the middle. Republicans
often found that laughable. As with Fox's ubiquitous promotion of its slogan, conservatives' appropriation of the "fake news" label
is an effort to further erode the mainstream media's claim to be a reliable and accurate source.
"What I think is so unsettling about the fake news cries now is that their audience has already sort of bought into this idea
that journalism has no credibility or legitimacy," said Angelo Carusone, the president of Media Matters, a liberal group that
polices the news media for bias. "Therefore, by applying that term to credible outlets, it becomes much more believable."
.... ... ...
Mr. Trump has used the term to deny news reports, as he did on Twitter recently after various outlets said he would stay on as
the executive producer of "The New Celebrity Apprentice" after taking office in January. "Ridiculous & untrue - FAKE NEWS!" he wrote.
(He will be credited as executive producer, a spokesman for the show's creator, Mark Burnett, has said. But it is unclear what work,
if any, he will do on the show.)
Many conservatives are pushing back at the outrage over fake news because they believe that liberals, unwilling to accept Mr.
Trump's victory, are attributing his triumph to nefarious external factors.
"The left refuses to admit that the fundamental problem isn't the Russians or Jim Comey or 'fake news' or the Electoral College,"
said Laura Ingraham, the author and radio host. "'Fake news' is just another fake excuse for their failed agenda."
Others see a larger effort to slander the basic journalistic function of fact-checking. Nonpartisan websites like Snopes and Factcheck.org
have found themselves maligned when they have disproved stories that had been flattering to conservatives.
When Snopes wrote about a State Farm insurance agent in Louisiana who had posted a sign outside his office that likened taxpayers
who voted for President Obama to chickens supporting Colonel Sanders, Mr. Mikkelson, the site's founder, was smeared as a partisan
Democrat who had never bothered to reach out to the agent for comment. Neither is true.
"They're trying to float anything they can find out there to discredit fact-checking," he said.
There are already efforts by highly partisan conservatives to claim that their fact-checking efforts are the same as those of
independent outlets like Snopes, which employ research teams to dig into seemingly dubious claims.
Sean Hannity, the Fox News host, has aired "fact-checking" segments on his program. Michelle Malkin, the conservative columnist,
has a web program, "Michelle Malkin Investigates," in which she conducts her own investigative reporting.
The market in these divided times is undeniably ripe. "We now live in this fragmented media world where you can block people
you disagree with. You can only be exposed to stories that make you feel good about what you want to believe," Mr. Ziegler, the radio
host, said. "Unfortunately, the truth is unpopular a lot. And a good fairy tale beats a harsh truth every time."
(Does this have something to do
with Jon Stewart's retirement &
Stephen Colbert 'going legit'?)
Wielding Claims of 'Fake News,' Conservatives
Take Aim at Mainstream Media http://nyti.ms/2iuFxRx
NYT - JEREMY W. PETERS - December 25, 2016
WASHINGTON - The CIA, the F.B.I. and the White House may all agree that Russia was behind
the hacking that interfered with the election. But that was of no import to the website Breitbart
News, which dismissed reports on the intelligence assessment as "left-wing fake news."
Rush Limbaugh has diagnosed a more fundamental problem. "The fake news is the everyday news"
in the mainstream media, he said on his radio show recently. "They just make it up."
Some supporters of President-elect Donald J. Trump have also taken up the call. As reporters
were walking out of a Trump rally this month in Orlando, Fla., a man heckled them with shouts
of "Fake news!"
Until now, that term had been widely understood to refer to fabricated news accounts that are
meant to spread virally online. But conservative cable and radio personalities, top Republicans
and even Mr. Trump himself, incredulous about suggestions that fake stories may have helped swing
the election, have appropriated the term and turned it against any news they see as hostile to
their agenda.
In defining "fake news" so broadly and seeking to dilute its meaning, they are capitalizing
on the declining credibility of all purveyors of information, one product of the country's increasing
political polarization. And conservatives, seeing an opening to undermine the mainstream media,
a longtime foe, are more than happy to dig the hole deeper.
"Over the years, we've effectively brainwashed the core of our audience to distrust anything
that they disagree with. And now it's gone too far," said John Ziegler, a conservative radio host,
who has been critical of what he sees as excessive partisanship by pundits. "Because the gatekeepers
have lost all credibility in the minds of consumers, I don't see how you reverse it."
Journalists who work to separate fact from fiction see a dangerous conflation of stories that
turn out to be wrong because of a legitimate misunderstanding with those whose clear intention
is to deceive. A report, shared more than a million times on social media, that the pope had endorsed
Mr. Trump was undeniably false. But was it "fake news" to report on data models that showed Hillary
Clinton with overwhelming odds of winning the presidency? Are opinion articles fake if they cherry-pick
facts to draw disputable conclusions?
"Fake news was a term specifically about people who purposely fabricated stories for clicks
and revenue," said David Mikkelson, the founder of Snopes, the myth-busting website. "Now it includes
bad reporting, slanted journalism and outright propaganda. And I think we're doing a disservice
to lump all those things together."
The right's labeling of "fake news" evokes one of the most successful efforts by conservatives
to reorient how Americans think about news media objectivity: the move by Fox News to brand its
conservative-slanted coverage as "fair and balanced." Traditionally, mainstream media outlets
had thought of their own approach in those terms, viewing their coverage as strictly down the
middle. Republicans often found that laughable.
As with Fox's ubiquitous promotion of its slogan, conservatives' appropriation of the "fake
news" label is an effort to further erode the mainstream media's claim to be a reliable and accurate
source. ...
Martin Sklar's disaccumultion thesis * is a restatement and reinterpretation of passages in Marx's
Grundrisse that have come to be known as the "fragment on machines." Compare, for example, the following
two key excerpts.
Marx:
...to the degree that large industry develops, the creation of real wealth comes to depend
less on labour time and on the amount of labour employed than on the power of the agencies set
in motion during labour time, whose 'powerful effectiveness' is itself in turn out of all proportion
to the direct labour time spent on their production, but depends rather on the general state of
science and on the progress of technology, or the application of this science to production. ...
Labour no longer appears so much to be included within the production process; rather, the
human being comes to relate more as watchman and regulator to the production process itself. (What
holds for machinery holds likewise for the combination of human activities and the development
of human intercourse.)
Sklar:
In consequence [of the passage from the accumulation phase of capitalism to the "disaccumlation"
phase], and increasingly, human labor (i.e. the exercise of living labor-power) recedes from the
condition of serving as a 'factor' of goods production, and by the same token, the mode of goods-production
progressively undergoes reversion to a condition comparable to a gratuitous 'force of nature':
energy, harnessed and directed through technically sophisticated machinery, produces goods, as
trees produce fruit, without the involvement of, or need for, human labor-time in the immediate
production process itself. Living labor-power in goods-production devolves upon the quantitatively
declining role of watching, regulating, and superintending.
The main difference between the two arguments is that for Marx, the growing contradiction between
the forces of production and the social relations produce "the material conditions to blow this
foundation sky-high." For Sklar, with the benefit of another century of observation, disaccumulation
appears as simply another phase in the evolution of capitalism -- albeit with revolutionary potential.
But also with reactionary potential in that the reduced dependence on labor power also suggests
a reduced vulnerability to the withholding of labor power.
Carnival Corp. told about 200 IT employees that the company was transferring their work to Capgemini,
a large IT outsourcing firm
Notable quotes:
"... Senior IT engineer Matthew Culver told CBS that the requested "knowledge transfer activities" just meant training their own replacements , and "he isn't buying any of it," writes Slashdot reader dcblogs . ..."
"... Foreign workers are willing to do a job at a lower salary in most if not all cases b/c the cost of living in their respective countries is a fraction of ours. ..."
Posted by EditorDavid on Sunday December 25, 2016 @05:05PM from the Bob-Cratchit-vs-Scrooge dept.
ComputerWorld reports:
In early December, Carnival Corp.
told about 200 IT employees that the company was transferring their work to Capgemini, a large
IT outsourcing firm. The employees had a choice: Either agree to take a job with the contractor or
leave without severance. The employees had until the week before Christmas to make a decision about
their future with the cruise line.
By agreeing to a job with Paris-based Capgemini, employees are guaranteed employment for six
months, said Roger Frizzell, a Carnival spokesman.
"Our expectation is that many will continue to work on our account or placed into other open
positions within Capgemini" that go well beyond the six-month period, he said in an email.
Senior IT engineer Matthew Culver told CBS that the requested "knowledge transfer activities"
just meant training their own replacements , and "he isn't buying any of it," writes Slashdot
reader dcblogs . "After receiving
his offer letter from Capgemini, he sent a counteroffer.
It asked for $500,000...and apology letters to all the affected families," signed by the company's
CEO. In addition, the letter also demanded a $100,000 donation to any charity that provides services
to unemployed American workers. "I appreciate your time and attention to this matter, and I sincerely
hope that you can fulfill these terms."
Foreign workers are willing to do a job at a lower salary in most if not all cases b/c
the cost of living in their respective countries is a fraction of ours.
I would be willing to do my job at a fraction of what I am paid currently should that (that
being how expensive it is to live here) change. It is equally infuriating to me when American
companies use loopholes in our ridiculously complicated tax code to shelter revenues in foreign
tax shelters to avoid paying taxes while at the same time benefiting from our infrastructure,
emergency services, military, etc..
Its assholes like you that always spout off about free market this or that, about some companies
fiduciary responsibilities to it's shareholders blah blah blah... as justification for shitty
behavior.
It is equally infuriating to me when American companies use loopholes in our ridiculously
complicated tax code to shelter revenues in foreign tax shelters to avoid paying taxes
So who are you infuriated at? The companies that take advantage of those loopholes, or the
politicians that put them there? Fury doesn't help unless it is properly directed. Does your fury
influence who you vote for?
... while at the same time benefiting from our infrastructure, emergency services, military,
etc.
No. Taxes are only sheltered on income generated overseas, using overseas infrastructure, emergency
services, etc. I am baffled why Americans believe they have a "right" to tax the sale of a product
made in China and sold in France.
I suppose it's related to the idea that intellectual property "rights" granted by a country
of origin should still have the same benefits and drawbacks when transferred to another country.
Or at the very least should be treated as an export at such time a base of operations moves out
of country.
Except that calling, say iOS sales 'generated overseas' when the software was written in the
US, using US infrastructure, etc . And the company is making the bogus claim that their
Irish subsidiary owns the rights to that software. It's a scam - not a loophole.
They are the same thing. The only way to ensure that there are no tax dodges out there is to
simplify the tax code, and eliminate the words: "except", "but", "excluding", "omitting", "minus",
"exempt", "without", and any other words to those same effects.
Americans are too stupid to ever vote for a poltiician that states they will raise taxes. This
means that either politicians lie, or they actively undermine the tax base. Both of those situations
are bad for the majority of americans, but they vote for the same scumbags over and over, and
will soundly reject any politician who openly advocates tax increases. The result is a race to
the bottom. Welcome to reaping what you sow, brought to you by Democracy(tm).
Except that calling, say iOS sales 'generated overseas' when the software was written
in the US, using US infrastructure, etc .
That makes no sense. Plenty of non-American companies develop software in America. Yet only
if they are incorporated in America do they pay income tax on their overseas earnings, and it
is irrelevant where their engineering and development was done.
It has nothing whatsoever to do with "using infrastructure". It is just an extraterritorial
money grab that is almost certainly counterproductive since it incentivizes American companies
to invest and create jobs overseas.
Yes, taxes are based on profits. So Google, for instance, makes a bunch of money in the US.
Their Irish branch then charges about that much for "consulting" leaving the American part with
little to no profits to tax.
"I am baffled why Americans believe they have a "right" to tax the sale of a product made in
China and sold in France."
Because the manufacturing and sales are controlled by a US based company, as is the profit
benefit which results. If a US entity, which receives the benefits of US law, makes a profit by
any means, why should it not be taxed by the US?
"... Rich individuals (who are willing to be interviewed) also express concern about inequality but generally oppose using higher taxes on the rich to fight it. Scheiber is very willing to bluntly state his guess (and everyone's) that candidates are eager to please the rich, because they spend much of their time begging the rich for contributions. ..."
"... Of course another way to reduce inequality is to raise wages. Buried way down around paragraph 9 I found this gem: "Forty percent of the wealthy, versus 78 percent of the public, said the government should make the minimum wage "high enough so that no family with a full-time worker falls below the official poverty line." ..."
"... The current foundational rules embedded in tax law, intellectual property law, corporate construction law, and other elements of our legal and regulatory system result in distributions that favor those with capital or in a position to seek rents. This isn't a situation that calls for a Robin Hood who takes from the rich and gives to the poor. It is more a question of how elites have rigged the system to work primarily for them. ..."
"... the problem is incomes and demand, and the first and best answer for creating demand for workers and higher wages to compete for those workers is full employment. ..."
"... if you are proposing raising taxes on the rich SO THAT you can cut taxes on the non rich you are simply proposing theft. ..."
"... what we are looking at here is simple old fashioned greed just as stupid and ugly among the "non rich" as it is among the rich. ..."
"... you play into the hands of the Petersons who want to "cut taxes" and leave the poor elderly to die on the streets, and the poor non-elderly to spend their lives in anxiety and fear-driven greed trying to provide against desperate poverty in old age absent any reliable security for their savings.) ..."
"... made by the ayn rand faithful. it is wearisome. ..."
"... The only cure for organized greed is organized labor. ..."
"... A typical voice of American politics is the avoidance of saying anything real on real issues" ..."
The content should be familiar to AngryBear
readers. A majority of Americans are alarmed by high and increasing inequality and support government
action to reduce inequality. However, none of the important 2016 candidates has expressed any willingness
to raise taxes on the rich. The Republicans want to cut them and Clinton (and a spokesperson) dodge
the question.
Rich individuals (who are willing to be interviewed) also express concern about inequality but
generally oppose using higher taxes on the rich to fight it. Scheiber is very willing to bluntly
state his guess (and everyone's) that candidates are eager to please the rich, because they spend
much of their time begging the rich for contributions.
No suprise to anyone who has been paying attention except for the fact that it is on the front
page of www.nytimes.com and the article is printed in the business section not the opinion section.
Do click the link - it is brief, to the point, solid, alarming and a must read.
I clicked one of the links and found weaker evidence than I expected for Scheiber's view (which
of course I share
"By contrast, more than half of Americans and three-quarters of Democrats believe the "government
should redistribute wealth by heavy taxes on the rich," according to a
Gallup poll of about 1,000 adults in April 2013."
It is a small majority 52% favor and 47% oppose. This 52 % is noticeably smaller than the solid
majorities who have been telling Gallup that high income individuals pay less than their fair share
of taxes (click and search
for Gallup on the page).
I guess this isn't really surprising - the word "heavy" is heavy maaaan and "redistribute" evokes
the dreaded welfare (and conservatives have devoted gigantic effort to giving it pejorative connotations).
The 52% majority is remarkable given the phrasing of the question. But it isn't enough to win elections,
since it is 52% of adults which corresponds to well under 52% of actual voters.
My reading is that it is important for egalitarians to stress the tax cuts for the non rich and
that higher taxes on the rich are, unfortunately, necessary if we are to have lower taxes on the
non rich without huge budget deficits. This is exactly Obama's approach.
Comments (87)
Jerry Critter
March 29, 2015 10:40 pm
Get rid of tax breaks that only the wealthy can take advantage of and perhaps everyone will
pay their fair share. The same goes for corporations.
amateur socialist
March 30, 2015 11:42 am
Of course another way to reduce inequality is to raise wages. Buried way down around paragraph
9 I found this gem: "Forty percent of the wealthy, versus 78 percent of the public, said the government
should make the minimum wage "high enough so that no family with a full-time worker falls below
the official poverty line."
I'm fine with raising people's taxes by increasing their wages. A story I heard on NPR recently
indicated that a single person needs to make about $17-19 an hour to cover most basic necessities
nowadays (the story went on to say that most people in that situation are working 2 or more jobs
to get enough income, a "solution" that creates more problems with health/stress etc.). A full
time worker supporting kids needs more than $20.
You double the minimum wage and strengthen people's rights to organize union representation.
Tax revenues go up (including SS contributions btw) and we add significant growth to the economy
with the increased purchasing power of workers. People can go back to working 40-50 hours a week
and cut back on moonlighting which creates new job opportunities for the younger folks decimated
by this so called recovery.
Win Win Win Win. And the poor overburdened millionaires don't have to have their poor tax fee
fees hurt.
Mark Jamison, March 30, 2015 8:09 pm
How about if we get rid of the "re" and call it what it is "distribution". The current
foundational rules embedded in tax law, intellectual property law, corporate construction law,
and other elements of our legal and regulatory system result in distributions that favor those
with capital or in a position to seek rents.
This isn't a situation that calls for a Robin Hood who takes from the rich and gives to the
poor. It is more a question of how elites have rigged the system to work primarily for them.
Democrats cede the rhetoric to the Right when they allow the discussion to be about redistribution.
Even talk of inequality without reference to the basic legal constructs that are rigged to create
slanted outcomes tend to accepted premises that are in and of themselves false.
The issue shouldn't be rejiggering things after the the initial distribution but creating a
system with basic rules that level the opportunity playing field.
coberly, March 30, 2015 11:03 pm
Thank You Mark Jamison!
An elegant, informed writer who says it better than I can.
But here is how I would say it:
Addressing "inequality" by "tax the rich" is the wrong answer and a political loser.
Address inequality by re-criminalizing the criminal practices of the criminal rich. Address
inequality by creating well paying jobs with government jobs if necessary (and there is necessary
work to be done by the government), with government protection for unions, with government policies
that make it less profitable to off shore
etc. the direction to take is to make the economy more fair . actually more "free" though you'll
never get the free enterprise fundamentalists to admit that's what it is. You WILL get the honest
rich on your side. They don't like being robbed any more than you do.
But you will not, in America, get even poor people to vote to "take from the rich to give to
the poor." It has something to do with the "story" Americans have been telling themselves since
1776. A story heard round the world.
That said, there is nothing wrong with raising taxes on the rich to pay for the government
THEY need as well as you. But don't raise taxes to give the money to the poor. They won't do it,
and even the poor don't want it except as a last resort, which we hope we are not at yet.
urban legend, March 31, 2015 2:07 am
Coberly, you are dead-on. Right now, taxation is the least issue. Listen to Jared Bernstein
and Dean Baker: the problem is incomes and demand, and the first and best answer for creating
demand for workers and higher wages to compete for those workers is full employment. Minimum
wage will help at the margins to push incomes up, and it's the easiest initial legislative sell,
but the public will support policies - mainly big-big infrastructure modernization in a country
that has neglected its infrastructure for a generation - that signal a firm commitment to full
employment.
It's laying right there for the Democrats to pick it up. Will they? Having policies that are
traditional Democratic policies will not do the job. For believability - for convincing voters
they actually have a handle on what has been wrong and how to fix it - they need to have a story
for why we have seem unable to generate enough jobs for over a decade. The neglect of infrastructure
- the unfilled millions of jobs that should have gone to keeping it up to date and up to major-country
standards - should be a big part of that story. Trade and manufacturing, to be sure, is the other
big element that will connect with voters. Many Democrats (including you know who) are severely
compromised on trade, but they need to find a way to come own on the right side with the voters.
coberly, March 31, 2015 10:52 am
Robert
i wish you'd give some thought to the other comments on this post.
if you are proposing raising taxes on the rich SO THAT you can cut taxes on the non
rich you are simply proposing theft. if you were proposing raising taxes on the rich to provide
reasonable welfare to those who need it you would be asking the rich to contribute to the strength
of their own country and ultimately their own wealth.
i hope you can see the difference.
it is especially irritating to me because many of the "non rich" who want their taxes cut make
more than twice as much as i do. what we are looking at here is simple old fashioned greed
just as stupid and ugly among the "non rich" as it is among the rich.
"the poor" in this country do not pay a significant amount of taxes (Social Security and Medicare
are not "taxes," merely an efficient way for us to pay for our own direct needs . as long as you
call them taxes you play into the hands of the Petersons who want to "cut taxes" and leave
the poor elderly to die on the streets, and the poor non-elderly to spend their lives in anxiety
and fear-driven greed trying to provide against desperate poverty in old age absent any reliable
security for their savings.)
Kai-HK, April 4, 2015 12:23 am
coberly,
Thanks for your well-reasoned response.
You state, 'i personally am not much interested in the "poor capitalist will flee the country
if you tax him too much." in fact i'd say good riddance, and by the way watch out for that tarriff
when you try to sell your stuff here.'
(a) What happens after thy leave? Sure you can get one-time 'exit tax' but you lose all the
intellectual capital (think of Bill Gates, Warren Buffet, or Steve Jobs leaving and taking their
intellectual property and human capital with them). These guys are great jobs creators it will
not only be the 'bad capitalists' that leave but also many of the 'job creating' good ones.
(b) I am less worried about existing job creating capitalists in America; what about the future
ones? The ones that either flee overseas and make their wealth there or are already overseas and
then have a plethora of places they can invest but why bother investing in the US if all they
are going to do is call me a predator and then seize my assets and or penalise me for investing
there? Right? It is the future investment that gets impacted not current wealth per se.
You also make a great point, 'the poor are in the worst position with respect to shifting their
tax burden on to others. the rich do it as a matter of course. it would be simpler just to tax
the rich there are fewer of them, and they know what is at stake, and they can afford accountants.
the rest of us would pay our "taxes" in the form of higher prices for what we buy.'
Investment capital will go where it is best treated and to attract investment capital a market
must provide a competitive return (profit margin or return on investment). Those companies and
investment that stay will do so because they are able to maintain that margin .and they will do
so by either reducing wages or increasing prices. Where they can do neither, their will exit the
market.
That is why, according to research, a bulk of the corporate taxation falls on workers and consumers
as a pass-on effect. The optimum corporate tax is 0. This will be the case as taxation increases
on the owners of businesses and capital .workers, the middle class, and the poor pay it. The margins
stay competitive for the owners of capital since capital is highly mobile and fungible.Workers
and the poor less so.
But thanks again for the tone and content of your response. I often get attacked personally
for my views instead of people focusing on the issue. I appreciate the respite.
K
coberly, April 4, 2015 12:34 pm
kai
yes, but you missed the point.
i am sick of the whining about taxes. it takes so much money to run the country (including
the kind of pernicious poverty that will turn the US into sub-saharan africa. and then who will
buy their products.
i can't do much about the poor whining about taxes. they are just people with limited understanding,
except for their own pressing needs. the rich know what the taxes are needed for, they are just
stupid about paying them. of course they would pass the taxes through to their customers. the
customers would still buy what they need/want at the new price. leaving everyone pretty much where
they are today financially. but the rich would be forced to be grownup about "paying" the taxes,
and maybe the politics of "don't tax me tax the other guy" would go away.
as for the sainted bill gates. there are plenty of other people in this country as smart as
he is and would be happy to sell us computer operating systems and pay the taxes on their billion
dollars a year profits.
nothing breaks my heart more than a whining millionaire.
Kai-HK
April 4, 2015 11:32 pm
Sure I got YOUR point, it just didn't address MY points as put forth in MY original post. And
it still doesn't.
More importantly, you have failed to defend YOUR point against even a rudimentary challenge.
K
coberly, April 5, 2015 12:45 pm
kai,
rudimentary is right.
i have read your "points" about sixteen hundred times in the last year alone. made by the
ayn rand faithful. it is wearisome.
and i have learned there is no point in trying to talk to true believers.
William Ryan, May 13, 2015 4:43 pm
Thanks again Coberly for your and K's very thoughtful insight. You guys really made me think
hard today and I do see your points about perverted capitalism being a big problem in US. I still
do like the progressive tax structure and balanced trade agenda better.
I realize as you say that we cannot compare US to Hong Kong just on size and scale alone. Without
all the obfuscation going Lean by building cultures that makes people want to take ownership and
sharing learning and growing together is a big part of the solution Ford once said "you cannot
learn in school what the world is going to do next".
Also never argue with an idiot. They will bring you down to their level then beat you with
experience. The only cure for organized greed is organized labor. It's because no matter
what they do nothing get done about it. With all this manure around there must be a pony somewhere!
"
A typical voice of American politics is the avoidance of saying anything real on real
issues". FDR.
Rich people pay rich people to tell middle class people to blame poor people
Earth doesn't matter, people don't matter, even economy doesn't matter . The only thing
that matters is R.W. nut bar total ownership of everything.
I'm sorry I put profits ahead of people, greed above need and the rule of gold above God's
golden rules.
I try to stay away from negative people who have a problem for every solution
We need capitalism that is based on justice and greater corporate responsibility. I do
not speak nor do I comprehend assholian.
"If you don't change direction , you may end up where you are headed". Lao-Tzu.
"The true strength of our nation comes not from our arm or wealth but from our ideas".
Obama..
Last one.
"If the soul is left to darkness, sins will be committed. The guilty one is not the one
who commits the sins, but the one who caused the darkness". Victor Hugo.
coberly , May 16, 2015 9:57 pm
kai
as a matter of fact i disagree with the current "equality" fad at least insofar as it implies
taking from the rich and giving to the poor directly.
i don't believe people are "equal" in terms of their economic potential. i do beleive they
are equal in terms of being due the respect of human beings.
i also believe your simple view of "equality" is a closet way of guarantee that the rich can
prey upon the poor without interruption.
humans made their first big step in evolution when they learned to cooperate with each other
against the big predators.
Jerry Critter, May 17, 2015 12:10 am
it is mildly progressive up to about $75,000 per year where the rate hits 30%. But from there
up to $1.542 million the rate only increases to 33.3%.
I call that very flat!
Jerry Critter, May 17, 2015 11:20 am
"i assume there are people in this country who are truly poor. as far as i know they
don't pay taxes."
Read my reference and you will see that the "poor" indeed pay taxes, just not much income tax
because they don't have much income. You are fixated on income when we should be considering all
forms of taxation.
Jerry Critter, May 17, 2015 9:25 pm
Oh Kai, cut the crap. Paying taxes Is nothing like slavery. My oh my, how did we ever survive
with a top tax rate of around 90%, nearly 3 times the current rate? Some people would even say
that the economy then was pretty great and the middle class was doing terrific. So stop the deflection
and redirection. I think you just like to see how many words you can write. Sorry, but history
is not on your side.
Bottom line: Trump's Santa Rally could turn into a stock market bloodbath
unless he's able to deliver on his promises, which doesn't look very likely.
Check this out from Bloomberg:
"President-elect Donald Trump's race to enact the biggest tax cuts since
the 1980s went under a caution flag Monday as Senate Majority Leader Mitch
McConnell warned he considers current levels of U.S. debt "dangerous" and
said he wants any tax overhaul to avoid adding to the deficit.
"I think this level of national debt is dangerous and unacceptable,"
McConnell said, adding he hopes Congress doesn't lose sight of that when it
acts next year. "My preference on tax reform is that it be revenue neutral,"
he said
The Committee for a Responsible Federal Budget, a nonpartisan think tank,
has projected that Trump's plans would increase the debt by $5.3 trillion
over a decade, with deficits already over $600 billion a year and rising on
autopilot
What I hope we will clearly avoid, and I'm confident we will, is a
trillion-dollar stimulus," he said. "Take you back to 2009. We borrowed $1
trillion and nobody could find that it did much of anything. So we need to
do this carefully and correctly and the issue of how to pay for it needs to
be dealt with responsibly." (
McConnell,
Warning of 'Dangerous' Debt, Wants Tax Cut Offsets
, Bloomberg)
It doesn't sound like McConnell is a big fan of Trump's economic plan, does
it? So why has the Dow risen to within 26 points of the 20,000-mark if that's
the case?? Do investors think that Trump can simply issue an executive order
and force Congress to do what he wants?
Good luck with that. The deficit-crazed Republicans are just as committed to
austerity as ever, mainly because slashing government spending coupled with low
interest rates is a tried-and-true method of transferring obscene amounts of
money to the 1 percenters. Why would they tinker with a mechanism that works
perfectly already?
They won't, at least not to the extent that it'll have any meaningful impact
on the living standards of millions of working people across America. Congress
is going to prevent that at all cost. And so will the Fed. Just listen to what
Yellen had to say to a journalist from the Washington Post last week following
the FOMC meeting. She was asked point-blank whether she thought the economy
needed more fiscal stimulus or not. Her answer:
"Well I called for fiscal stimulus when the unemployment rate was
substantially higher than it is now. So with a 4.6 percent unemployment, and
a solid labor market, there may be some additional slack in labor markets,
but I would judge that the degree of slack has diminished, So I would say
at this point that fiscal policy is not obviously needed to help us get back
to full employment
But nevertheless, let me be careful that I am not
trying to provide advice to the new administration or to Congress as to what
is the appropriate stance of policy."
Nice, eh? Yellen threatens Trump with three more rate hikes in 2017,
torpedoes his $1 trillion infrastructure plan with a wave of the hand, and then
has the audacity to deny that she's dictating policy.
Of course she's dictating policy. What else would you call it?
Yellen is saying as clearly as possible, that if Trump launches his fiscal
spending plan, the Fed's going to slap him down by raising rates. If that's not
a threat, then what is??
Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel Zucman
Abstract
This paper combines tax, survey, and national accounts data to estimate the distribution of national
income in the United States since 1913. Our distributional national accounts capture 100% of national
income, allowing us to compute growth rates for each quantile of the income distribution consistent
with macroeconomic growth. We estimate the distribution of both pre-tax and post-tax income, making
it possible to provide a comprehensive view of how government redistribution affects inequality.
Average pre-tax national income per adult has increased 60% since 1980, but we find that it
has stagnated for the bottom 50% of the distribution at about $16,000 a year.
The pre-tax income of the middle class-adults between the median and the 90th percentile-has
grown 40% since 1980, faster than what tax and survey data suggest, due in particular to the rise
of tax-exempt fringe benefits.
Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than
bottom 50% adults, while they earn 81 times more today.
The upsurge of top incomes was first a labor income phenomenon but has mostly been a capital
income phenomenon since 2000.
The government has offset only a small fraction of the increase in inequality. The reduction of
the gender gap in earnings has mitigated the increase in inequality among adults. The share of women,
however, falls steeply as one moves up the labor income distribution, and is only 11% in the top
0.1% today.
Distributional National Accounts: Methods and Estimates for the United States
By Thomas Piketty, Emmanuel Saez, and Gabriel Zucman
Introduction Income inequality has increased in many developed countries over the last
several decades. This trend has attracted considerable interest among academics, policy-makers,
and the general public. In recent years, following up on Kuznets' (1953) pioneering attempt,
a number of authors have used administrative tax records to construct long-run series of
top income shares (Alvaredo et al., 2011-2016). Yet despite this endeavor, we still face
three important limitations when measuring income inequality. First and most important,
there is a large gap between national accounts-which focus on macro totals and growth-and
inequality studies-which focus on distributions using survey and tax data, usually without
trying to be fully consistent with macro totals. This gap makes it hard to address questions
such as: What fraction of economic growth accrues to the bottom 50%, the middle 40%, and
the top 10% of the distribution? How much of the rise in income inequality owes to changes
in the share of labor and capital in national income, and how much to changes in the dispersion
of labor earnings, capital ownership, and returns to capital? Second, about a third of U.S.
national income is redistributed through taxes, transfers, and public good spending. Yet
we do not have a good measure of how the distribution of pre-tax income differs from the
distribution of post-tax income, making it hard to assess how government redistribution
affects inequality. Third, existing income inequality statistics use the tax unit or the
household as unit of observation, adding up the income of men and women. As a result, we
do not have a clear view of how long-run trends in income concentration are shaped by the
major changes in women labor force participation-and gender inequality generally-that have
occurred over the last century.
This paper attempts to compute inequality statistics for the United States that overcome
the limits of existing series by creating distributional national accounts. We combine tax,
survey, and national accounts data to build new series on the distribution of national income
since 1913. In contrast to previous attempts that capture less than 60% of US national income-
such as Census bureau estimates (US Census Bureau 2016) and top income shares (Piketty and
Saez, 2003)-our estimates capture 100% of the national income recorded in the national accounts.
This enables us to provide decompositions of growth by income groups consistent with macroeconomic
growth. We compute the distribution of both pre-tax and post-tax income. Post-tax series
deduct all taxes and add back all transfers and public spending, so that both pre-tax and
post-tax incomes add up to national income. This allows us to provide the first comprehensive
view of how government redistribution affects inequality. Our benchmark series uses the
adult individual as the unit of observation and splits income equally among spouses. We
also report series in which each spouse is assigned her or his own labor income, enabling
us to study how long-run changes in gender inequality shape the distribution of income.
Distributional national accounts provide information on the dynamic of income across
the entire spectrum-from the bottom decile to the top 0.001%-that, we believe, is more accurate
than existing inequality data. Our estimates capture employee fringe benefits, a growing
source of income for the middle-class that is overlooked by both Census bureau estimates
and tax data. They capture all capital income, which is large-about 30% of total national
income- and concentrated, yet is very imperfectly covered by surveys-due to small sample
and top coding issues-and by tax data-as a large fraction of capital income goes to pension
funds and is retained in corporations. They make it possible to produce long-run inequality
statistics that control for socio-demographic changes-such as the rise in the fraction of
retired individuals and the decline in household size-contrary to the currently available
tax-based series.
Methodologically, our contribution is to construct micro-files of pre-tax and post-tax
income consistent with macro aggregates. These micro-files contain all the variables of
the national accounts and synthetic individual observations that we obtain by statistically
matching tax and survey data and making explicit assumptions about the distribution of income
categories for which there is no directly available source of information. By construction,
the totals in these micro-files add up to the national accounts totals, while the distributions
are consistent with those seen in tax and survey data. These files can be used to compute
a wide array of distributional statistics-labor and capital income earned, taxes paid, transfers
received, wealth owned, etc.-by age groups, gender, and marital status. Our objective, in
the years ahead, is to construct similar micro-files in as many countries as possible in
order to better compare inequality across countries. Just like we use GDP or national income
to compare the macroeconomic performances of countries today, so could distributional national
accounts be used to compare inequality across countries tomorrow.
We stress at the outset that there are numerous data issues involved in distributing
national income, discussed in the text and the online appendix. First, we take the national
accounts as a given starting point, although we are well aware that the national accounts
themselves are imperfect (e.g., Zucman 2013). They are, however, the most reasonable starting
point, because they aggregate all the available information from surveys, tax data, corporate
income statements, and balance sheets, etc., in an standardized, internationally-agreed-upon
and regularly improved upon accounting framework. Second, imputing all national income,
taxes, transfers, and public goods spending requires making assumptions on a number of complex
issues, such as the economic incidence of taxes and who benefits from government spending.
Our goal is not to provide definitive answers to these questions, but rather to be comprehensive,
consistent, and explicit about what assumptions we are making and why. We view our paper
as attempting to construct prototype distributional national accounts, a prototype that
could be improved upon as more data become available, new knowledge emerges on who pays
taxes and benefits from government spending, and refined estimation techniques are developed-just
as today's national accounts are regularly improved....
Low oil prices and an increasingly
costly war in Yemen have torn a yawning hole in the Saudi budget and created a crisis that has led
to cuts in public spending, reductions in take-home pay and benefits for government workers and a
host of new fees and fines. Huge subsidies for fuel, water and electricity that encourage
overconsumption are being curtailed. ...
I wonder what facts you have to label Trump's team "globalist shills".
Robert W. Merry in his National Interest article disagrees with you
http://nationalinterest.org/feature/trump-vs-hillary-nationalism-vs-globalism-2016-16041
=== start of the quote ===
Globalists captured much of American society long ago by capturing the bulk of the nation's elite
institutions -- the media, academia, big corporations, big finance, Hollywood, think tanks, NGOs,
charitable foundations. So powerful are these institutions -- in themselves and, even more so,
collectively -- that the elites running them thought that their political victories were complete
and final. That's why we have witnessed in recent years a quantum expansion of social and political
arrogance on the part of these high-flyers.
Then along comes Donald Trump and upends the whole thing. Just about every major issue that this
super-rich political neophyte has thrown at the elites turns out to be anti-globalist and pro-nationalist.
And that is the single most significant factor in his unprecedented and totally unanticipated
rise. Consider some examples:
Immigration: Nationalists believe that any true nation must have clearly delineated and protected
borders, otherwise it isn't really a nation. They also believe that their nation's cultural heritage
is sacred and needs to be protected, whereas mass immigration from far-flung lands could undermine
the national commitment to that heritage.
Globalists don't care about borders. They believe the nation-state is obsolete, a relic of
the 1648 Peace of Westphalia, which codified the recognition of co-existing nation states.
Globalists reject Westphalia in favor of an integrated world with information, money, goods
and people traversing the globe at accelerating speeds without much regard to traditional concepts
of nationhood or borders.
=== end of the quote ===
I wonder how "globalist shills" mantra correlates with the following Trump's statements:
=== start of quote ===
"Globalization has made the financial elite who donate to politicians very, very wealthy ... but
it has left millions of our workers with nothing but poverty and heartache," Trump told supporters
during a prepared speech targeting free trade in a nearly-shuttered former steel town in Pennsylvania.
In a speech devoted to what he called "How To Make America Wealthy Again," Trump offered a
series of familiar plans designed to deal with what he called [Obama] "failed trade policies"
- including rejection of the proposed Trans-Pacific Partnership (TPP) with Pacific Rim nations
and re-negotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico,
withdrawing from it if necessary.
The presumptive Republican presidential nominee also said he would pursue bilateral trade agreements
rather than multi-national deals like TPP and NAFTA.
In addition to appointing better trade negotiators and stepping up punishment of countries
that violate trade rules, Trump's plans would also target one specific economic competitor: China.
He vowed to label China a currency manipulator, bring it before the World Trade Organization and
consider slapping tariffs on Chinese imports coming into the U.S.
Market capitalism has certainly had a rough five years. Remember the
Washington Consensus
? That was the to-do list of 10 economic policies designed to Americanize emerging markets back
in the 1990s. The U.S. government and international financial institutions urged countries to impose
fiscal discipline and reduce or eliminate budget deficits, broaden the tax base and lower tax rates,
allow the market to set interest and exchange rates, and liberalize trade and capital flows. When
Asian economies were hit by the 1997-1998 financial crisis, American critics were quick to bemoan
the defects of "crony capitalism" in the region, and they appeared to have economic history on their
side.
Yet today, in the aftermath of the biggest U.S. financial crisis since the Great Depression, the
world looks very different. Not only did the 2008-2009 meltdown of financial markets seem to expose
the fundamental fragility of the capitalist system, but China's apparent ability to withstand the
reverberations of Wall Street's implosion also suggested the possibility of a new "Beijing Consensus"
based on central planning and state control of volatile market forces.
In his book
The End of the Free Market , the Eurasia Group's Ian Bremmer
argues that authoritarian governments all over the world have "invented something new: state
capitalism":
In this system, governments use various kinds of state-owned companies to manage the exploitation
of resources that they consider the state's crown jewels and to create and maintain large numbers
of jobs.
They use select privately owned companies to dominate certain economic sectors.
They use
so-called sovereign wealth funds to invest their extra cash in ways that maximize the state's profits.
In all three cases, the state is using markets to create wealth that can be directed as political
officials see fit.
And in all three cases, the ultimate motive is not economic (maximizing growth)
but political (maximizing the state's power and the leadership's chances of survival). This
is a form of capitalism but one in which the state acts as the dominant economic player and uses
markets primarily for political gain.
For Bremmer, state capitalism poses a grave "threat" not only to the free market model, but also
to democracy in the developing world.
Although applicable to states all over the globe, at root this is an argument about China. Bremmer
himself writes that "China holds the key." But is it in fact correct to ascribe China's success to
the state rather than the market? The answer depends on where you go in China. In Shanghai or Chongqing,
for example, the central government does indeed loom very large. In Wenzhou, by comparison, the economy
is as vigorously entrepreneurial and market-driven as anywhere I have ever been.
True, China's economy continues to be managed on the basis of a five-year plan, an authoritarian
tradition that goes all the way back to Josef Stalin. As I write, however, the Chinese authorities
are grappling with a problem that owes more to market forces than to the plan: the aftermath of an
urban real estate bubble caused by the massive 2009-2010 credit expansion. Among China experts, the
hot topic of the moment is the new shadow banking system in cities such as Wenzhou, which last year
enabled developers and investors to carry on building and selling apartment blocks even as the People's
Bank of China sought to restrict lending by raising rates and bank reserve requirements.
Talk to some eminent Chinese economists, and you could be forgiven for concluding that the ultimate
aim of policy is to get rid of state capitalism altogether. "We need to privatize all the state-owned
enterprises," one leading economist told me over dinner in Beijing a year ago. "We even need to privatize
the Great Hall of the People." He also claimed to have said this to President Hu Jintao. "Hu couldn't
tell if I was serious or if I was joking," he told me proudly.
Ultimately, it is an unhelpful oversimplification to divide the world into "market capitalist"
and "state capitalist" camps. The reality is that most countries are arranged along a spectrum where
both the intent and the extent of state intervention in the economy vary. Only extreme libertarians
argue that the state has no role whatsoever to play in the economy. As a devotee of Adam Smith, I
accept without qualification his argument in
The Wealth of Nations that the benefits of free trade and the division of labor will be
enjoyed only in countries with rational laws and institutions. I also agree with Silicon Valley visionary
Peter Thiel that, under the right circumstances (e.g., in time of war), governments are capable of
forcing the direction and pace of technological change: Think the Manhattan Project.
But the question today is not whether the state or the market should be in charge. The real question
is which countries' laws and institutions are best, not only at achieving rapid economic growth but
also, equally importantly, at distributing the fruits of growth in a way that citizens deem to be
just.
Let us begin by asking a simple question that can be answered with empirical data: Where in the
world is the role of the state greatest in economic life, and where is it smallest? The answer lies
in data the IMF publishes
on "general government total expenditure" as a percentage of GDP. At one extreme are countries like
East Timor and Iraq, where government expenditure exceeds GDP; at the other end are countries like
Bangladesh, Guatemala, and Myanmar, where it is an absurdly low share of total output.
Beyond these outliers we have China, whose spending represents 23 percent of GDP, down from around
28 percent three decades ago. By this measure, China ranks 147th out of 183 countries for which data
are available. Germany ranks 24th, with government spending accounting for 48 percent of GDP. The
United States, meanwhile, is 44th with 44 percent of GDP. By this measure, state capitalism is a
European, not an Asian, phenomenon: Austria, Belgium, Denmark, Finland, France, Greece, Hungary,
Italy, the Netherlands, Portugal, and Sweden all have higher government spending relative to GDP
than Germany. The Danish figure is 58 percent, more than twice that of the Chinese.
The results are similar if one focuses on government consumption - the share of GDP accounted
for by government purchases of goods and services, as opposed to transfers or investment. Again,
ignoring the outliers, it is Europe whose states play the biggest role in the economy as buyers:
Denmark (27 percent) is far ahead of Germany (18 percent), while the United States is at 17 percent.
China? 13 percent. For Hong Kong, the figure is 8 percent. For Macao, 7 percent.
Where China does lead the West is in the enormous share of gross fixed capital formation (jargon
for investment in hard assets) accounted for by the public sector. According to
World Bank data,
this amounted to 21 percent of China's GDP in 2008, among the highest figures in the world, reflecting
the still-leading role that government plays in infrastructure investment. The equivalent figures
for developed Western countries are vanishingly small; in the West the state is a spendthrift, not
an investor, borrowing money to pay for goods and services. On the other hand, the public sector's
share of Chinese investment has been falling steeply during the past 10 years. Here too the Chinese
trend is away from state capitalism.
Of course, none of these quantitative measures of the state's role tells us how well government
is actually working. For that we must turn to very different kinds of data. Every year the World
Economic Forum (WEF) publishes a
Global Competitiveness
Index , which assesses countries from all kinds of different angles, including the economic efficiency
of their public-sector institutions. Since the current methodology was adopted in 2004, the United
States' average competitiveness score has fallen from 5.82 to 5.43, one of the steepest declines
among developed economies. China's score, meanwhile, has leapt from 4.29 to 4.90.
Even more fascinating is the WEF's
Executive
Opinion Survey , which produces a significant amount of the data that goes into the Global Competitiveness
Index. The table below selects 15 measures of government efficacy, focusing on aspects of the rule
of law ranging from the protection of private property rights to the policing of corruption and the
control of organized crime. These are appropriate things to measure because, regardless of whether
a state is nominally a market economy or a state-led economy, the quality of its legal institutions
will, in practice, have an impact on the ease with which business can be done.
"... In Bristol County, which includes Fall River, New Bedford, and Taunton, manufacturing employed nearly a quarter of the workforce in 2000; now it provides jobs for only one in 10 workers. ..."
"... Most of the manufacturing jobs lost since 2000 are unlikely to return, economists said. Automation has made manufacturing much more specialized, requiring more education and fewer workers, leaving parts of the country struggling to figure out how to reinvent their economies. ..."
"... "We will probably never have as many manufacturing jobs as we had in 1960," Dunn said. "The question is how do we train workers and provide them opportunities to feel productive. What's clear from the election is an increasing number of people don't have those opportunities or don't feel that those opportunities will be available." ..."
"... Characteristics of people dying by suicide after job loss, financial difficulties and other economic stressors during a period of recession (20102011): A review of coroners׳ records ..."
FALL RIVER - In this struggling industrial city, changes in trade policy are being measured
not only in jobs lost, but also in lives lost - to suicide.
The jobs went first, the result of trade deals that sent them overseas. Once-humming factories
that dressed office workers and soldiers, and made goods to furnish their homes, stand abandoned,
overtaken by weeds and graffiti.
And now there is research on how the US job exodus parallels an increase in suicides. A one percentage
point increase in unemployment correlated with an 11 percent increase in suicides, according to
Peter Schott, a Yale University economist who coauthored the report with Justin Pierce, a researcher
at the Federal Reserve Board.
The research doesn't prove a definitive link between lost jobs and suicide; it simply notes
that as jobs left, suicides rose. Workers who lost their jobs may have been pushed over the edge
and turned to suicide or drug addiction, lacking financial resources or community connections
to get help, the authors suggest.
The research contributes to a growing body of work that shows the dark side of global trade:
the dislocation, anger, and despair in some parts of the country that came with the United States'
easing of trade with China in 2000. The impact of job losses was greatest in places such as Fall
River and other cities in Bristol County, along with rural manufacturing counties in New Hampshire
and Maine, vast stretches of the South, and portions of the Rust Belt.
"There are winners and losers in trade," Schott said. "If you go to these communities, you can
see the disruptions."
The unemployment rate in Fall River remains persistently high and at 5.5 percent in September
was a good two points above the Massachusetts average. Nearly one in three households gets some
sort of public assistance.
Opposition to global trade policies became a rallying cry in Donald Trump's campaign, propelling
him into the White House with strategic wins in the industrial Midwest and the South. Trump has
threatened to impose tariffs on Chinese goods and has bashed recent US trade pacts. ...
... Previous trade deals, including the 1994 North American Free Trade Agreement with Canada and
Mexico, chipped away at US manufacturing towns. But economists say the decision to normalize relations
with China was far more disruptive. Some economists have estimated the United States may have
lost at least 1 million manufacturing jobs from 2000 to 2007 due to freer trade with China.
In Bristol County, which includes Fall River, New Bedford, and Taunton, manufacturing employed
nearly a quarter of the workforce in 2000; now it provides jobs for only one in 10 workers.
Most of the manufacturing jobs lost since 2000 are unlikely to return, economists said.
Automation has made manufacturing much more specialized, requiring more education and fewer workers,
leaving parts of the country struggling to figure out how to reinvent their economies.
"We will probably never have as many manufacturing jobs as we had in 1960," Dunn said.
"The question is how do we train workers and provide them opportunities to feel productive. What's
clear from the election is an increasing number of people don't have those opportunities or don't
feel that those opportunities will be available."
Officials in Fall River and Bristol County said they are trying to provide appropriate training,
including computer programming, a prerequisite for many manufacturing jobs.
They also point out there have been recent victories.
Amazon.com opened a distribution warehouse in Fall River and has been hiring in recent
months to fill 500 jobs.
Companies are eyeing Taunton for its cheaper land, access to highways, and state tax breaks.
Norwood-based Martignetti Cos., among the state's largest wine and spirits distributors,
last year agreed to move its headquarters to a Taunton industrial park.
Mayor Tom Hoye said Taunton has also been more active in recent years, holding community meetings
and expanding social services for residents facing distress and drug addiction.
Despite the hits the city and its residents have taken, there is reason to be optimistic about
the future, he said.
Jobs are returning, and the county's suicide rate dropped from 13 per 100,000 people in 2014
to 12 per 100,000 in 2015.
"We're reinventing ourselves," Hoye said on a recent morning as he sat in an old elementary
school classroom that has served as the temporary mayor's office for several years.
"It's tough to lift yourself out of the hole sometimes. But we're much better off than we were
10 years ago."
'The research doesn't prove a definitive
link between lost jobs and suicide; it
simply notes that as jobs left,
suicides rose.'
Pierce, Justin R., and Peter K. Schott (2016). "Trade Liberalization and Mortality:
Evidence from U.S. Counties," Finance and Economics Discussion Series
2016-094. Washington: Board of Governors of the Federal Reserve System
Characteristics of people dying by suicide after job loss, financial difficulties and other
economic stressors during a period of recession (20102011): A review of coroners׳ records
Caroline Coope, et al
Journal of Affective Disorders
Volume 183, 1 - September 2015
"... I would say both parties are for the rich and both do their best to distract their respective base with talk of abortion or race, while neither would like these red meat distractions disappear by being in any solved. ..."
"... Why do they like these particular distractions? Because the rich don't care about either. ..."
"... Trump broke the mold by talking about jobs in a meaningful way immigration and exporting factories both boost unemployment, suppressing wages while boosting profits; these topics have been forbidden since Ross Perot spoke of millions of jobs going south on account of Nafta, exactly what happened. ..."
"... 8mm official unemployment. 16mm reduced participation since 2005 in 25-54 age group. ..."
"... 24mm total, not counting part timers that want full time and 10mm fewer voted for dems in 2016 than 2008. ..."
"... Exactly the same number that voted for Romney voted for trump, so Hillary lost obamas third term not because of a wave of trump racists but because there was somehow dissatisfaction among former dem voters regarding the great jobs program, low cost healthcare, and prosecution of bankers and other elites that drove the economy off the cliff. Granted, nominating the second most unpopular person in America might not guarantee success ..."
Really? When did they do something that benefitted the poor?
I would say both parties are for the rich and both do their best to distract their respective
base with talk of abortion or race, while neither would like these red meat distractions disappear
by being in any solved.
Why do they like these particular distractions? Because the rich don't care about either.
Trump broke the mold by talking about jobs in a meaningful way immigration and exporting factories
both boost unemployment, suppressing wages while boosting profits; these topics have been forbidden
since Ross Perot spoke of millions of jobs going south on account of Nafta, exactly what happened.
8mm official unemployment. 16mm reduced participation since 2005 in 25-54 age group.
24mm total, not counting part timers that want full time and 10mm fewer voted for dems in 2016
than 2008.
Exactly the same number that voted for Romney voted for trump, so Hillary lost obamas
third term not because of a wave of trump racists but because there was somehow dissatisfaction
among former dem voters regarding the great jobs program, low cost healthcare, and prosecution
of bankers and other elites that drove the economy off the cliff. Granted, nominating the second
most unpopular person in America might not guarantee success
I mis spoke.
Nominating her had risks, but it assured Bernie would not be president, and Bernie was a far greater
risk to bankers and the other dem paymasters than trump. Remember, for them it was existential,
bernie would have jailed bankers. Trump is one of the oligarchs.
With her nom bankers let out a sigh of relief and could thankfully murmur, 'mission accomplished!'
If Sanders had won the Democratic nomination, and he had been "Bobby Kennedy'd", people besides
the conspiracy enthusiasts would have started to notice a pattern. Instead, there are millions
of people who actually believe that Sanders lost the primaries to Clinton fair and square. Some
of us know better. . . .
As for patterns, Trump's nominations for cabinet level offices are showing a pattern: billionaires,
hecto-millionaires, overt vassals of the ultra-rich, and at least one (alleged) criminal: Ryan
Zinke.
True. Because of estate recovery, I am doing without medical "insurance" of any kind. As I
tell Phyllis, if I get anything serious, just put me in my ragged old canvas chair in the back
yard and keep the beer coming until I stop complaining.
This entire Medicade story is curious. I had thought that any self respecting oligarchy would
want reasonably powerful clients to buttress the oligarch's power and influence. Instead, the
Medicade Oligarchy buys into a "power base" of the poor and disenfranchised. The funds for this
complex relationship are supplied, as best as I can discern, by the central government. What will
the Medicade Oligarchs do when the "X" Oligarchs cut off or even just restrict the flow of funds
from the central government?
Not just estate recovery. Loading Medicaid with more claimants, particularly poor, ethnic minority
claimants, was a great way to stress it's gonig to need a neo-liberal cure, if the neo-cons don't
use the opportunity Obama gave them to out right kill it. Medicaid isn't Medicare, and the retired
folks know it. They, the retires, would kill it in a second if they could get an extra $100 per
annum in free drugs.
I'm not too sure about the "Retired" "Poor" divide anymore. The two groups are converging and
merging. Any animus experienced here would be the result of restriction of total benefits available.
In other words, an artificially engineered conflict.
Once the "old folks" realize that they, as a class, are the poor, all bets will be off.
Nor is Medicare Medicare, in the sense of being a fully public program. Medicare Advantage,
Medicare supplemental insurance, and prescription drug insurance are all privatized.
Yes, I had a problem with that phrase, as well; especially as older people (read "retired")
are known to have the highest percentage of actual voters. Assuming that the 90% is an overstatement,
I don't believe it negates the point that all ages and all races can find common ground on certain
issuesMedicare for All being one of those issues. Seniors would definitely get behind an improved
Medicare, just as students, unemployed, working poor, and others would support such a sensible
universal health care program.
They old though retired folks love them some voting. Work or have worked for wages, or had
vital domestic labor supported by a wage earning family member would surely get us over 90 IMO.
(sorry for quibbling Lambert. I think we all get the point. Thanks for the lovely essay)
In my opinion, probably not. The government's 20th century
"growth as a factory" underestimates service sector growth
and our continued share shrink in 20th century industrial
production means our "potential" growth is by this factory
methiod, in decline. If we grow 3% it is a gaudy number by
the government's own statistical backwardness.
To regenerate American factory growth is not possible
right now under a market system. I mean, it simply isn't.
If we tried, we would crater industrial growth as well
with consumption cuts.
likbez -> AngloSaxon...
, -1
Growth of the service sector is also under attack due to
increasing "robotization", replacing salaried workers with
"perma-temps" and underpaid contractors (Uber) as well as
offshoring of help desk and such.
Essentially this is very close to BofA Merrill Lynch price prediction. Does not
promise great profitability for shale ;-).
This price might increase the chance of Seneca Cliff.
And does not save KAS from its huge budget deficit (Platt thinks that they need
at least $85 to balance the budget). Russia probably can balance budget at this
price (anything about $55 average will suit)
In February of this year, when WTI was just over US$31, Brandon Blossman
at Tudor Pickering Holt & Co said he expected oil at US$70 by the end of the
year, and at US$90 by the end of next year, commenting on the Colliers International
Trends 2016 Commercial Real Estate Market Update, as quoted by Houston Agent
Magazine.
Raymond James forecast WTI at US$75 in the first quarter next year and at US$80
in the fourth quarter of 2017.
U.S. Energy Information Administration (EIA) expects Brent Crude prices to average
US$51.66 in 2017, with WTI Crude prices averaging US$50.66 next year.
BofA Merrill Lynch one of the optimistic viewpoints among the investment banks
said in its 2017 Market Outlook that its forecast for WTI Crude is US$59 and
Brent at US$61. BofA Merrill Lynch also factors in a rebound of the U.S. shale
patch in its price projections.
Economist was always adamantly anti-Russian and, especially, anti-Putin. The use of people like
Sergey Guriev (recent emigrant to Paris, who excape to avoid the danger of criminal procecution for skolkovao machinations) is just an icing on the cake.
Notable quotes:
"... During the 2015-16 recession, GDP. fell by more than 4 percent and real incomes declined by 10 percent. That is significant, but much less serious than, say, the 40 percent drop in GDP that Russia experienced during the first half of the 1990s. Despite a dramatic decline in oil prices and the burden of sanctions imposed by Western governments after the Crimea crisis, the Putin administration has managed to avert economic disaster by pursuing competent macroeconomic policies. ..."
"... As the sanctions cut off Russia's access to global financial markets, the government set out to cover the budget deficit by undertaking major austerity measures and tapping its substantial sovereign funds. In early 2014, the Reserve Fund (created to mitigate fiscal shocks caused by drops in oil prices) and the National Welfare Fund (set up to address shortfalls in the pension system) together held the equivalent of 8 percent of GDP. ..."
LONDON - The Russian economy is in trouble - "in tatters," President Obama has said - so why
aren't Russians more upset with their leaders? The country underwent a major recession recently.
The ruble lost half of its value. And yet, according to a leading independent pollster in Russia,
President Vladimir V. Putin's approval ratings have consistently exceeded 80 percent during the
past couple of years.
One reason is that while the Russian economy is struggling, it is not falling apart, and many
Russians remember times when it was in a much worse state. Another, perhaps more important, explanation
is that Mr. Putin has convinced them that it's not the economy, stupid, anymore.
Thanks largely to the government's extensive control over information, Mr. Putin has rewritten
the social contract in Russia. Long based on economic performance, it is now about geopolitical
status. If economic pain is the price Russians have to pay so that Russia can stand up to the
West, so be it.
It wasn't like this in the 1990s and 2000s. Back then the approval ratings of Russian leaders
were closely correlated with economic performance, as the political scientist Daniel Treisman
has demonstrated. When the economy began to recover from the 1998 financial crisis, Mr. Putin's
popularity increased. It dipped when growth stalled. It climbed again in 2005, after the global
price of oil - Russia' main export commodity - rose, foreign investment flowed in and domestic
consumption boomed. And it fell substantially after growth rates slowed in 2012-13.
Russia's intervention in Crimea in early 2014 changed everything. Within two months, Mr. Putin's
popularity jumped back to more than 80 percent, where it has stayed until now, despite the recession.
One might argue that these figures are misleading: Given the pressures faced by the Kremlin's
political opponents, aren't respondents in polls too afraid to answer questions honestly? Hardly,
according to a recent study co-written by the political scientist Tim Frye, based on an innovative
method known as "list experiments." It found that, even after adjusting for respondents' reluctance
to openly acknowledge any misgivings about specific leaders, Mr. Putin's popularity really is
very high: around 70 percent.
During the 2015-16 recession, GDP. fell by more than 4 percent and real incomes declined
by 10 percent. That is significant, but much less serious than, say, the 40 percent drop in GDP
that Russia experienced during the first half of the 1990s. Despite a dramatic decline in oil
prices and the burden of sanctions imposed by Western governments after the Crimea crisis, the
Putin administration has managed to avert economic disaster by pursuing competent macroeconomic
policies.
As the sanctions cut off Russia's access to global financial markets, the government set
out to cover the budget deficit by undertaking major austerity measures and tapping its substantial
sovereign funds. In early 2014, the Reserve Fund (created to mitigate fiscal shocks caused by
drops in oil prices) and the National Welfare Fund (set up to address shortfalls in the pension
system) together held the equivalent of 8 percent of GDP.
The government also adopted sound monetary policy, including the decision to fully float the
ruble in 2014. Because of the decline in oil prices and large net capital outflows - caused by
the need to repay external corporate debt and limited foreign investment in Russia - the currency
depreciated by 50 percent within a year. Although a weaker ruble hurt the living standards of
ordinary Russians, it boosted the competitiveness of Russia's companies. The Russian economy is
now beginning to grow again, if very modestly - at a projected 1 to 1.5 percent per year over
the next few years.
This performance comes nowhere near meeting Mr. Putin's election-campaign promises of 2012,
when he projected GDP. growth at 6 percent per year for 2011-18. But it isn't catastrophic either,
and the government has managed to explain it away.
Thanks partly to its near-complete control of the press, television and the internet, the government
has developed a grand narrative about Russia's role in the world - essentially promoting the view
that Russians may need to tighten their belts for the good of the nation. The story has several
subplots. Russian speakers in Ukraine need to be defended against neo-Nazis. Russia supports President
Bashar al-Assad of Syria because he is a rampart against the Islamic State, and it has helped
liberate Aleppo from terrorists. Why would the Kremlin hack the Democratic Party in the United
States? And who believes what the CIA says anyway?
The Russian people seem to accept much of this or not to care one way or the other. This should
come as no surprise. In a recent paper based on data for 128 countries over 10 years, Professor
Treisman and I developed an econometric model to assess which factors affect a government's approval
ratings and by how much. We concluded that fully removing internet controls in a country like
Russia today would cause the government's popularity ratings to drop by about 35 percentage points.
...
"... We have a dollar democracy that protects the economic interest of the elite class while more than willing to let working class families lose their homes and jobs on the back end of wide scale mortgage fraud. Then the fraud was perpetuated in the mortgage default process just to add insult to injury. ..."
"... One thing that Trump certainly got wrong that no one ever points out is that there is a lot more murder than rape crossing the Mexican-American border in the drug cartel operations ..."
"... The technocrats lied about how globalization would be great for everyone. People's actual experience in their lives has been different. ..."
"... Centrist Democrat partisans with their increasinly ineffectual defenses of the establishment say it's only about racism and xenophobia, but it's more than that. ..."
Assaults on democracy are working because our current political elites have no idea how to
defend it.
[There are certainly good points to this article, but the basic assumption that our electorally
representative form of republican government is the ideal incarnation of the democratic value
set is obviously incorrect. We have a dollar democracy that protects the economic interest of
the elite class while more than willing to let working class families lose their homes and jobs
on the back end of wide scale mortgage fraud. Then the fraud was perpetuated in the mortgage default
process just to add insult to injury.
One thing that Trump certainly got wrong that no one ever points out is that there is a lot
more murder than rape crossing the Mexican-American border in the drug cartel operations:<) ]
The author fails to mention the Sanders campaign. An elderly socialist Jew from Brooklyn was able
to win 23 primaries and caucuses and approximately 43% of pledged delegates to Clinton's 55%.
This despite a nasty, hostile campaign against him and his supporters by the Clinton campaign
and corporate media.
There's also Jeremy Corbyn in the UK. Podemos, Syriza, etc.
Italy's 5 Star movement demonstrates a hostility to technocrats as well.
The author doesn't really focus on how the technocrats have failed.
The technocrats lied about how globalization would be great for everyone. People's actual experience
in their lives has been different.
Trump scapegoated immigrants and trade, as did Brexit, but what he really did was channel hostility
and hatred at the elites and technocrats running the country.
Centrist Democrat partisans with their increasinly ineffectual defenses of the establishment
say it's only about racism and xenophobia, but it's more than that.
RC AKA Darryl, Ron said in reply to Peter K.... , -1
"Globalization has made the financial elite who donate to politicians very, very wealthy ... but
it has left millions of our workers with nothing but poverty and heartache," Trump told supporters
during a prepared speech targeting free trade in a nearly-shuttered former steel town in Pennsylvania.
In a speech devoted to what he called "How To Make America Wealthy Again," Trump offered a series
of familiar plans designed to deal with what he called "failed trade policies" - including rejection
of the proposed Trans-Pacific Partnership (TPP) with Pacific Rim nations and re-negotiation of the
North American Free Trade Agreement (NAFTA) with Canada and Mexico, withdrawing from it if necessary.
The presumptive Republican presidential nominee also said he would pursue bilateral trade agreements
rather than multi-national deals like TPP and NAFTA.
In addition to appointing better trade negotiators and stepping up punishment of countries that violate
trade rules, Trump's plans would also target one specific economic competitor: China. He vowed to
label China a currency manipulator, bring it before the World Trade Organization and consider slapping
tariffs on Chinese imports coming into the U.S.
This Russian hacking thing is being discussed entirely out of realistic context.
Cyber security
is a serious risk management operation that firms and governments spend outrageous sums of money
on because hacking attempts, especially from sources in China and Russia, occur in vast numbers
against every remotely desirable target corporate or government each and every day. At my former
employer, the State of Virginia, the data center repelled over two million hacking attempts from
sources in China each day. Northrop Grumman, the infrastructure management outsourcer for the
State of Virginia's IT infrastructure, has had no known intrusions into any Commonwealth of Virginia
servers that had been migrated to their standard security infrastructure thus far since the inception
of their contract in July 2006. That is almost the one good thing that I have to say about NG.
Some state servers, notably the Virginia Department of Health Professions, not under protection
of the NG standard network security were hacked and had private information such as client SSNs
stolen. Retail store servers are hacked almost routinely, but large banks and similarly well protected
corporations are not. Security costs and it costs a lot.
Even working in a data center with an excellent intrusion protection program as part of that
program I had to take an annual "securing the human" computer based training class. Despite all
of the technical precautions we were retrained each year to among other things NEVER put anything
in an E-Mail that we did not want to be available for everyone to read; i.e., to never assume
privacy is protected in an E-Mail. Embarrassing E-Mails need a source. We should assume that there
will always be a hacker to take advantage of our mistakes.
The reality is that all the major world powers (and some minor ones), including us, do this routinely
and always have. While it is entirely appropriate to be outraged that it may have materially determined
the election (which I think is impossible to know, though it did have some impact), we should
not be shocked or surprised by this.
"...I would suggest attacks on Putin's personal business holdings all over the world..."
[My guess is that has been being done a long time ago considering the direction of US/Russian
foreign relations over NATO expansion, the Ukraine, and Syria.
Long before TCP/IP the best way to prevent dirty secrets from getting out was not to have dirty
secrets. It still works.
The jabbering heads will not have much effect on the political opinions of ordinary citizens
because 40 million or more US adults had their credit information compromised by the Target hackers
three years ago. Target had been saving credit card numbers instead of deleting them as soon as
they obtained authorizations for transfers, so that the 40 million were certainly exposed while
more than twice that were probably exposed. Establishment politicians having their embarrassing
E-mails hacked is more like good fun family entertainment than something to get all riled up about.]
Voting machines are public and for Federal elections then tampering with them is elevated to a
Federal crime. Political parties are private. The Federal government did not protect Target or
Northrop Grumman's managed infrastructure for the Commonwealth of Virginia although either one
can take forensic information to the FBI that will obtain warrants for prosecution. Foreign criminal
operations go beyond the immediate domestic reach of the FBI. Not even Interpol interdicts foreign
leaders unless they are guilty of genocide, crimes against humanity or war crimes.
The Federal government can do what it will as there are not hard guidelines for such clandestine
operations and responses. Moreover, there are none to realistically enforce against them, which
inevitably leads to war given sufficient cycles of escalation. Certainly our own government has
done worse (political assassinations and supporting coups with money and guns) with impunity merely
because of its size, reach, and power.
BTW, "the burglar that just ransacked your house" can be arrested and prosecuted by a established
regulated legal system with absolutely zero concerns of escalating into a nuclear war, trade war,
or any other global hostility. So, not the same thing at all. Odds are good though that the burglar
will get away without any of that because when he does finally get caught it will be an accident
and probably only after dozen if not hundreds of B&E's.
There is a line. The US has crossed that line, but always in less developed countries that
had no recourse against us. Putin knows where the line is with the US. He will dance around it
and lean over it, but not cross it. We have him outgunned and he knows it. Putin did not tamper
with an election, a government function. Putin tampered with private data exposing incriminating
information against a political party, which is a private entity rather than government entity.
Whatever we do should probably stay within the rule of law as it gets messy fast once outside
those boundaries.
As far as burglars go I live in a particular working class zip code that has very few burglaries.
It is a bad risk/reward deal unless you are just out to steal guns and then you better make sure
that no one is home. Most people with children still living at home also have a gun safe. Most
people have dogs.
There are plenty burglaries in a lower income zip code nearby and lots more in higher income
zip codes further away, the former being targets of opportunity with less security and possible
drug stashes, which has a faster turnover than fencing big screen TV's. High income neighborhoods
are natural targets with jewelry, cash, credit cards, and high end electronics, but far better
security systems. I don't know much about their actual crime stats because they are on the opposite
side of the City of Richmond VA from me, but I used to know a couple of burglars when I lived
in the inner city. They liked the upscale homes near the University of Richmond on River Road.
"They kept telling us the e-mail didn't reveal anything and now they say the e-mail determined
the election"
And those two statement are not in conflict unless you are a brain dead Fox bot. Big nothing-burgers
like Bhengazi or trivial emails can easily be blown up and affect a few hundred thousand voters.
When the heck are you going to grow up and get past your 5 stages of Sanders grief?
I know - and there used to be some signs of a functional brain. Now it is all "they are all the
same" ism and Hillary derangement syndrome on steroids. Someone who cares need to do an intervention
before it becomes he get gobbled up by "ilsm" ism.
ABC video interview by Martha Raddatz of Donna Brazile 2:43
Adding the following FACTS, not opinion, to the Russian Hacking debate at the DNC
Russian hacks of the DNC began at least as early as April, the FBI informed the DNC in May
of the hacks, NO ONE in the FedGovt offered to HELP the DNC at anytime (allowed it to continue),
and Russia's Putin DID NOT stop after President Obama told Putin in September to "Cut it Out",
despite Obama's belief otherwise
"DNC Chair Says Russian Hackers Attacked The Committee Through Election Day"
'That goes against Obama's statement that the attacks ended after he spoke to Putin in September'
by Dave Jamieson Labor Reporter...The Huffington Post...12/18/2016...10:59 am ET
"The chair of the Democratic National Committee said Sunday that the DNC was under constant
cyber attack by Russian hackers right through the election in November. Her claim contradicts
President Barack Obama's statement Friday that the attacks ended in September after he issued
a personal warning to Russian President Vladimir Putin.
"No, they did not stop," Donna Brazile told Martha Raddatz on ABC's "This Week." "They came
after us absolutely every day until the end of the election. They tried to hack into our system
repeatedly. We put up the very best cyber security but they constantly [attacked]."
Brazile said the DNC was outgunned in its efforts to fend off the hacks, and suggested the
committee received insufficient protection from U.S. intelligence agencies. The CIA and FBI have
reportedly concluded that Russians carried out the attacks in an effort to help Donald Trump defeat
Hillary Clinton.
"I think the Obama administration ― the FBI, the various other federal agencies ― they informed
us, they told us what was happening. We knew as of May," Brazile said. "But in terms of helping
us to fight, we were fighting a foreign adversary in the cyberspace. The Democratic National Committee,
we were not a match. And yet we fought constantly."
In a surprising analogy, Brazile compared the FBI's help to the DNC to that of the Geek Squad,
the tech service provided at retailer Best Buy ― which is to say well-meaning, but limited.
"They reached out ― it's like going to Best Buy," Brazile said. "You get the Geek Squad, and
they're great people, by the way. They reached out to our IT vendors. But they reached us, meaning
senior Democratic officials, by then it was, you know, the Russians had been involved for a long
time."..."
This new perspective and set of facts is more than distressing it details a clear pattern of Executive
Branch incompetence, malfeasance, and ineptitude (perhaps worse if you are conspiratorially inclined)
im1dc -> im1dc... , -1
The information above puts in bold relief President Obama's denial of an Electoral College briefing
on the Russian Hacks
There is now no reason not to brief the Electors to the extent and degree of Putin's help for
demagogue Donald
Fred C. Dobbs -> Peter K....
December 26, 2016 at 07:15 AM neopopulism: A cultural and political movement, mainly in Latin
American countries, distinct from twentieth-century populism in radically combining classically opposed
left-wing and right-wing attitudes and using electronic media as a means of dissemination. (Wiktionary)
How Americans Spent Their Money In The Last 75 Years (In 1 Simple Chart)
Tyler Durden
Dec 25, 2016 11:55 PM
0
SHARES
Consumer spending makes up 70% of the United States economy.
We all have
bills to pay and mouths to feed, but where do Americans spend their money?
Here is a
breakdown
of how Americans spent their money in the last 75 years...
In the chart above, spending is broken into 12 categories:
Reading, alcohol, tobacco, education, personal care, miscellaneous, recreation &
entertainment, healthcare, clothing, food, transportation and housing. Each category is
further broken down into spending by year, from 1941 to 2014, and each category is given
a unique color. The
data were
collected from the Bureau of Labor Statistics
. The data is adjusted for inflation
and measures median spending of all Americans.
Unsurprisingly, housing expenses have almost always been the largest area
of spending in America for over 70 years.
The only exception is 1941, when
spending on food averaged $8,311, whereas spending on housing came to $7,537.
However, in 1941 the government included alcohol in the food spending category, which
inflates the food spending data for that year. In the other years, alcohol was given its
own category. In every other year measured, spending on housing outpaced every other
category.
Another interesting trend is the downward slope of spending on
clothing.
Americans spent the most on clothing in 1961 for an average of
$4,157. In every year measured since 1961, spending on clothing fell, even when
accounting for inflation.
At the same time, Americans began spending more on education,
transportation and healthcare.
Spending on education has increased far more
than any other category, jumping from $242 in 1941 to $1,236 in 2014. Education spending
increased at a particularly fast rate between 1984 and 1994 and onward. While spending
on healthcare increased between 1941 and 2014, overall spending dipped between 1973 and
1984, but then began rising rapidly thereafter.
Between 1941 and 2014 Americans spent money on most of the same
things, with a few changes.
Housing has persisted as a large area of spending
for Americans, as has the food category. However, spending on food and clothing has
fallen when adjusting for inflation while spending on education and healthcare has risen
quickly.
"... "was the most traded contract on Tuesday across the whole ICE Brent market." ..."
"... "That's a relatively cheap lottery ticket," ..."
"... "It's clearly not the consensus in the market that we're going to see a return to those prices any time soon, so it's more likely a hedge against unforeseen geopolitical events during that time." ..."
Oil prices are rising and speculators are already staking out bullish positions on futures for the
next few months, but some traders are rolling the dice on a much bigger price spike in the next two
years.
Some contracts that pay off big time if oil prices hit $100 per barrel by December 2018 just saw
a spike in interest, according to
Bloomberg
. The $100 December 2018 call option, Bloomberg says,
"was the most traded contract
on Tuesday across the whole ICE Brent market."
That contract gives the owner the right to buy
Dec. 2018 futures at $100 per barrel.
Few oil analysts expect oil prices to rise that high within the next two years. The oil market is
still oversupplied, and even with the OPEC deal which will take 1.8 million barrels per day off
the market if fully fulfilled the world is still flush with oil sitting in storage. It will take
time to work through those inventories, providing a cushion to a tightening market. However, the
sudden interest in such a remote possibility of a large price spike suggests that investors are growing
more confident that the market is on the upswing.
"That's a relatively cheap lottery ticket,"
Ole Hansen, head of commodity strategy at Saxo
Bank A/S, said in an interview with Bloomberg.
"It's clearly not the consensus in the market
that we're going to see a return to those prices any time soon, so it's more likely a hedge against
unforeseen geopolitical events during that time."
Purchasing these options may not be such a huge risk Bloomberg says they could cost a bit more
than $1 million while the payoff would be multiples of that if prices happened to go that high. It
is similar to going to Vegas and playing roulette, putting some money on a single number or a few
numbers, which have long odds but huge payouts. On the other hand, the spike in interest in the $100
options could also just be a small part of a broader hedging program from some companies, cropping
up now since the contracts are two years out.
With oil back above $50 per barrel, money managers have become much more bullish on crude. In fact,
collectively, hedge funds and other investors have sold off short bets and purchased long positions,
building up the
most bullish net-long position
in more than two years. OPEC has not yet cut back by a single
barrel, but its Nov. 30 deal in Vienna has succeeded in sparking a bull run for oil.
"... Excellent critique. Establishment Democrats are tone-deaf right now; the state of denial they live in is stunning. I'd like to think they can learn after the shock of defeat is over, but identity politics for non-white, non-male, non-heterosexual is what the Democratic party is about today and has been the last decade or so. ..."
"... That's the effect of incessant Dem propaganda pitting races and sexes against each other. ..."
"... And Democrats' labeling of every Republican president/candidate as a Nazi - including Trump - is desensitizing the public to the real danger created by discriminatory policies that punish [white] children and young adults, particularly boys. ..."
"... So, to make up for the alleged screw job that women and minorities have supposedly received, the plan will be screwing white/hetro/males for the forseeable future. My former employer is doing this very plan, as we speak. Passed over 100 plus males, who have been turning wrenches on airplanes for years, and installed a female shop manager who doesn't know jack-$##t about fixing airplanes. No experience, no certificate......but she has a management degree. But I guess you don't know how to do the job to manage it. ..."
"... Bernie Sanders was that standard bearer, but Krugman and the Neoliberal establishment Democrats (ie. Super Delegates) decided that they wanted to coronate Clinton. ..."
"... Evolution of political parties happens organically, through evolution (punctuated equilibrium - like species and technology - parties have periods of stability with some sudden jumps in differentiation). ..."
"... If Nancy Pelosi is re-elected (highly likely), it will be the best thing to happen to Republicans since Lincoln. They will lose even more seats. ..."
"... The Coastal Pelosi/Schumer wing is still in power, and it will take decimation at the ballot box to change the party. The same way the "Tea Party" revolution decimated the Republicans and led to Trump. Natural selection at work. ..."
"... The central fact of the election is that Hillary has always been extraordinarily unlikable, and it turned out that she was Nixonianly corrupt ..."
"... I'm from Dallas. Three of my closest friends growing up (and to this day), as well as my brother in law, are hispanic. They, and their families, all vote Republican, even for Trump. Generally speaking, the longer hispanics are in the US, the more likely they tend to vote Republican. ..."
"... The Democratic Establishment and their acolytes are caught in a credibility trap. ..."
"... I also think many Trump voters know they are voting against their own economic interest. The New York Times interviewed a number who acknowledge that they rely on insurance subsidies from Obamacare and that Trump has vowed to repeal it. I know one such person myself. She doesn't know what she will do if Obamacare is repealed but is quite happy with her vote. ..."
"... Krugman won his Nobel for arcane economic theory. So it isn't terribly surprising that he spectacularly fails whenever he applies his brain to anything remotely dealing with mainstream thought. He is the poster boy for condescending, smarter by half, elite liberals. In other words, he is an over educated, political hack who has yet to learn to keep his overtly bias opinions to himself. ..."
"... Funny how there's all this concern for the people whose jobs and security and money have vanished, leaving them at the mercy of faceless banks and turning to drugs and crime. Sad. Well, let's bash some more on those lazy, shiftless urban poors who lack moral strength and good, Protestant work ethic, shall we? ..."
"... Clinton slammed half the Trump supporters as deplorables, not half the public. She was correct; about half of them are various sorts of supremacists. The other half (she said this, too) made common cause with the deplorables for economic reasons even though it was a devil's bargain. ..."
"... I have never commented here but I will now because of the number of absurd statements. I happen to work with black and Hispanic youth and have also worked with undocumented immigrants. To pretend that trump and the Republican Party has their interest in mind is completely absurd. As for the white working class, please tell me what programs either trump or the republican have put forward to benefit them? I have lost a lot of respect for Duy ..."
"... The keys of the election were race, immigration and trade. Trump won on these points. What dems can do is to de-emphasize multiculturalism, racial equality, political correctness etc. Instead, emphasize economic equality and security, for all working class. ..."
"... Krugman more or less blames media, FBI, Russia entirely for Hillary's loss, which I think is wrong. As Tim said, Dems have long ceased to be the party of the working class, at least in public opinion, for legitimate reasons. ..."
"... All Mr. Krugman and the Democratic establishment need to do is to listen, with open ears and mind, to what Thomas Frank has been saying, and they will know where they went wrong and most likely what to do about it, if they can release themselves from their fatal embrace with Big Money covered up by identity politics. ..."
"... Pretty sad commentary by neoliberal left screaming at neoliberal right and vice versa. ..."
"... The neoliberals with their multi-culti/love them all front men have had it good for a while, now there's a reaction. Deal with it. ..."
Excellent critique. Establishment Democrats are tone-deaf right now; the state of denial they
live in is stunning. I'd like to think they can learn after the shock of defeat is over, but identity
politics for non-white, non-male, non-heterosexual is what the Democratic party is about today
and has been the last decade or so.
The only way Dems can make any headway by the midterms is if Trump really screws up,
which is a tall order even for him. He will pick the low-hanging fruit (e.g., tax reform, Obamacare
reform, etc), the economy will continue to recover (which will be attributed to Trump), and Dems
will lose even more seats in Congress. And why? Because they refuse to recognize that whites from
the middle-class and below are just as disadvantaged as minorities from the same social class.
If white privilege exists at all (its about as silly as the "Jews control the banks and media"
conspiracy theories), it exists for the upper classes. Poor whites need help too. And young men
in/out of college today are being displaced by women - not because the women have superior academic
qualification, but because they are women. I've seen it multiple times firsthand in some of the
country's largest companies and universities (as a lawyer, when an investigation or litigation
takes place, I get to see everyone's emails, all the way to CEO/board). There is a concerted effort
to hire only women and minorities, especially for executive/managerial positions. That's not equality.
That's the effect of incessant Dem propaganda pitting races and sexes against each other.
This election exposed the media's role, but its not over. Fortunately, Krugman et al. are
showing the Dems are too dumb to figure out why they lost. Hopefully they keep up their stupidity
so identity politics can fade into history and we can get back to pursuing equality.
"There is a concerted effort to hire only women and minorities, especially for executive/managerial
positions."
Goooooolllllllllllllly, gee. Now why would that be? I hope you're not saying there shouldn't
be such an effort. This is a good thing. It exactly and precisely IS equality. It may be a bit
harsh, but if certain folks continually find ways to crap of women and minorities, then public
policies would seem warranted.
Are you seriously telling us that pursuing public policies to curb racial and sexual discrimination
are a waste of time?
How, exactly, does your vision of "pursuit of equality" ameliorate the historical fact of discrimination?
You don't make up for past discrimination with discrimination. You make up for it by equal application
of the law. Today's young white men are not the cause of discrimination of the 20th century, or
of slavery. If you discriminate against them because of the harm caused by other people, you're
sowing the seeds of a REAL white nationalist movement. And Democrats' labeling of every Republican
president/candidate as a Nazi - including Trump - is desensitizing the public to the real danger
created by discriminatory policies that punish [white] children and young adults, particularly
boys.
Displacement of white men by lesser-qualified women and minorities is NOT equality.
So, to make up for the alleged screw job that women and minorities have supposedly received,
the plan will be screwing white/hetro/males for the forseeable future. My former employer is doing
this very plan, as we speak. Passed over 100 plus males, who have been turning wrenches on airplanes
for years, and installed a female shop manager who doesn't know jack-$##t about fixing airplanes.
No experience, no certificate......but she has a management degree. But I guess you don't know
how to do the job to manage it.
God forbid somebody have to "pay some dues" before setting them loose as suit trash.
Back when cultural conservatives ruled the roost (not that long ago), they didn't pursue equality
either. Rather, they favored (hetero Christian) white men. So hoping for Dem stupidity isn't going
to lead to equality. Most likely it would go back to favoring hetero Christian white men.
"...should they find a new standard bearer that can win the Sunbelt states and bridge the divide
with the white working class? I tend to think the latter strategy has the higher likelihood of
success."
Easy to say. What would that standard bearer or that strategy look like?
Bernie Sanders was that standard bearer, but Krugman and the Neoliberal establishment Democrats
(ie. Super Delegates) decided that they wanted to coronate Clinton. Big mistake that we are
now paying for...
Basic political math - Sanders would have been eaten alive with his tax proposals by the GOP anti-tax
propaganda machine on Trump steroids.
His call to raise the payroll tax to send more White working class hard-earn money to Washington
would have made election night completely different - Trump would have still won, it just wouldn't
have been a surprise but rather a known certainty weeks ahead.
Evolution of political parties happens organically, through evolution (punctuated equilibrium
- like species and technology - parties have periods of stability with some sudden jumps in differentiation).
Old politicians are defeated, new ones take over. The old guard, having been successful in
the past in their own niche rarely change.
If Nancy Pelosi is re-elected (highly likely), it will be the best thing to happen to Republicans
since Lincoln. They will lose even more seats.
The Coastal Pelosi/Schumer wing is still in power, and it will take decimation at the ballot
box to change the party. The same way the "Tea Party" revolution decimated the Republicans and
led to Trump. Natural selection at work.
In 1991, Republicans thought they would always win, Democrats thought the country was relegated
to Republican Presidents forever. Then along came a new genotype- Clinton. In 2012, Democrats
thought that they would always win, and Republicans were thought to be locked out of the electoral
college. Then along came a new genotype, Trump.
A new genotype of Democrat will have to emerge, but it will start with someone who can win
in flyover country and Texas. Hint: They will have to drop their hubris, disdain and lecturing,
some of their anti-growth energy policies, hate for the 2nd amendment, and become more fiscally
conservative. They have to realize that *no one* will vote for an increase in the labor supply
(aka immigration) when wages are stagnant and growth is anemic. And they also have to appreciate
people would rather be free to choose than have decisions made for them. Freedom means nothing
unless you are free to make mistakes.
But it won't happen until coastal elites like Krugman and Pelosi have retired.
My vote for the Democratic Tiktaalik is the extraordinarily Honorable John Bel Edwards, governor
of Louisiana. The central fact of the election is that Hillary has always been extraordinarily
unlikable, and it turned out that she was Nixonianly corrupt (i.e., deleted E-mails on her
illegal private server) as well - and she still only lost by 1% in the tipping point state (i.e.,
according to the current count, which could very well change).
You know what will win Texas? Demographic change. Economic growth. And it is looking pretty inevitable
on both counts.
I'm also pretty damned tired of being dismissed as "elitist", "smug" and condescending. I grew
up in a red state. I know their hate. I know their condescension (they're going to heaven, libruls
are not).
It cuts both ways. The Dems are going into a fetal crouch about this defeat. Did the GOP do
that after 2008? Nope. They dug in deeper.
Ahh yes, all Texas needs is demographic change, because all [Hispanics, Blacks, insert minority
here] will always and forever vote Democrat. Even though the Democrats take their votes for granted
and Chicago/Baltimore etc. are crappy places to live with no school choice, high taxes, fleeing
jobs, and crime. Even though Trump outperformed Romney among minorities.
Clinton was supposed to be swept up in the winds of demographics and the Democrats were supposed
to win the White House until 2083.
Funny things happen when you take votes for granted. Many urban areas are being crushed by
structural deficits and need some Detroit type relief. I predict that some time in the next 30
years, poles reverse, and urban areas are run by Republicans.
If you are tired of being dismissed as "elitist", "smug" and condescending, don't be those
things. Don't assume people will vote for your party because they have always voted that way,
or they are a certain color. Respect the voters and work to earn it.
The notion that hispanic=democrat that liberals like bob have is hopelessly ignorrant.
I'm from Dallas. Three of my closest friends growing up (and to this day), as well as my
brother in law, are hispanic. They, and their families, all vote Republican, even for Trump. Generally
speaking, the longer hispanics are in the US, the more likely they tend to vote Republican.
The Democratic Party's plan to wait out the Republicans and let demographics take over is ignorant,
racist and shortsighted, cooked up by coastal liberals that haven't got a clue, and will ultimately
fail.
In addition to losing hispanics, Democrats will also start losing the African American vote
they've been taking for granted the last several decades. Good riddance to the Democratic party,
they are simply unwilling to listen to what the people want.
This is a really shoddy piece that repeats the medias pulling of Clintons quote out of context.
She also said "that other basket of people are people who feel that the government has let them
down, the economy has let them down, nobody cares about them, nobody worries about what happens
to their lives and their futures, and they're just desperate for change. It doesn't really even
matter where it comes from. They don't buy everything he says, but he seems to hold out some hope
that their lives will be different. They won't wake up and see their jobs disappear, lose a kid
to heroin, feel like they're in a dead-end. Those are people we have to understand and empathize
with as well."
Now maybe it is okay to make gnore this part of the quote because you think calling racism
"deplorable" is patently offensive. But when the ignored context makes the same points that Duy
says she should have been making, that is shoddy.
There are zero electoral college votes in the State of Denial. Hopefully you understand a)the
difference between calling people deplorable and calling *behavior* deplorable; b) Godwin's Law:
when you resort to comparing people to Hitler you've lost the argument. Trump supporters were
not racist, homophobic, xenophobic, or any other phobic. As a moderate, educated, female Trump
supporter counseled: He was an a-hole, but I liked his policies.
Even my uber liberal friends cannot tell me what Clinton's economic plan was. Only that they
are anti-Trump.
Trump flanked Clinton on the most popular policies (the left used to be the anti-trade party
of union Democrats): Lower regulation, lower taxes, pro-2nd amendment, trade deals more weighted
in favor of US workers, and lower foreign labor supply. Turn's out, those policies are sufficiently
popular that people will vote for them, even when packaged into an a-hole. Trump's anti-trade
platform was preached for decades by rust belt unions.
The coastal Democrats have become hostages to pro-big-government municipal unions crushing
cities under structural deficits, high taxes, poorly run schools, and overbearing regulations.
The best thing that can happen for the Democrats is for the Republicans to push for reforms of
public pensions, school choice, and break municipal unions. Many areas see the disaster in Chicago
and Baltimore, run by Democrats for decades, and say no thank you. Freed of the need to cater
to urban municipal unions, Democrats may be able to appeal to people elsewhere.
Tim, I believe you've missed the point: by straightforward measures, Democratic voters in USA
are substantially under-represented. The problem is likely to get much worse, as the party whose
policies abet minority rule now controls all three branches of the federal government and a substantial
majority of state governments.
This is an outstanding takedown on what has been a never-ending series of garbage from Krugman.
I used to hang on every post he'd made for years after the 2008 crisis hit. But once the Clinton
coronation arose this year, the arrogant, condescending screed hit 11 - and has not slowed down
since. Threads of circular and illogical arguments have woven together pathetic - and often non-liberal
- editorials that have driven me away permanently.
Since he's chosen to ride it all on political commentary, Krugman's credibility is right there
with luminaries such as Nial Ferguson and Greg Mankiw.
Seems that everyone who chooses to hitch their wagon to the Clintons ends up covered in bilge.....
funny thing about that persistent coincidence...
"And it is an especially difficult pill given that the decline was forced upon the white working
class.... The tsunami of globalization washed over them....in many ways it was inevitable, just
as was the march of technology that had been eating away at manufacturing jobs for decades. But
the damage was intensified by trade deals.... Then came the housing crash and the ensuing humiliation
of the foreclosure crisis."
All the more amazing then that Trump pulled out such a squeaker of an election beating Clinton
by less than 2% in swing states and losing the popular vote overall. In the shine of Duy's lights
above, I would have imagined a true landslide for Trump... Just amazing.
"I don't know that the white working class voted against their economic interest".
I think you're pushing too hard here. Democrats have been for, and Republicans against many
policies that benefit the white working class: expansionary monetary policy, Obamacare, housing
refinance, higher minimum wage, tighter worker safety regulation, stricter tax collection, and
a host of others.
I also think many Trump voters know they are voting against their own economic interest.
The New York Times interviewed a number who acknowledge that they rely on insurance subsidies
from Obamacare and that Trump has vowed to repeal it. I know one such person myself. She doesn't
know what she will do if Obamacare is repealed but is quite happy with her vote.
There is zero evidence for this theory. It ignores the fact that Trump lied his way to the White
House with the help of a media unwilling to confront and expose his mendacity. And there was the
media's obsession with Clinton's Emails and the WikiLeaks daily release of stolen DNC documents.
And finally the Comey letter which came in the middle of early voting keeping the nation in suspense
for 11 days and which was probably a violation of the hatch act. Comey was advised against his
unjustified action by higher up DOJ officials but did it anyway. All of these factors loomed much
larger than the deplorables comment. Besides, the strong dollar fostered by the FOMC's obsession
with "normalization" helped Trump win because the strong dollar hurts exporters like farmers who
make up much of the rural vote as well as hurting US manufacturing located in the midwest states.
The FOMC was objectively pro Trump.
I was surrounded by Trump voters this past election. Trust me, an awful lot of them are deplorable.
My father is extremely anti semetic and once warned me not to go to Minneapolis because of there
being "too many Muslims." One of our neighbors thinks all Muslims are terrorists and want to do
horrible things to all Christians.
I know, its not a scientific study. But I've had enough one on one conversations with Trump
supporters (not just GOP voters, Trump supporters) to say that yes, as a group they have some
pretty horrible views.
Yep. I've got plenty of stories myself. From the fact that there are snooty liberals it does NOT
follow that the resentment fueling Trump's support is justified.
One should note that the "The racist, sexist, homophobic, xenophobic, Islamaphobic - you name
it ... " voted for Obama last time around.
When the blue collar voter (for lack of a better class) figures out that the Republicans (Trump)
are not going to help them anymore than the Dems did -- it will be time for them to understand
they can only rely on themselves, namely: through rebuilding labor union density, which can be
done AT THE STATE BY PROGRESSIVE STATE LEVEL.
To keep it simple states may add to federal protections like the minimum wage or safety regs
-- just not subtract. At present the NLRB has zero (no) enforcement power to prevent union busting
(see Trump in Vegas) -- so illegal labor market muscling, firing of organizers and union joiners
go completely undeterred and unrecoursed.
Recourse, once we get Congress back might include mandating certification elections on finding
of union busting. Nothing too alien: Wisconsin, for instance, mandates RE-certification of all
public employee unions annually.
Progressive states first step should be making union busting a felony -- taking the power playing
in our most important and politically impacting market as seriously as taking a movie in the movies
(get you a couple of winters). For a more expansive look (including a look at the First Amendment
and the fed cannot preempt something with nothing, click here):
http://ontodayspage.blogspot.com/2016/11/first-100-days-progressive-states-agenda.html
Labor unions -- returned to high density -- can act as the economic cop on every corner --
our everywhere advocates squelching such a variety of unhealthy practices as financialization,
big pharam gouging, for profit college fraud (Trump U. -- that's where we came into this movie).
6% private union density is like 20/10 bp; it starves every other healthy process (listening blue
collar?).
Don't panic if today's Repub Congress passes national right-to-work legislation. Germany, which
has the platinum standard labor institutions, does not have one majority union (mostly freeloaders!),
but is almost universally union or covered by union contracts (centralized bargaining -- look
it up) and that's what counts.
Trump took both sides of every issue. He wants high and low interest rates. He wants a depression
first, (Bannonomics) and inflation first, (Trumponomics), he wants people to make more and make
less. He is nasty and so he projected that his opponent was nasty.
Now he has to act instead of just talk out of both sides of his mouth. That should not be as
easy to do.
Hi Tim, nice post, and I particularly liked your last paragraph. The relevant question today if
you have accepted where we are is effectively: 'What would you prefer - a Trump victory now? Or
a Trump type election victory in a decade or so? (with todays corresponding social/economic/political
trends continuing).
I'm a Brit so I was just an observer to the US election but the same point is relevant here in
the UK - Would I rather leave the EU now with a (half sensible) Tory government? Or would I rather
leave later on with many more years of upheaval and a (probably by then quite nutty) UKIP government?
I know which one I prefer - recognise the protest vote sooner, rather than later.
Sure they're angry, and their plight makes that anger valid.
However, not so much their belief as to who and what caused their plight, and more importantly,
who can and how their plight would be successfully reversed.
Most people have had enough personal experiences to know that it is when we are most angry
that we do the stupidest of things.
Krugman won his Nobel for arcane economic theory. So it isn't terribly surprising that he
spectacularly fails whenever he applies his brain to anything remotely dealing with mainstream
thought. He is the poster boy for condescending, smarter by half, elite liberals. In other words,
he is an over educated, political hack who has yet to learn to keep his overtly bias opinions
to himself.
Tim's narrative felt like a cold shower. I was apprehensive that I found it too agreeable on one
level but were the building blocks stable and accurate?
Somewhat like finding a meal that is satisfying, but wondering later about the ingredients.
But, like Tim's posts on the Fed, they prompt that I move forward to ponder the presentation
and offer it to others for their comment. At this time, five-stars on a 1-5 system for bringing
a fresh approach to the discussion. Thanks, Professor Duy. This to me is Piketty-level pushing
us onto new ground.
Funny how there's all this concern for the people whose jobs and security and money have vanished,
leaving them at the mercy of faceless banks and turning to drugs and crime. Sad. Well, let's bash
some more on those lazy, shiftless urban poors who lack moral strength and good, Protestant work
ethic, shall we?
Clinton slammed half the Trump supporters as deplorables, not half the public. She was correct;
about half of them are various sorts of supremacists. The other half (she said this, too) made
common cause with the deplorables for economic reasons even though it was a devil's bargain.
Now, there's a problem with maternalism here; it's embarrassing to find out that the leader
of your political opponents knows you better than you know yourself, like your mother catching
you out in a lie. It was impolitic for Clinton to have said this But above all remember that when
push came to shove, the other basket made common cause with the Nazis, the Klan, and so on and
voted for a rapey fascist.
"Economic development" isn't (and can't) be the same thing as bringing back lost manufacturing
(or mining) jobs. We have had 30 years of shifting power between labor and capital. Restoring
labor market institutions (both unions and government regulation) and raising the floor through
higher minimum wages, single payer health care, fair wages for women and more support for child
and elder care, trade policies that care about working families, better safe retirement plans
and strengthened Social Security, etc. is key here, along with running a real full employment
economy, with a significant green component. See Bob Polllin's excellent program in
https://mitpress.mit.edu/books/back-full-employment
That program runs up against racism, sexism, division, and fear of government and taxation,
and those are powerful forces. But we don't need all Trump supporters. We do need a real, positive
economic program that can attract those who care about the economics more than the cultural stuff.
How about people of color drop the democrats and their hand wringing about white people when they
do nothing about voter suppression!! White fragility is nauseating and I'm planning to arm myself
and tell all the people of color I know to do the same. I expect nothing from the democrats going
forward.
I have never commented here but I will now because of the number of absurd statements. I happen
to work with black and Hispanic youth and have also worked with undocumented immigrants. To pretend
that trump and the Republican Party has their interest in mind is completely absurd. As for the
white working class, please tell me what programs either trump or the republican have put forward
to benefit them? I have lost a lot of respect for Duy
I think much of appeal of DJT was in his political incorrectness. PC marginalises. Very. Of white
working class specifically. it tells one, one cannot rely on one's ideas any more. In no uncertain
terms. My brother, who voted for Trump, lost his job to PC without offending on purpose, but the
woman in question felt free to accuse him of violating her, with no regard to his fate. He was
never close enough to do that. Is that not some kind of McCarthyism?
Just to be correct. Clinton was saying that half (and that was a terrible error-should have said
"some") were people that were unreachable, but that they had to communicate effectively with the
other part of his support. People who echo the media dumb-ing down of complex statements are part
of the problem.
Still, I believe that if enough younger people and african-americans had come out in the numbers
they did for Obama in some of those states, Clinton would have won. Certainly, the media managed
to paint her in more negative light than she objectively deserved-- even if she deserved some
negatives.
I am in no way a fan of HRC. Still, the nature of the choice was blurred to an egregious degree.
"The tough reality of economic development is that it will always be easier to move people to
jobs than the jobs to people."
This is indisputable, but I have never seen any discussion of the point that moving is not
cost-free. Back in the '90s I had a discussion with a very smart person, a systems analyst, who
insisted that poor people moved to wherever the welfare benefits were highest.
I tried to point out that moving from one town to another costs more than a bus ticket. You
have to pay to have your possessions transported. You have to have enough cash to pay at least
two months' rent and maybe an additional security deposit.
You have to have enough cash to pay for food for at least one month or however long it takes
for your first paycheck or welfare check to come in. There may be other costs like relocating
your kids to a new school system and maybe changing your health insurance provider.
There probably are other costs I'm not aware of, and the emotional cost of leaving your family
and your roots. The fact that some people succeed in moving is a great achievement. I'm amazed
it works at all in Europe where you also have the different languages to cope with.
I'm not sure the Hillary non-voters - which also include poor black neighborhoods - were voting
against their economic interests. Under Obama, they didn't do well. Many of them were foreclosed
on while Obama was giving the money to the banks. Jobs haven't improved, unless you want to work
at an Amazon warehouse or for Uber and still be broke. Obama tried to cut social security. He
made permanent Bush's tax cuts for the rich. Wars and more wars. Health premiums went up - right
before the election. The most Obama could say in campaigning for Hillary was "if you care about
my legacy, vote for Hillary." He's the only one that cares about his legacy. I don't know that
it's about resentment but about just having some hope for economic improvement - which Trump offered
(no matter how shallow and deceptive) and Hillary offered nothing but "Trump's an idiot and I'm
not."
I believe Bernie would have beat Trump's ass if 1) the DNC hadn't put their fingers on the
scale for Hillary and 2) same with the media for Hillary and Trump. The Dems need more than some
better campaign slogans. They really need a plan for serious economic equality. And the unions
need to get their shit together and stop thinking that supporting corrupt corporate Dems is working.
Or perhaps the rank and file need to get their shit together and get rid of union bosses.
The keys of the election were race, immigration and trade. Trump won on these points. What
dems can do is to de-emphasize multiculturalism, racial equality, political correctness etc. Instead,
emphasize economic equality and security, for all working class.
Lincoln billed the civil war as a war to preserve the union, to gain wide support, instead
of war to free slaves. Of course, the slaves were freed when the union won the war. Dems can benefit
from a similar strategy
Krugman more or less blames media, FBI, Russia entirely for Hillary's loss, which I think
is wrong. As Tim said, Dems have long ceased to be the party of the working class, at least in
public opinion, for legitimate reasons.
Besides, a lot voters are tired of stale faces and stale ideas. They yearn something new, especially
the voters in deep economic trouble.
Maybe it's time to try some old fashioned mercantilism, protectionism? America first is an
appealing idea, in this age of mindless globalization.
All Mr. Krugman and the Democratic establishment need to do is to listen, with open ears and
mind, to what Thomas Frank has been saying, and they will know where they went wrong and most
likely what to do about it, if they can release themselves from their fatal embrace with Big Money
covered up by identity politics.
But they cannot bring themselves to admit their error, and to give up their very personally
profitable current arrangement. And so they are caught up in a credibility trap which is painfully
obvious to the objective observer.
Pretty sad commentary by neoliberal left screaming at neoliberal right and vice versa.
It seems quite clear that the vast majority of commenters live as much in the ivory tower/bubble
as is claimed for their ideological opponent.
It is also quite interesting that most of these same commenters don't seem to get that the
voting public gets what the majority of it wants - not what every single group within the overall
population wants.
The neoliberals with their multi-culti/love them all front men have had it good for a while,
now there's a reaction. Deal with it.
"... The author missed the fact that pillage and plunder and rentier capitalism as defined by Reaganomics
has failed just as badly as communism for the same reason. ..."
"... If you want to be paid well, you must pay everyone else well. ..."
"Do unto Others " -might be an important Economic principle
The author missed the fact that pillage and plunder and rentier capitalism as defined by
Reaganomics has failed just as badly as communism for the same reason.
When you call for cost cuts which can only be done by cutting labor costs which means fewer
workers getting paid less, you are calling for your wages and income, or of your children and
grandchildren to be slashed as well.
Tax cuts mean paying fewer workers to provide public services whether roads, education, knowledge,
health, which means you will suffer losses of services AND eventual loss of income to your family.
Fewer paid workers forces wages and incomes lower for all workers.
If you want to be paid well, you must pay everyone else well.
Posted by BeauHD on Tuesday December
06, 2016 @07:05PM from the muscle-memory dept.
An anonymous reader quotes a report from Phys.Org:
Scientists have
developed a mind-controlled robotic hand
that allows people with certain types of spinal injuries
to perform everyday tasks such as using a fork or drinking from a cup. The low-cost device was tested
in Spain on six people with quadriplegia affecting their ability to grasp or manipulate objects.
By wearing a cap that measures electric brain activity and eye movement the users were able to send
signals to a tablet computer that controlled the glove-like device attached to their hand. Participants
in the small-scale study were able to perform daily activities better with the robotic hand than
without, according to results
published Tuesday in
the journal Science Robotics .
It took participants just 10 minutes to learn how to use the system
before they were able to carry out tasks such as picking up potato chips or signing a document. According
to Surjo R. Soekadar, a neuroscientist at the University Hospital Tuebingen in Germany and lead author
of the study, participants represented typical people with high spinal cord injuries, meaning they
were able to move their shoulders but not their fingers. There were some limitations to the system,
though. Users had to have sufficient function in their shoulder and arm to reach out with the robotic
hand. And mounting the system required another person's help.
An autonomous
shuttle from Auro Robotics is
picking up and dropping off students, faculty, and visitors
at the Santa Clara University Campus
seven days a week. It doesn't go fast, but it has to watch out for pedestrians, skateboarders, bicyclists,
and bold squirrels (engineers added a special squirrel lidar on the bumper). An Auro engineer rides
along at this point to keep the university happy, but soon will be replaced by a big red emergency
stop button (think Staples Easy button). If you want a test drive, just look for a "shuttle stop"
sign (there's one in front of the parking garage) and climb on, it doesn't ask for university ID.
More directly to the heart of American fast-food cuisine, Momentum Machines, a restaurant concept
with a robot that can supposedly
flip hundreds of burgers an hour
, applied for a building permit in San Francisco and started
listing job openings this January, reported Eater. Then there's Eatsa, the automat restaurant where
no human interaction is necessary, which has locations
popping up across California .
(businessinsider.co.id)
83 Posted by EditorDavid on Sunday December 11, 2016 @09:34PM from the damn-it-Jim-I'm-a-doctor-not-a-supercomputer
dept.
"Supercomputing has another use," writes Slashdot reader
rmdingler , sharing a story that
quotes David Kenny, the General Manager of IBM Watson:
"There's a 60-year-old woman in Tokyo. She was at the University of Tokyo. She had been diagnosed
with leukemia six years ago. She was living, but not healthy. So the University of Tokyo ran
her genomic sequence through Watson and
it was able to ascertain that they were off by one thing . Actually, she had two strains
of leukemia. They did treat her and she is healthy."
"That's one example. Statistically, we're seeing that about one third of the time, Watson is
proposing an additional diagnosis."
"... Skype Translator, available in nine languages, uses artificial intelligence (AI) techniques such as deep-learning to train artificial neural networks and convert spoken chats in almost real time. The company says the app improves as it listens to more conversations. ..."
Posted by msmash on Monday December 12, 2016 @11:05AM from the worthwhile dept.
Microsoft has added the ability to use Skype Translator on calls to mobiles and landlines to its
latest Skype Preview app. From a report on ZDNet: Up until now, Skype Translator was available
to individuals making Skype-to-Skype calls. The new announcement of the expansion of Skype Translator
to mobiles and landlines
makes Skype Translator more widely available .
To test drive this, users need to be members
of the Windows Insider Program. They need to install the latest version of Skype Preview on their
Windows 10 PCs and to have Skype Credits or a subscription.
Skype Translator, available in
nine languages, uses artificial intelligence (AI) techniques such as deep-learning to train artificial
neural networks and convert spoken chats in almost real time. The company says the app improves
as it listens to more conversations.
Fund
more research in robotics and artificial intelligence in order for the U.S. to
maintain its leadership in the global technology industry. The report calls on
the government to steer that research to support a diverse workforce and to
focus on combating algorithmic bias in AI.
Invest in and increase STEM education for youth and job retraining for
adults in technology-related fields. That means offering computer science
education for all K-12 students, as well as expanding national workforce
retraining by investing six times the current amount spent to keep American
workers competitive in a global economy.
Modernize and strengthen the federal social safety net, including public
health care, unemployment insurance, welfare and food stamps. The report also
calls for increasing the minimum wage, paying workers overtime and and
strengthening unions and worker bargaining power.
The report says the government, meaning the the incoming Trump administration,
will have to forge ahead with new policies and grapple with the complexities of
existing social services to protect the millions of Americans who face
displacement by advances in automation, robotics and artificial intelligence.
The report also calls on the government to keep a close eye on fostering
competition in the AI industry, since the companies with the most data will be
able to create the most advanced products, effectively preventing new startups
from having a chance to even compete.
Back in April, Stanford University professor
Oussama Khatib led
a team of researchers on an underwater archaeological expedition, 30 kilometers off the southern
coast of France, to La Lune , King Louis XIV's sunken 17th-century flagship. Rather than
dive to the site of the wreck 100 meters below the surface, which is a very bad idea for almost
everyone, Khatib's team
brought along a custom-made humanoid submarine robot called Ocean One . In this month's issue
of
IEEE Robotics and Automation Magazine , the Stanford researchers describe in detail
how they designed and built the robot , a hybrid between a humanoid and an underwater remotely
operated vehicle (ROV), and also how they managed to send it down to the resting place of
La Lune , where it used its three-fingered hands to retrieve a vase. Most ocean-ready ROVs
are boxy little submarines that might have an arm on them if you're lucky, but they're not really
designed for the kind of fine manipulation that underwater archaeology demands. You could send
down a human diver instead, but once you get past about 40 meters, things start to get both complicated
and dangerous. Ocean One's humanoid design means that it's easy and intuitive for a human to remotely
perform delicate archeological tasks through a telepresence interface.
schwit1 notes: "Ocean One is the best name they could come up with?"
Posted by msmash on Friday November 25, 2016 @12:10AM from the interesting-things dept.
BBC has a report today in which, citing several financial institutions and analysts, it claims that
in the not-too-distant future, our fields could be tilled, sown, tended and harvested entirely by
fleets of co-operating autonomous machines by land and air. An excerpt from the article:
Driverless
tractors that can follow pre-programmed routes are already being deployed at large farms around the
world. Drones are buzzing over fields assessing crop health and soil conditions. Ground sensors are
monitoring the amount of water and nutrients in the soil, triggering irrigation and fertilizer applications.
And in Japan, the world's first entirely automated lettuce farm is due for launch next year.
The future of farming is automated
. The World Bank says we'll need to produce 50% more food by 2050 if the global population continues
to rise at its current pace. But the effects of climate change could see crop yields falling by more
than a quarter. So autonomous tractors, ground-based sensors, flying drones and enclosed hydroponic
farms could all help farmers produce more food, more sustainably at lower cost.
The truck "will travel in regular traffic, and a driver in the truck will be positioned to
intervene should anything go awry, Department of Transportation spokesman Matt Bruning said Friday,
adding that 'safety is obviously No. 1.'"
Ohio sees this route as "a corridor where new technologies can be safely tested in real-life traffic,
aided by a fiber-optic cable network and sensor systems slated for installation next year" -- although
next week the truck will also start driving on the Ohio Turnpike.
Posted by BeauHD on Friday December 02,
2016 @05:00PM from the be-afraid-very-afraid dept.
An anonymous reader quotes a report from Business Insider:
In
a column in The Guardian , the world-famous physicist wrote that "the automation of factories
has already decimated jobs in traditional manufacturing, and the
rise of artificial intelligence is likely to extend this job destruction deep into the middle
classes , with only the most caring, creative or supervisory roles remaining." He adds his
voice to a growing chorus of experts concerned about the effects that technology will have on
workforce in the coming years and decades. The fear is that while artificial intelligence will
bring radical increases in efficiency in industry, for ordinary people this will translate into
unemployment and uncertainty, as their human jobs are replaced by machines.
Automation will, "in turn will accelerate the already widening economic inequality around the
world," Hawking wrote. "The internet and the platforms that it makes possible allow very small
groups of individuals to make enormous profits while employing very few people. This is inevitable,
it is progress, but it is also socially destructive." He frames this economic anxiety as a reason
for the rise in right-wing, populist politics in the West: "We are living in a world of widening,
not diminishing, financial inequality, in which many people can see not just their standard of
living, but their ability to earn a living at all, disappearing. It is no wonder then that they
are searching for a new deal, which Trump and Brexit might have appeared to represent." Combined
with other issues -- overpopulation, climate change, disease -- we are, Hawking warns ominously,
at "the most dangerous moment in the development of humanity." Humanity must come together if
we are to overcome these challenges, he says.
"... The firm says that 44 percent of the CEOs surveyed agreed that robotics, automation and AI would reshape the future of many work places by making people "largely irrelevant." ..."
Posted by msmash on Monday December 05, 2016 @02:20PM from the shape-of-things-to-come
dept.
An anonymous reader shares a report on BetaNews:
Although artificial intelligence (AI),
robotics and other emerging technologies may reshape the world as we know it, a new global study
has revealed that the
many
CEOs now value technology over people when it comes to the future of their businesses . The study
was conducted by the Los Angeles-based management consultant firm Korn Ferry that interviewed 800
business leaders across a variety of multi-million and multi-billion dollar global organizations.
The firm says that 44 percent of the CEOs surveyed agreed that robotics, automation and AI would
reshape the future of many work places by making people "largely irrelevant."
The global managing
director of solutions at Korn Ferry Jean-Marc Laouchez explains why many CEOs have adopted this controversial
mindset, saying:
"Leaders may be facing what experts call a tangibility bias. Facing uncertainty,
they are putting priority in their thinking, planning and execution on the tangible -- what they
can see, touch and measure, such as technology instruments."
Posted by BeauHD on Tuesday
December 06, 2016 @10:30PM from the what-to-expect dept.
An anonymous reader quotes a report from
The Verge:
Microsoft
polled 17 women working in its research organization about the technology advances they expect to
see in 2017 , as well as a decade later in 2027. The researchers' predictions touch on natural
language processing, machine learning, agricultural software, and virtual reality, among other topics.
For virtual reality,
Mar Gonzalez Franco
, a researcher in Microsoft's Redmond lab, believes body tracking will improve
next year, and then over the next decade we'll have "rich multi-sensorial experiences that will be
capable of producing hallucinations which blend or alter perceives reality."
Haptic devices will
simulate touch to further enhance the sensory experience. Meanwhile,
Susan Dumais
, a scientist and deputy managing director at the Redmond lab, believes deep learning
will help improve web search results next year.
In 2027, however, the search box will disappear,
she says.
It'll be replaced by search that's more "ubiquitous, embedded, and contextually sensitive."
She says we're already seeing some of this in voice-controlled searches through mobile and smart
home devices.
We might eventually be able to look things up with either sound, images, or video.
Plus, our searches will respond to "current location, content, entities, and activities" without
us explicitly mentioning them, she says.
Of course, it's worth noting that Microsoft has been losing
the search box war to Google, so it isn't surprising that the company thinks search will die. With
global warming as a looming threat,
Asta Roseway
, principal research designer, says by 2027 famers will use AI to maintain healthy
crop yields, even with "climate change, drought, and disaster."
Low-energy farming solutions, like
vertical farming and aquaponics, will also be essential to keeping the food supply high, she says. You can view all 17 predictions
here
"... Efforts which led to impoverishment of lower 80% the USA population with a large part of the US population living in a third world country. This "third world country" includes Wal-Mart and other retail employees, those who have McJobs in food sector, contractors, especially such as Uber "contractors", Amazon packers. This is a real third world country within the USA and probably 50% population living in it. ..."
"... While conversion of electricity supply from coal to wind and solar was more or less successful (much less then optimists claim, because it requires building of buffer gas powered plants and East-West high voltage transmission lines), the scarcity of oil is probably within the lifespan of boomers. Let's say within the next 20 years. That spells deep trouble to economic growth as we know it, even with all those machinations and number racket that now is called GDP (gambling now is a part of GDP). And in worst case might spell troubles to capitalism as social system, to say nothing about neoliberalism and neoliberal globalization. The latter (as well as dollar hegemony) is under considerable stress even now. But here "doomers" were wrong so often in the past, that there might be chance that this is not inevitable. ..."
"... Shale gas production in the USA is unsustainable even more then shale oil production. So the question is not if it declines, but when. The future decline (might be even Seneca Cliff decline) is beyond reasonable doubt. ..."
"What is good for wall st. is good for America". The remains of the late 19th century anti
trust/regulation momentum are democrat farmer labor wing in Minnesota, if it still exists. An
example: how farmers organized to keep railroads in their place. Today populists are called deplorable,
before they ever get going.
And US' "libruls" are corporatist war mongers.
Used to be the deplorable would be the libruls!
Division!
likbez -> pgl...
I browsed it and see more of less typical pro-neoliberal sentiments, despite some critique
of neoliberalism at the end.
This guy does not understand history and does not want to understand. He propagates or invents
historic myths. One thing that he really does not understand is how WWI and WWII propelled the
USA at the expense of Europe. He also does not understand why New Deal was adopted and why the
existence of the USSR was the key to "reasonable" (as in "not self-destructive" ) behaviour of
the US elite till late 70th. And how promptly the US elite changed to self-destructive habits
after 1991. In a way he is a preacher not a scientist. So is probably not second rate, but third
rate thinker in this area.
While Trump_vs_deep_state (aka "bastard neoliberalism") might not be an answer to challenges the USA is
facing, it is definitely a sign that "this time is different" and at least part of the US elite
realized that it is too dangerous to kick the can down the road. That's why Bush and Clinton political
clans were sidelined this time.
There are powerful factors that make the US economic position somewhat fragile and while Trump
is a very questionable answer to the challenges the USA society faces, unlike Hillary he might
be more reasonable in his foreign policy abandoning efforts to expand global neoliberal empire
led by the USA.
Efforts which led to impoverishment of lower 80% the USA population with a large part of
the US population living in a third world country. This "third world country" includes Wal-Mart
and other retail employees, those who have McJobs in food sector, contractors, especially such
as Uber "contractors", Amazon packers. This is a real third world country within the USA and probably
50% population living in it.
Add to this the decline of the US infrastructure due to overstretch of imperial building efforts
(which reminds British empire troubles).
I see several factors that IMHO make the current situation dangerous and unsustainable, Trump
or no Trump:
1. Rapid growth of population. The US population doubled in less them 70 years. Currently
at 318 million, the USA is the third most populous country on earth. That spells troubles for
democracy and ecology, to name just two. That might also catalyze separatists movements with two
already present (Alaska and Texas).
2. Plato oil. While conversion of electricity supply from coal to wind and solar
was more or less successful (much less then optimists claim, because it requires building of buffer
gas powered plants and East-West high voltage transmission lines), the scarcity of oil is probably
within the lifespan of boomers. Let's say within the next 20 years. That spells deep trouble to
economic growth as we know it, even with all those machinations and number racket that now is
called GDP (gambling now is a part of GDP). And in worst case might spell troubles to capitalism
as social system, to say nothing about neoliberalism and neoliberal globalization. The latter
(as well as dollar hegemony) is under considerable stress even now. But here "doomers" were wrong
so often in the past, that there might be chance that this is not inevitable.
3. Shale gas production in the USA is unsustainable even more then shale oil production.
So the question is not if it declines, but when. The future decline (might be even Seneca
Cliff decline) is beyond reasonable doubt.
4. Growth of automation endangers the remaining jobs, even jobs in service sector .
Cashiers and waiters are now on the firing line. Wall Mart, Shop Rite, etc, are already using
automatic cashiers machines in some stores. Wall-Mart also uses automatic machines in back office
eliminating staff in "cash office".
Waiters might be more difficult task but orders and checkouts are computerized in many restaurants.
So the function is reduced to bringing food. So much for the last refuge of recent college graduates.
The successes in speech recognition are such that Microsoft now provides on the fly translation
in Skype. There are also instances of successful use of computer in medical diagnostics.
https://en.wikipedia.org/wiki/Computer-aided_diagnosis
IT will continue to be outsourced as profits are way too big for anything to stop this trend.
"... Companies can now test self-driving cars on Michigan public roads without a driver or steering wheel under new laws that could push the state to the forefront of autonomous vehicle development. ..."
Posted by msmash on Friday December 09, 2016 @01:00PM from the it's-coming dept.
Companies
can now test self-driving cars on Michigan public roads without a driver or steering wheel under
new laws that could push the state to the forefront of autonomous vehicle development.
From a report
on ABC:
The package of bills signed into law Friday comes with few specific state regulations
and leaves many decisions up to automakers and companies like Google and Uber. It also allows automakers
and tech companies to run autonomous taxi services and
permits test parades of self-driving tractor-trailers as long as humans are in each truck
. And
they allow the sale of self-driving vehicles to the public once they are tested and certified, according
to the state. The bills allow testing without burdensome regulations so the industry can move forward
with potential life-saving technology, said Gov. Rick Snyder, who was to sign the bills. "It makes
Michigan a place where particularly for the auto industry it's a good place to do work," he said.
DeepMind, which was acquired by Google for $400 million in 2014, announced
on Monday that it is open-sourcing its "Lab" from this week onwards so that others can try and make
advances in the notoriously complex field of AI.
The company says that the DeepMind Lab, which it
has been using internally for some time, is a 3D game-like platform tailored for agent-based AI research.
[...]
The DeepMind Lab aims to combine several different AI research areas into one environment.
Researchers will be able to test their AI agent's abilities on navigation, memory, and 3D vision,
while determining how good they are at planning and strategy.
(nypost.com)
139
Posted by
BeauHD
on Friday December 09, 2016 @09:45PM
from the
hazmat-suit
dept.
An anonymous reader quotes a report from New York Post:
Radiation from
Japan's 2011 Fukushima nuclear disaster
has apparently traveled across the Pacific
. Researchers reported that
radioactive matter -- in the form of an isotope known as cesium-134 -- was
collected in seawater samples from Tillamook Bay and Gold Beach in Oregon. The
levels
were extremely low
, however, and don't pose a threat to humans or the
environment. In 2011, a 9.0-magnitude earthquake triggered a wave of tsunamis
that caused colossal damage to Japan's Fukushima Daiichi nuclear power plant.
The disaster released several radioactive isotopes -- including the dangerous
fission products of cesium-137 and iodine-131 -- that contaminated the air and
water. The ocean was later contaminated by the radiation. But cesium-134 is the
fingerprint of Fukushima due to its short half-life of two years, meaning the
level is cut in half every two years. Cesium-137 has a 30-year half-life.
Particles from Chernobyl, nuclear weapons tests, and discharge from other
nuclear power plants are still detectable -- in small, harmless amounts. While
this is the first time cesium-134 has been detected on US shores, Higley said
"really tiny quantities" have previously been found in albacore tuna. The
Oregon samples were collected by the Woods Hole Oceanographic Institution in
January and February. Each sample measured 0.3 becquerels, a unit of
radioactivity, per cubic meter of cesium-134 -- significantly lower than the 50
million becquerels per cubic meter measured in Japan after the disaster.
(bbc.com)
302
Posted by
BeauHD
on Monday November 28, 2016 @09:05PM
from the
unintended-consequences
dept.
An anonymous reader quotes a report from BBC:
Japan's government estimates
the cost of cleaning up radioactive contamination and compensating victims of
the 2011 Fukushima nuclear disaster
has more than doubled
,
reports say. The latest estimate from the trade ministry put the expected cost
at some 20 trillion yen ($180 billion). The original estimate was for $50
billion, which was increased to $100 billion three years later. The majority of
the money will go towards compensation, with decontamination taking the next
biggest slice. Storing the contaminated soil and decommissioning are the two
next greatest costs. The compensation pot has been increased by about 50% and
decontamination estimates have been almost doubled. The BBC's Japan
correspondent, Rupert Wingfield-Hayes, says it is still unclear who is going to
pay for the clean up. Japan's government has long promised that Tokyo Electric
Power, the company that owns the plant, will eventually pay the money back. But
on Monday it admitted that electricity consumers would be forced to pay a
portion of the clean up costs through higher electricity bills. Critics say
this is effectively a tax on the public to pay the debt of a private
electricity utility.
"... The matter with ATT was originally made public in 2014 and also involved two companies that actually applied the unauthorized charges, Tatto and Acquinity. ..."
"Through the FTC's refund program, nearly 2.5 million current ATT customers will receive
a credit on their bill within the next 75 days, and more than 300,000 former customers will receive
a check. The average refund amount is $31. [...] According to the FTC's complaint, ATT placed
unauthorized third-party charges on its customers' phone bills, usually in amounts of $9.99 per
month, for ringtones and text message subscriptions containing love tips, horoscopes, and 'fun
facts.' The FTC alleged that ATT kept at least 35 percent of the charges it imposed on its customers."
The matter with ATT was originally made public in 2014 and also involved two companies that
actually applied the unauthorized charges, Tatto and Acquinity.
"... The Democratic Party as a Party (Sanders was an outlier) has nothing to do with "fair and equal
play for all". This is a party of soft neoliberals and it adheres to Washington consensus no less then
Republicans. https://en.wikipedia.org/wiki/Washington_Consensus ..."
"... If you read the key postulates it is clear that that they essentially behaved like an occupier
in this country. In this sense "Occupy Wall street" movement should actually be called "Liberation from
Wall Street occupation" movement. ..."
"... Bill Clinton realized that he can betray working class with impunity as "they have nowhere
to go" and will vote for Democrat anyway. In this sense Bill Clinton is a godfather of the right wing
nationalism in the USA. He sowed the "Teeth's of Dragon" and now we have, what we have. ..."
You guys should wake up and smell what country you live in. Here is a good place to start.
"Campaigning for president in 1980, Ronald Reagan told stories of Cadillac-driving "welfare
queens" and "strapping young bucks" buying T-bone steaks with food stamps. In trumpeting these
tales of welfare run amok, Reagan never needed to mention race, because he was blowing a dog
whistle: sending a message about racial minorities inaudible on one level, but clearly heard
on another. In doing so, he tapped into a long political tradition that started with George
Wallace and Richard Nixon, and is more relevant than ever in the age of the Tea Party and the
first black president.
In Dog Whistle Politics, Ian Haney L?pez offers a sweeping account of how politicians and
plutocrats deploy veiled racial appeals to persuade white voters to support policies that favor
the extremely rich yet threaten their own interests. Dog whistle appeals generate middle-class
enthusiasm for political candidates who promise to crack down on crime, curb undocumented immigration,
and protect the heartland against Islamic infiltration, but ultimately vote to slash taxes
for the rich, give corporations regulatory control over industry and financial markets, and
aggressively curtail social services. White voters, convinced by powerful interests that minorities
are their true enemies, fail to see the connection between the political agendas they support
and the surging wealth inequality that takes an increasing toll on their lives. The tactic
continues at full force, with the Republican Party using racial provocations to drum up enthusiasm
for weakening unions and public pensions, defunding public schools, and opposing health care
reform.
Rejecting any simple story of malevolent and obvious racism, Haney L?pez links as never
before the two central themes that dominate American politics today: the decline of the middle
class and the Republican Party's increasing reliance on white voters. Dog Whistle Politics
will generate a lively and much-needed debate about how racial politics has destabilized the
American middle class -- white and nonwhite members alike."
Reading the above posts I am reminded that in November there was ONE Election with TWO Results:
Electoral Vote for Donald Trump by the margin of 3 formerly Democratic Voting states Michigan,
Ohio, and Pennsylvania
Popular Vote for Hillary Clinton by over 2.8 Million
The Democratic Party and its Candidates OBVIOUSLY need to get more votes in the Electoral States
that they lost in 2016, not change what they stand for, the principles of fair and equal play
for all.
And, in the 3 States that turned the Electoral Vote in Trump's favor and against Hillary, all
that is needed are 125,000 or more votes, probably fewer, and the DEMS win the Electoral vote
big too.
It is not any more complex than that.
So how does the Democratic Party get more votes in those States?
PANDER to their voters by delivering on KISS, not talking about it.
That is create living wage jobs and not taking them away as the Republican Party of 'Free Trade'
and the Clinton Democratic Party 'Free Trade' Elites did.
Understand this: It is not the responsibility of the USA, or in its best interests, to create
jobs in other nations (Mexico, Japan, China, Canada, Israel, etc.) that do not create jobs in
the USA equivalently, especially if the gain is offset by costly overseas confrontations and involvements
that would not otherwise exist.
"The Democratic Party and its Candidates OBVIOUSLY need to get more votes in the Electoral
States that they lost in 2016, not change what they stand for, the principles of fair and equal
play for all. "
The Democratic Party as a Party (Sanders was an outlier) has nothing to do with "fair and
equal play for all". This is a party of soft neoliberals and it adheres to Washington consensus
no less then Republicans.
https://en.wikipedia.org/wiki/Washington_Consensus
If you read the key postulates it is clear that that they essentially behaved like an occupier
in this country. In this sense "Occupy Wall street" movement should actually be called "Liberation
from Wall Street occupation" movement.
Bill Clinton realized that he can betray working class with impunity as "they have nowhere
to go" and will vote for Democrat anyway. In this sense Bill Clinton is a godfather of the right
wing nationalism in the USA. He sowed the "Teeth's of Dragon" and now we have, what we have.
Progressives have already homed in on Republican efforts to privatize Medicare as
one of the major domestic political battles of 2017. If Donald J. Trump decides
to gut the basic guarantee of Medicare and revamp its structure so that it hurts
older and sicker people, Democrats must and will
push back hard
. But if Democrats focus too much of their attention on
Medicare, they may inadvertently assist the quieter war on Medicaid - one that
could deny health benefits to millions of children, seniors, working families and
people with disabilities.
Of the two battles, the Republican effort to dismantle Medicaid is more certain.
Neither Mr. Trump nor Senate Republicans may have the stomach to fully own the
political risks of Medicare privatization. But not only have Speaker Paul D. Ryan
and Tom Price, Mr. Trump's choice for secretary of health and human services,
made proposals to deeply cut Medicaid through arbitrary block grants or "per
capita caps," during the campaign, Mr. Trump has also proposed block grants.
If Mr. Trump chooses to oppose his party's Medicare proposals while pushing
unprecedented cuts to older people and working families in other vital safety-net
programs, it would play into what seems to be an emerging strategy of his: to
publicly fight a few select or symbolic populist battles in order to mask an
overall economic and fiscal strategy that showers benefits on the most well-off
at the expense of tens of millions of Americans.
Without an intense focus by progressives on the widespread benefits of Medicaid
and its efficiency, it will be too easy for Mr. Trump to market the false notion
that Medicaid is a bloated, wasteful program and that such financing caps are
means simply to give states more flexibility while "slowing growth." Medicaid's
actual spending per beneficiary has, on average, grown about 3 percentage points
less each year than it has for those with private health insurance,
according to the Center on Budget and Policy Priorities
- a long-term trend
that is projected to continue. The arbitrary spending caps proposed by Mr. Price
and Mr. Ryan would cut Medicaid to the bone, leaving no alternative for states
but to impose harsh cuts in benefits and coverage.
Mr. Price's own proposal, which he presented as the chairman of the House budget
committee, would cut Medicaid by about $1 trillion over the next decade. This is on
top of the reduction that would result from the repeal of the Affordable Care Act,
which both Mr. Trump and Republican leaders have championed. Together, full repeal
and block granting would cut Medicaid and the Children's Health Insurance Program
funding by about $2.1 trillion over the next 10 years - a 40 percent cut.
Photo
Tom Price, President-elect Trump's choice for secretary of
health and human services, has made proposals to deeply cut Medicaid.
Credit
Joshua Roberts/Reuters
Even without counting the repeal of the A.C.A. coverage expansion, the Price plan
would cut remaining federal Medicaid spending by $169 billion - or one-third - by the
10th year of his proposal, with the reductions growing more severe thereafter. The
Henry J. Kaiser Family Foundation
estimated
that a similar Medicaid block grant proposed by Mr. Ryan in 2012 would
lead to 14 million to 21 million Americans' losing their Medicaid coverage by the
10th year, and that is on top of the 13 million who would lose Medicaid or children's
insurance program coverage under an A.C.A. repeal.
The emerging Republican plan to "repeal, delay and replace" the A.C.A. seeks to
further camouflage these harmful cuts. Current Republican plans to eliminate the
marketplace subsidies and A.C.A. Medicaid expansion in 2019 would create a health
care cliff where all of the Medicaid funds and subsidies for the A.C.A. expansion
would simply disappear and 30 million people would lose their health care.
In the face of such a manufactured crisis, the Trump administration could cynically
claim to be increasing Medicaid funding by offering governors a small fraction of the
existing A.C.A. expansion back as part of a block grant. No one should be deceived.
Maintaining a small fraction of the current Medicaid expansion within a tightly
constrained block grant is not an increase.
Some might whisper that these cuts would be harder to beat back because their impact
would fall on those with the least political power. Sweeping cuts to Medicaid would
hurt tens of millions of low-income and middle-income families who had a family
member with a disability or were in need of nursing home care. About 60 percent of
the costs of traditional Medicaid come from providing nursing home care and other
types of care for the elderly and those with disabilities.
While Republicans resist characterizations of their block grant or cap proposals as
tearing away health benefits from children, older people in nursing homes or
middle-class families heroically coping with children with serious disabilities, the
tyranny of the math does not allow for any other conclusion. If one tried to cut off
all 30 million poor kids now enrolled in Medicaid, it would save 19 percent of the
program's spending. Among the Medicaid programs at greatest risk would be those
optional state programs that seek to help middle-income families who become
"medically needy" because of the costs of having a child with a serious disability
like autism or Down syndrome.
Democrats at all levels of government must aggressively communicate the degree to
which these anodyne-sounding proposals would lead to an assault on health care for
those in nursing homes and for working families straining to deal with a serious
disability, as well as for the poorest Americans. With many Republican governors and
local hospitals also likely to be victimized by the proposals of Mr. Ryan and Mr.
Price, this fight can be both morally right and
politically powerful
. Republicans hold only a slight majority in the Senate. It
would take only three Republican senators thinking twice about the wisdom of block
grants and per capita caps to put a halt to the coming war on Medicaid.
Gene B. Sperling was director of the National Economic Council from 1996 to
2001 and from 2011 until 2014.
December U.S. light-vehicle sales are forecast to finish strong enough for
2016 to top 2015's record 17.396 million units. However, actual volume
largely will be determined by results in the final third of the month,
because a major portion of December's deliveries typically occur after
Christmas.
The forecast
17.7 million-unit seasonally adjusted annual rate
is
below November's 17.8 million, but above December 2015's 17.4 million.
...
Despite the drop in December's volume, total 2016 sales will end at 17.41
million units, barely edging out the all-time high set last year.
emphasis added
Here is a table (source: BEA) showing the 5 top years for light vehicle sales
through November, and the top 5 full years. 2016 will probably finish in the
top 3, and could be the best year ever - just beating last year.
Light Vehicle Sales, Top 5 Years and Through November
"You control the message, and the facts do not matter. "
Notable quotes:
"... That's funny. Neoliberals are closet Trotskyites and they will let you talk only is specially
designated reservations, which are irrelevant (or, more correctly, as long as they are irrelevant) for
swaying the public opinion. ..."
"... If you think they are for freedom of the press, you are simply delusional. They are for freedom
of the press for those who own it. ..."
"... Try to get dissenting views to MSM or academic magazines. Yes, they will not send you to GULAG,
but the problem is that ostracism works no less effectively. That the essence of "inverted totalitarism"
(another nickname for neoliberalism). You can substitute physical repression used in classic totalitarism
with indirect suppression of dissenting opinions with the same, or even better results. Note that even
the term "neoliberalism" is effectively censored and not used by MSM. ..."
"... And the resulting level of suppressing of opposition (which is the essence of censorship) is
on the level that would make the USSR censors blush. And if EconomistView gets too close to anti-neoliberal
platform it will instantly find itself in the lists like PropOrNot ..."
"Then of course, it is easy to attack the neoliberals, they'll actually let you talk."
That's funny. Neoliberals are closet Trotskyites and they will let you talk only is specially
designated reservations, which are irrelevant (or, more correctly, as long as they are irrelevant)
for swaying the public opinion.
They are all adamant neo-McCarthyists, if you wish and will label you Putin stooge in no time
[, if you try to escape the reservation].
If you think they are for freedom of the press, you are simply delusional. They are for
freedom of the press for those who own it.
Try to get dissenting views to MSM or academic magazines. Yes, they will not send you to
GULAG, but the problem is that ostracism works no less effectively. That the essence of "inverted
totalitarism" (another nickname for neoliberalism). You can substitute physical repression used
in classic totalitarism with indirect suppression of dissenting opinions with the same, or even
better results. Note that even the term "neoliberalism" is effectively censored and not used by
MSM.
See Sheldon Wolin writings about this.
And the resulting level of suppressing of opposition (which is the essence of censorship)
is on the level that would make the USSR censors blush. And if EconomistView gets too close to
anti-neoliberal platform it will instantly find itself in the lists like PropOrNot
"... Someone needs to buy Paul Krugman a one way ticket to Camden and have him hang around the devastated post-industrial hell scape his policies helped create. ..."
"... Krugman should be temporarily barred from public discourse until he apologizes for pushing NAFTA and all the rest. Hundreds of millions of people were thrust into dire poverty because of the horrible free trade policies he and 99.9% of US economists pushed. ..."
"... Extremes meet: extreme protectionism is close to extreme neoliberal globalization in the level of devastation, that can occur. ..."
"... But please do not forget that Krugman is a neoliberal stooge and this is much worse then being protectionist. This is close to betrayal of the nation you live it, people you live with, if you ask me. ..."
"... To me academic neoliberals after 2008 are real "deplorables". And should be treated as such, despite his intellect. There not much honor in being an intellectual prostitute of financial oligarchy that rules the country. ..."
Economists are still oblivious to the devastation created by 40 years of free trade.
Someone needs to buy Paul Krugman a one way ticket to Camden and have him hang around the
devastated post-industrial hell scape his policies helped create.
Krugman should be temporarily barred from public discourse until he apologizes for pushing
NAFTA and all the rest. Hundreds of millions of people were thrust into dire poverty because of
the horrible free trade policies he and 99.9% of US economists pushed.
They have learned nothing and they have forgotten much.
Oh yea - bring on the tariffs which will lead to a massive appreciation of the dollar. Which in
turn will lead to massive reductions in US exports. I guess our new troll is short selling Boeing.
likbez -> pgl, -1
I tend to agree with you. Extremes meet: extreme protectionism is close to extreme neoliberal
globalization in the level of devastation, that can occur.
But please do not forget that Krugman is a neoliberal stooge and this is much worse then
being protectionist. This is close to betrayal of the nation you live it, people you live with,
if you ask me.
To me academic neoliberals after 2008 are real "deplorables". And should be treated as
such, despite his intellect. There not much honor in being an intellectual prostitute of financial
oligarchy that rules the country.
(cnn.com)
255
Posted by EditorDavid
on Sunday December 18, 2016 @12:34PM
from the
eat-different
dept.
An anonymous reader writes:
Apple has been
ordered to cut a $2 million check
for denying some of its retail workers
meal breaks. The lawsuit was first filed in 2011 by four Apple employees in San
Diego. They alleged that the company failed to give them meal and rest breaks
[as required by California law], and didn't pay them in a timely manner, among
other complaints. In 2013, the case became a class action lawsuit that included
California employees who had worked at Apple between 2007 and 2012,
approximately 21,000 people...
The complaint says Apple's culture of secrecy keeps employees from talking
about the company's poor working conditions. "If [employees] so much as discuss
the various labor policies, they run the risk of being fired, sued or
disciplined."
Apple changed their break policy in 2012, according to CNN, which reports that
the second half of the case should conclude later this week. The employees that
had been affected by Apple's original break policy could get as much as $95
each from Friday's settlement, according to CNN, "but it's likely some of the
money will go toward attorney fees."
(washingtonpost.com)
497
Posted by
BeauHD
on Thursday December 08, 2016 @10:30PM
from the
live-long-and-prosper
dept.
An anonymous reader quotes a report from Washington Post:
For the first time
in more than two decades,
life expectancy for Americans declined last year
(Warning: may be paywalled;
alternate source
) -- a troubling development linked to a panoply of
worsening health problems in the United States.
In all, death rates
rose for eight of the top 10 leading causes of death. The new report raises the
possibility that major illnesses may be eroding prospects for an even wider
group of Americans. Its findings show increases in "virtually every cause of
death. It's all ages," said David Weir, director of the health and retirement
study at the Institute for Social Research at the University of Michigan. Over
the past five years, he noted, improvements in death rates were among the
smallest of the past four decades. "There's this just across-the-board
[phenomenon] of not doing very well in the United States." Overall, life
expectancy fell by one-tenth of a year, from 78.9 in 2014 to 78.8 in 2015,
according to the latest data. The last time U.S. life expectancy at birth
declined was in 1993, when it dropped from 75.6 to 75.4, according to World
Bank data. The overall death rate rose 1.2 percent in 2015, its first uptick
since 1999. More than 2.7 million people died, about 45 percent of them from
heart disease or cancer.
"At least three tents have been spotted in woodland beside the online retail
giant's base," reports a Scottish newspaper -- hidden behind trees, but within
sight of Amazon's warehouse, and right next to a busy highway.
An anonymous
reader writes:
Despite Scotland's "bitterly cold winter nights" -- with lows
in the 30s -- the tent "
was
easier and cheaper than commuting from his home
," one Amazon worker told
the
Courier
. (Though yesterday someone stole all of his camping
equipment.)
Amazon charges its employees for shuttle service to the fulfillment
center, which "swallows up a lot of the weekly wage," one political party
leader told the
Courier
, "forcing people to seek ever more desperate
ways of making work pay.
"Amazon should be ashamed that they pay their workers so little that they have
to camp out in the dead of winter to make ends meet..." he continued. "They pay
a small amount of tax and received millions of pounds from the Scottish
National Party Government, so the least they should do is pay the proper living
wage." Though the newspaper reports that holiday shopping has created 4,000
temporary jobs in the small town of Dunfermline,
The
Disney IT employees, said Sara Blackwell, a Florida labor attorney who is
representing this group, "lost their jobs when their jobs were outsourced to
contracting companies. And those companies brought in mostly, or virtually all,
non-American national origin workers," she said. The lawsuit alleges that
Disney terminated the employment of the plaintiffs "based solely on their
national origin and race, replacing them with Indian nationals." The people who
were laid off were multiple races, but the people who came in were mostly one
race, said Blackwell. The lawsuit alleges that Disney terminated the employment
of the plaintiffs "based solely on their national origin and race, replacing
them with Indian nationals."
"As companies tighten their purse strings, they're spreading out their hires --
this year, and for years to come," reports Backchannel, citing interviews with
executives and other workplace analysts.
mirandakatz
writes:
Once a
cost-cutting strategy,
remote offices are becoming the new normal
: from GitHub to Mozilla and
Wordpress, more and more companies are eschewing the physical office in favor
of systems that allow employees to live out their wanderlust. As workplaces
increasingly go remote, they're adopting tools to keep employees connected and
socially fulfilled -- as Mozilla Chief of Staff David Slater tells Backchannel,
"The wiki becomes the water cooler."
The article describes budget-conscious startups realizing they can cut their
overhead and choose from talent located anywhere in the world. And one group of
analysts calculated that the number of telecommuting workers
doubled
between 2005 and 2014
, reporting that now "75% of employees who work from
home earn over $65,000 per year, putting them in the upper 80th percentile of
all employees, home or office-based."
Are Slashdot's readers seeing a surge in
telecommuting? And does anybody have any good stories about the digital nomad
lifestyle?
Posted by msmash
on Tuesday November 29, 2016 @11:40AM
from the
fight-for-money
dept.
Uber drivers will join forces with fast food, home care and airport workers in
a nationwide protest on Tuesday.
Their demand: higher pay
.
From a report on CNET:
Calling it the "Day of
Disruption," drivers for the ride-hailing company in two dozen cities,
including Boston, Chicago, Los Angeles and San Francisco, will march at
airports and in shopping areas carrying signs that read, "Your Uber Driver is
Arriving Striking." The protest underscores the dilemma Uber faces as it
balances the needs of its drivers with its business. Valued at $68 billion,
Uber is the highest-valued venture-backed company worldwide. But as it has cut
the cost of rides to compete with traditional taxi services, Uber reportedly
has experienced trouble turning a profit.
Unlike many other workers involved in
Tuesday's protests, Uber drivers are not members of a union. In fact, Uber
doesn't even classify its drivers as employees. Instead the company considers
drivers independent contractors. This classification means the company isn't
responsible for many costs, including health insurance, paid sick days, gas,
car maintenance and much more.
However, Uber still sets drivers' rates and the
commission it pays itself, which ranges between 20 percent and 30 percent.
"I'd
like a fair day's pay for my hard work," Adam Shahim, a 40-year-old driver from
Pittsburgh, California, said in a statement.
"So I'm joining with the
fast-food, airport, home care, child care and higher education workers who are
leading the way and showing the country how to build an economy that works for
everyone, not just the few at the top."
"... Uber treats its drivers as Victorian-style "sweated labor", with some taking home less than the minimum wage, ..."
"... Drivers at the taxi-hailing app company reported feeling forced to work extremely long hours, sometimes more than 70 a week , just to make a basic living, said Frank Field, the Labor MP and chair of the work and pensions committee. ..."
"... Field received testimony from 83 drivers who said they often took home significantly less than the "national living wage" after paying their running costs. The report says they described conditions that matched the Victorian definition of sweated labor: "when earnings were barely sufficient to sustain existence, hours of labor were such as to make lives of workers periods of ceaseless toil; and conditions were injurious to the health of workers and dangerous to the public. ..."
"... Uber controls what the drivers charge, what they drive (minimum standards and all) and punishes them if they don't work when told to (by locking them out of the app for declining low paying rides). That's not a contract gig, that's employment. ..."
"... the math on the purchase of the car doesn't work out. ..."
"... That's the essence of modern American Slavery. Nobody's _ever_ forcing you. You're completely free to starve to death and die in the streets. It's why the South abandoned real slavery. Wage Slavery is ever so much more cost effective. ..."
"... The aristocrats of our age are as detached from reality as the French aristocrats were, and as unwilling to accept the responsibilities that come with vast accrual of wealth. ..."
"... The key is to run a business that is profitable enough to pay its workers a wage sufficient to cover food and medical and housing. Otherwise, my tax money does it and those dollars essentially make the business owner a welfare recipient by enabling him to be artificially enriched. ..."
Posted by msmash on Friday December 09, 2016 @05:40PM from the app-economy dept.
Uber treats its drivers as Victorian-style "sweated labor", with some taking home less than the minimum
wage, according to a report into its working conditions based on the testimony of dozens of drivers.
From a report on The Guardian:
Field received testimony from 83 drivers who said they often took home significantly less than
the "national living wage" after paying their running costs. The report says they described conditions
that matched the Victorian definition of sweated labor: "when earnings were barely sufficient to
sustain existence, hours of labor were such as to make lives of workers periods of ceaseless toil;
and conditions were injurious to the health of workers and dangerous to the public."
rsilvergun ( 571051 ) on Friday December 09, 2016 @06:13PM (#53456097)
Au contre mon cheri (Score:2)
they realized the exact opposite. Pity you didn't.
Uber controls what the drivers charge, what they drive (minimum standards and all) and
punishes them if they don't work when told to (by locking them out of the app for declining
low paying rides). That's not a contract gig, that's employment.
fluffernutter ( 1411889 ) on Friday December 09, 2016 @06:54PM (#53456365)
Re:Was never meant to be full time... (Score:2)
I think then the whole problem is that the math on the purchase of the car doesn't work
out. They have to work a lot of hours to make anything once the vehicle expenses are
taken care of.
MightyMartian ( 840721 ) on Friday December 09, 2016 @06:42PM (#53456283) Journal
Re:Tough shit (Score:3)
Even brilliant people can find themselves out of work, and become prey for pretty predatory
companies happy to take advantage of them. I've worked in the employment industry for many
years and see even some pretty highly skilled people stuck in shit-ass jobs because they can't
afford to move.
That is why most jurisdictions have it least some basic level of worker protection, and why no
one seriously contemplates turning the industrialized world into a Libertarian fantasy land.
Dorianny ( 1847922 ) on Friday December 09, 2016 @07:29PM (#53456597) Journal
Re:Mixed Metaphors (Score:2)
Antoinette's expression is in reference the tyranny of feudalism.
Pretty sure Uber drivers aren't indentured servants, much less serfs. Seeing as how, you
know, if you don't want to drive for Uber, you just don't load the app. The Gendarme isn't
going to break down your door and drag you to jail.
The expression "Let them eat cake" shows a complete lack of understanding that the absence
of basic food staples was due to poverty rather than a lack of supply. Serfdom was officially
abolished in France in 1789 by Antoinette's husband Louis XVI, although this was mostly a
formality as there were few if any actual Serfs left in France.
Most people were "free peasents" that were paid extremely low wages to work the lands of
the King and Nobility FYI: Even thou the expression "Let them eat cake" is commonly attributed
to Marie Antoinette there is no record of the phrase ever being said by her...
matbury ( 3458347 ) on Friday December 09, 2016 @06:55PM (#53456367) Homepage
Re:"Feel forced?" (Score:4, Insightful)
Taxi drivers also have regulated hours. Being tired is as impairing and dangerous as being
drunk. Would you hail a cab if you knew the driver was drunk? If he's been working double the
recommended hours a week, like an Uber driver, he's likely to be severely impaired and very
likely to have an accident.
rsilvergun ( 571051 ) on Friday December 09, 2016 @06:09PM (#53456055)
Says a man or woman (Score:4, Insightful)
who's never had a rent check bounce. Or never had to pay out of pocket to fix a kid's
broken arm. Or been born in a rust belt town when the last factory just left and/or automated.
That's the essence of modern American Slavery. Nobody's _ever_ forcing you. You're
completely free to starve to death and die in the streets. It's why the South abandoned real
slavery. Wage Slavery is ever so much more cost effective.
Solandri ( 704621 ) on Friday December 09, 2016 @07:31PM (#53456603)
Re:Says a man or woman (Score:4, Interesting)
Wage slavery is never cost effective except for the slave owner. That's what makes it an
unstable system which can only be perpetuated by government collusion, or lack of willpower by
the employees to break out of slavery. e.g. Detroit used to have slave-level wages.
Henry Ford decided to set up shop there and paid his factory workers much more than the
prevailing wage. He accidentally discovered that when he paid people a fair wage, not only did
their productivity increase, but they used those wages to buy the very product they were
helping build.
The resulting feedback loop multiplied his company's revenue and turned the Ford Motor
Company into the behemoth it is today. No longer were cars affordable only to the privileged
elite; the average middle class worker (by Ford factory standards) could afford to buy one.
If the only options you see are being a wage slave or starving to death, then you haven't
really tried. A location where the people are being paid slave wages or starving is ripe for a
new company to set up shop and hire willing employees for less than they'd have to pay at
well-established locations. As more of these people become employed and spend their wages on
local merchants, the economy picks up.
There are fewer unemployed, resulting in wages increasing. This is how the market equalizes
geographic wage inequality. If this isn't happening, then there are fundamental problems with
the region not caused by slave wages. Maybe the location is too far from markets, or the
highway/railroad access is poor, or people just don't want to live in that location. Unless
the government is intentionally keeping business out, low wages are a symptom not a cause.
And yes I've had a rent check bounce. A rent check a tenant gave me. I was stupid and
deposited it directly into our payroll bank account since it almost exactly topped off the
amount we needed to make payroll. Normally I transfer the payroll money from our primary
checking account, but I was lazy and decided to save a little work by depositing the checks
directly into payroll.
As a result I got charged a bounced check fee, but more importantly a bunch of my
employees' paychecks bounced, causing more bounced check fees for both them and myself. The
whole thing was a disaster. I called in each employee who was affected, apologized to them in
person, and told them to bring in their bank statement so I could reimburse their bounced
check fee (or fees if they then wrote checks which bounced).
The ones who needed the money immediately, I paid in cash out of my own pocket. All told it
was over $1300 in bank fees incurred because I was stupid/lazy, and because the person who
wrote the first check did so knowing he didn't have enough money to cover it but thought it
would be easier turning his problem into my problem.
It's cliche, but it's true. Your employees are your most valuable asset. A good business will
do everything it can to protect them and to retain them. A business which pays slave wages is
just ripe to be squeezed out by a business which will pay better (fair) wages. The only way a
slave wage business can stay in business is if the government is blocking competing
businesses, or if people like you have so discouraged others with your gloom and doom hopeless
corporate feudalism talk that they don't even bother trying to start up their own business to
compete.
serviscope_minor ( 664417 ) on Saturday December 10, 2016 @04:50AM (#53458279) Journal
Re:Says a man or woman (Score:5, Insightful)
or lack of willpower by the employees to break out of slavery
Ah, it's the slaves fault that they're slaves, then.
If the only options you see are being a wage slave or starving to death, then you haven't
really tried. A location where the people are being paid slave wages or starving is ripe for a
new company to set up shop and hire willing employees for less than they'd have to pay at
well-established locations.
Ah yes, it's so easy to set up a company when you're a wage slave and have no spare
resources with which to set up the company. If you don't you just lack the willpower to starve
to death for a few months or years before your company takes off.
Oh and if you don't have a head for business, you deserve to be a wage slave because fuck
you that's why.
A business which pays slave wages is just ripe to be squeezed out by a business which will
pay better (fair) wages.
Oh yes, that's precisely how things worked in Victorian England.
You know, or not. that they don't even bother trying to start up their own business to
compete.
Starting a business is the highest form of intellect and worth. If you can't, then die in
filth, scum. You deserve worse!
Jzanu ( 668651 ) on Friday December 09, 2016 @06:02PM (#53456007)
Re:"Feel forced?" (Score:4, Insightful)
Step 1: Create system where I make money doing nothing, we will call this being a
platform
Step 2: Force existing systems to work for me by under cutting prices and providing a
better way to interact
Step 3: Profit
Shit, Uber makes profit by undercutting cabs who already did not make much money... You can
tell people not to drive for them, but when you see the lease terms uber demands (weekly
payments, taken directly from your take, you dont pay we take the car) then you see that they
are required to drive, and drive long hours if riders are minimal.
This is a firm that has a master plan of shifting as much as it can on to other people so its
30% cut can be 90% profit. So far its working because people with no job will work any job in
a world where unskilled labor is not worth much (driving is definitely on the unskilled labor
side here) There are simply not many other jobs out there for a subset of people.
Uber's
real business [uber.com] (see bottom of page)
model [xchangeleasing.com] is incentivizing wage-slavery with poverty wages and binding
contract enforcement - it is just the vehicular version of the
company town [wikipedia.org].
MightyMartian ( 840721 ) on Friday December 09, 2016 @07:51PM (#53456707) Journal
Re:Don't worry (Score:5, Insightful)
It will certainly be screwed if it keeps allowing corporate interests to arguing away the
taxes they should be paying.
I'm genuinely concerned that events like Brexit and the Trump victory are the opening shots in
some sort of modern day French revolution. The aristocrats of our age are as detached from
reality as the French aristocrats were, and as unwilling to accept the responsibilities that
come with vast accrual of wealth.
They are creating a dangerously unstable situation, and when the Trumps of the world prove
as incapable or unwilling to rebalance economic and social issues, then we may be facing a far
less savory group of revolutionaries. And, as the French Revolution so ably demonstrated, even
wealth isn't an absolute shield.
jlowery ( 47102 ) on Friday December 09, 2016 @06:19PM (#53456129)
Re: Don't worry (Score:5, Insightful)
The key is to run a business that is profitable enough to pay its workers a wage
sufficient to cover food and medical and housing. Otherwise, my tax money does it and those
dollars essentially make the business owner a welfare recipient by enabling him to be
artificially enriched.
If your business doesn't sell a product people are willing to spend enough for you pay your
workers a living wage, then your business should go bankrupt. I'm not paying for your beach
house.
ghoul ( 157158 ) on Friday December 09, 2016 @06:20PM (#53456149)
Uber needs a recession (Score:5, Insightful)
The Uber business model only works for newly laid off workers who have a nice car with car
payments to make. Its not meant to be a fulltime job. The entire gig economy including iOS
apps only took off as in 2008 a lot of people lost their jobs but they still had cars,
computers and loads of time on their hand. As we closer to full employment people who have a
choice have moved away from gigs. Taxi companies are built upon the exploitation of illegal
immigrant drivers. Uber as a high visibility company cannot compete with Taxi companies as it
cant hire illegal immigrants and pay them sweat wages under the table. At the same time
driving a cab will not support a minimum wage so the best thing for Uber would be to go back
to being a gig company. Put a hard cap of 10 hours a week on driving for a driver - that will
remove the entire pool of drivers expecting to make a living from Uber, stop promoting Uber
driving as a full time job and stop giving leases to drivers to buy cars to drive for Uber.
Stop trying to grow for growth's sake. Stay at the size of a gig economy company like a temp
agency. They have some good software - license it to taxi companies and let them use it for
managing their own fleets in a mutli-tenant kind of model.
"... By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street ..."
"... should head down ..."
"... not ..."
"... A population of less than 100 million in 1945 became more than 200 million in 1976 and over 320 million in 2016! Tripling your population in 70 years is a really bad idea. At this rate over a billion US citizens will exist in 2086. ..."
"... 'Merika is the third most populous nation in the world followed by Indonesia, Brazil, Pakistan and Nigeria. ..."
By Wolf Richter, a San Francisco
based executive, entrepreneur, start up specialist, and author, with extensive
international work experience. Originally published at
Wolf Street
Hardly any improvement for individuals since the Great Recession.
When Donald Trump campaigned on how "terrible" the jobs situation was, while
the Obama Administration touted the jobs growth since the employment bottom of
the Great Recession in 2010, it sounded like they were talking about two
entirely different economies at different ends of the world. But they weren't.
Statistically speaking, they were both right.
Since 2011, the US economy created 14.6 million "nonfarm payrolls" as
defined by the Bureau of Labor Statistics whether or not they're low-wage or
less than full-time jobs. But for individuals, this job market, statistically
speaking, looks almost as tough as it was during the Great Recession.
Obviously, a lot of people have found jobs, and some of them have found good
jobs since then, and there are a ton of "job openings." But the Census Bureau
just told us why the job market is still, to use Trump's term, "terrible" when
it released its
population estimates
for 2016, just before clocking out for the holidays.
According to this report: From the beginning of 2010 in terms of jobs, the
darkest days of the Great Recession through December 2016, the US "resident
population" (not counting overseas-stationed military personnel) grew by 16
million people.
But since the beginning of 2010 through November 2016, nonfarm payrolls grew
by only 13.8 million.
Note that in 2010, nonfarm payrolls declined by 900,000, after having
plunged by over 5 million in 2009. The first year with growth in nonfarm
payrolls was 2011.
The chart below shows this peculiar relationship between the "resident
population" of the US (top green line) and nonfarm payrolls (bottom blue line).
Both rose. But the bottom line (nonfarm payrolls) didn't rise nearly enough.
The difference between the two is the number of people that are
not
on nonfarm payrolls. They might be students, unemployed, retirees, or working
in a job that the "nonfarm payrolls" do not capture (more on that in a moment).
This is reflected by the red line, whose slope
should head down
in an
economy where jobs grow faster than the population:
For the first five years of this seven-year period, the number of people
not
occupying a job as captured by nonfarm payroll data, kept growing (red
numbers), even as the touted jobs growth was kicking in. Why? Because
population growth outpaced jobs growth over the five years from 2010 through
2014.
Only in 2015 and 2016 has growth in "nonfarm payrolls" edged past population
growth. Those were the only two years since the Great Recession when people on
an individual basis actually had improving chances of getting a job.
The nonfarm payrolls data is not a complete measure of the US jobs
situation. According to the
Bureau of Labor Statistics
, it excludes "proprietors, the unincorporated
self-employed, unpaid volunteer or family employees, farm employees, and
domestic employees. It also excludes military personnel, and employees of a big
part of the intelligence community, including the CIA, the NSA, the National
Imagery and Mapping Agency, and the Defense Intelligence Agency.
There are many folks who'd contend that this population growth is mostly
young people who are not yet in the work force and old people who refuse to
die, and that for working age people (say, 18 to 65), the jobs growth has been
phenomenal.
But that's not the case. According to the Census report, in 2016, the
percentage of people 18 and over grew to 249.5 million, making up 77.2% of the
total US population, up from 76.8% in 2015 (247.3 million), and up from 76.2%
in 2010! The millennials have moved into adulthood, elbowing each other while
scrambling for jobs.
And boomers are not retiring from the working life. Why should they. Many of
them are fit and don't want to sit around bored, and many of them
have to
work because they can't afford to quit working, even if they would like to. So
the number of workers 65+ has soared 45% since the end of 2009, from 6.2
million to 9.0 million. So now there are nearly 3 million more of them on
nonfarm payrolls than there had been in 2010:
The natural growth rate of the population (births minus deaths) has been
declining for years. In 2016, it dropped to 0.38%, a new low. The growth rate
from immigration, which fluctuates somewhat with the economy, edged down to
0.31%. So total population growth dropped to a new low of 0.69%. Of note: the
natural growth rate via births won't impact the labor force until the babies
are young adults. But the vast majority of new immigrants are of working age,
and they add to the labor force immediately.
So the number of jobs since 2010 has risen by 13.8 million which the
economists are endlessly touting, along with the even better sounding 14.8
million since 2011. But the population has increased by 16 million since 2010.
Most of them are people of working age, jostling for position to grab one of
these jobs that would put them on the nonfarm payrolls. And this is why the job
market for many individuals is "terrible," as Trump said.
Lambert Strether has been blogging, managing online communities, and
doing system administration 24/7 since 2003, in Drupal and WordPress.
Besides political economy and the political scene, he blogs about rhetoric,
software engineering, permaculture, history, literature, local politics,
international travel, food, and fixing stuff around the house. The nom de
plume "Lambert Strether" comes from Henry James's The Ambassadors: "Live all
you can. It's a mistake not to." You can follow him on Twitter at @lambertstrether.
http://www.correntewire.com
KK
,
December 26, 2016 at 5:55 am
A population of less than 100 million in 1945 became more than 200
million in 1976 and over 320 million in 2016! Tripling your population in 70
years is a really bad idea. At this rate over a billion US citizens will exist
in 2086.
There are resource limits to growth. And a car, house, vacation,
pension, healthcare,and large family will cease to be possible for all or even
the majority. Study how the average Indian or Chinese family live and that
albeit with a few bits of technology is the future.
A lot of "pro-natalists" are religious fundamentalists who do actually
see the population/resource crunch coming for which they are trying to
stack the numbers on their team.
But I think most of the "pro-natalists" are rich people who, more
than anything else, want cheap labor. And there is no better way to
get cheap labor than to force population growth ever higher.
We are not importing foreign workers because the natives refuse to
breed 'enough' children. The natives (of all races) are limiting their
family sizes because they are worried about having more children than
they can support, just like they did in the great depression. Left to
themselves, that would start to tighten up the labor market and
produce powerful forces raising wages. But not if we keep forcing ever
more foreign workers into the labor pool. Which is of course the whole
idea.
'Merika is the third most populous nation in the
world followed by Indonesia, Brazil, Pakistan and Nigeria.
Seems to be a mind-jarring fat to most when I bring it up .
Alot of poorer countries in the "developing world" ensured they stayed
poorer by letting their population growth get out of control. A big, if not
the main, reason for China's economic success since 1975 was in getting its
population growth under control, that is a big reason for the contrast
between China and India.
Unlike, for example, Japan, the rulers of the United States decided to
emulate the developing countries that let their populations expand too much,
importing people from the developing world to get the job done.
The planet can take care of itself. I think you mean "the key to saving
ourselves." Also I think
consumption patterns
of the
"global North" are more of a problem than simply population.
That resident population number appears to include under-16-year-olds who
are in most cases not looking for employment. I have no idea how that number
has changed. Ditto, it includes the voluntarily retired.
This article appears to be another argument for immigration. I am very much
a progressive liberal, excepting the standard progressive immigration stance
that more is better and that illegal immigration is o.k.
What would our job market look like without immigrants, even just legal
immigrants?
Between 1970 and 2014, the percentage of foreign-born workers in the
civilian labor force more than tripled, from 5 percent to 17 percent. In 2014
immigrants accounted for 17% of the work force; 27.6 million out of 159.5
million. What is that number was cut in half?
The number of US unemployed peaked in 2009 at 15,352,000. Today its
7,400,000 (if you believe the official numbers).
That means if we had cut immigration by just 30% there would be 0
unemployment. Of course this is a simplistic analysis but it is interesting to
compare the two. And of course with near 0 unemployment wages would be pushed
up.
No wonder the powers that be keep yammering about immigration but never do
anything about it. More people in the country willing to work for less money
means increased profits for the rich.
Did you not read the article or simply fail to grasp it? Richter points
out that the population has grown faster than the number of jobs and also
that immigration is the largest part of that pop. growth (especially the
adult population). He nowhere makes an argument for more illegal (or legal)
immigration.
On immigration, how about we ask ourselves why it is that so many people
are immigrating here and what we might do to discourage them? For instance,
a kind of Marshall Plan for Central and South America would probably go a
long way, as most people prefer to stay where they are from, if they can
make a reasonable life there.
Call me crazy, but considering that the Clinton campaign had access to a
certain portion of this information, their inability to understand the appeal
of Sanders and Trump is clearly delusional.
Certainly the latest data just came out, but some of this about the period
until 2014 and even a little after had to be out there. They had to know that
until recently there really were not enough jobs to go around, and that there
was a good chance that any gains in the last year or so were not enough to
remotely cover the deficit up to that point. I get they might not have had the
information that beyond not being enough most of the jobs created were part
time and benefit free. That doesn't explain not seeing and getting that most
Americans have seen little or no recovery.
It appears the DLC Democratic Party must be similar to that narrative
driven NY Times environment, you only survive if you embrace the narrative even
as the success of the enterprise you are apart loses more and more.
"It is difficult to get a man to understand something, when his salary
depends on his not understanding it."
― Upton Sinclair
All career elected politicians on both sides of the aisle are paid to not
understand the jobs problem by donors with very large wallets who do not
want the jobs problem solved. Follow the money. Who wants cheap labor and
what's the best way to get it if you can't offshore operations?
We cannot rebuild the DLC or any leftist party until we figure out how to
fund campaigns without donor money that is interested in maintaining the
status quo.
I will comment elsewhere, but I keep on hearing arguments on the lines
that if only Hillary Clinton had understood the problems of the white
working class she would have won or something along these lines.
The Trump and Sanders campaigns were protest vehicles -- and there were
precursors in previous elections -- over how the country has been run for
the past several decades. Since 1981 either the Clintons or the Bushes have
either lived in the White House or held really high ranking positions in the
US government.
Members of neither family can credibly run against globalization (or
"invade the world/ invite the world" as Steve Sailer puts it) or really
other major policies pursued by the US government since the 1980s. They own
it.
They have to run on a globalization platform. Hillary Clinton in fact did
surprisingly well at the polls, considering this.
There can be types of verbal Marshall Plans, too. Some percentage of the US
transient population has self-deported already, although likely not enough to
upset the temporary Obama Rush of 1,500+ per day streaming in to claim amnesty
prior to January 20th. Announce that undocumented entrants will be turned back,
instead of throwing benefits at them, and that will help stem the human tide.
Supplement that with specific policies to aid and abet Mexico and Central
American governments in their internal and border control efforts to stop the
human tide further south. Publicize those efforts and stick to them.
Both policies would change the dynamic and would allow some degree of US
control over its own population growth. Then put in place specific, actionable
steps to identify and facilitate thoughtful population growth to meet US needs
and to allow for legitimate humanitarian relief instead of bleeding heart
efforts that externalized ill-considered policies.
(reuters.com)
241
Posted by
BeauHD
on Tuesday December 13, 2016 @10:30PM
from the
lick-and-a-promise
dept.
IBM Chief Executive Ginni Rometty has
pledged to
"hire about 25,000 professionals in the next four years in the United States
"
as she and other technology executives prepared to meet with President-elect
Donald Trump on Wednesday. Reuters reports:
IBM had nearly 378,000 employees
at the end of 2015, according to the company's annual report. While the firm
does not break out staff numbers by country, a review of government filings
suggests IBM's U.S. workforce declined in each of the five years through 2015.
When asked why IBM planned to increase its U.S. workforce after those job cuts,
company spokesman Ian Colley said in an email that Rometty had laid out the
reasons in her USA Today piece. Her article did not acknowledge that IBM had
cut its U.S. workforce, although it called on Congress to quickly update the
Perkins Career and Technical Education Act that governs federal support for
vocational education. "We are hiring because the nature of work is evolving,"
she said. "As industries from manufacturing to agriculture are reshaped by data
science and cloud computing, jobs are being created that demand new skills --
which in turn requires new approaches to education, training and recruiting."
She said IBM intended to invest $1 billion in the training and development of
U.S. employees over the next four years. Pratt declined to say if that
represented an increase over spending in the prior four years.
(bbc.com)
243
Posted by
BeauHD
on Friday December 02, 2016 @10:30PM
from the
cease-and-desist
dept.
The mayors of four major global cities -- Paris, Mexico City, Madrid and Athens
-- announced plans to
stop the use of
all diesel-powered cars and trucks by 2025
. The leaders made their
commitments in Mexico at a
biennial meeting of
city leaders
. BBC reports:
At the C40 meeting of urban leaders in
Mexico, the four mayors declared that they would ban all diesel vehicles by
2025 and "commit to doing everything in their power to incentivize the use of
electric, hydrogen and hybrid vehicles." "It is no secret that in Mexico City,
we grapple with the twin problems of air pollution and traffic," said the
city's mayor, Miguel Angel Mancera. "By expanding alternative transportation
options like our Bus Rapid Transport and subway systems, while also investing
in cycling infrastructure, we are working to ease congestion in our roadways
and our lungs." Paris has already taken a series of steps to cut the impact of
diesel cars and trucks. Vehicles registered before 1997 have already been
banned from entering the city
, with restrictions increasing each year until
2020. The use of diesel in transport has come under increasing scrutiny in
recent years, as concerns about its impact on air quality have grown.
The World Health Organization (WHO) says that around
three
million deaths every year are linked to exposure to outdoor air pollution
.
Diesel engines contribute to the problem in two key ways -- through the
production of particulate matter (PM) and nitrogen oxides (NOx). Very fine soot
PM can penetrate the lungs and can contribute to cardiovascular illness and
death. Nitrogen oxides can help form ground level ozone and this can exacerbate
breathing difficulties, even for people without a history of respiratory
problems. The diesel ban is hugely significant. Carmakers will look at this
decision and know it's just a matter of time before other city mayors follow
suit.
"... Popular pre-financial crisis versions of the model excluded banking and finance, taking as given that finance and asset prices were merely a by-product of the real economy. ..."
"... The centre-piece of Paul Romer's scathing attack on these models is on the 'pretence of knowledge' ..."
"... he is critical of the incredible identifying assumptions and 'pretence of knowledge' in both Bayesian estimation and the calibration of parameters in DSGE models. ..."
"... A further symptom of the 'pretence of knowledge' is the assumed 'knowledge' that these parameters are constant over time. A milder critique by Olivier Blanchard (2016) points to a number of failings of DSGE models and recommends greater openness to more eclectic approaches. ..."
"... The equation is based on the assumption of inter-temporal optimising by consumers and that every consumer faces the same linear period-to-period budget constraint, linking income, wealth, and consumption. ..."
"... In the basic form, consumption every period equals permanent non-property income plus permanent property income defined as the real interest rate times the stock of wealth held by consumers at the beginning of each period. Permanent non-property income converts the variable flow of labour and transfer incomes a consumer expects over a lifetime into an amount equally distributed over time. ..."
"... However, consumers actually face idiosyncratic (household-specific) and uninsurable income uncertainty, and uncertainty interacts with credit or liquidity constraints. ..."
"... The 2000 Commodity Futures Modernization Act (CFMA) made derivatives enforceable throughout the US with priority ahead of claims by others (e.g. workers) in bankruptcy. ..."
"... 2004 SEC decision to ease capital requirements on investment banks increased gearing to what turned out to be dangerous levels ..."
"... Similar measures to lower required capital on investment grade PMBS increased leverage at commercial banks. These changes occurred in the political context of pressure to extend credit to poor. ..."
"... The importance of debt was highlighted in the debt-deflation theory of the Great Depression of Fisher (1933). 5 Briefly summarised, his story is that when credit availability expands, it raises spending, debt, and asset prices; irrational exuberance raises prices to vulnerable levels, given leverage; negative shocks can then cause falls in asset prices, increased bad debt, a credit crunch, and a rise in unemployment. ..."
"... In the financial accelerator feedback loops that operated in the US sub-prime crisis, falls in house prices increased bad loans and impaired the ability of banks to extend credit. As a result, household spending and residential investment fell, increasing unemployment and reducing incomes, feeding back further into lower asset prices and credit supply. ..."
"... The transmission mechanism that operated via consumption was poorly represented by the Federal Reserve's FRB-US model and similar models elsewhere. ..."
"... Reminds me of a young poseur at engineering school, who exclaimed during a group study session, "I've got it all jocked out. Now I just need the equations!" ..."
"... I have been aware of that for a few years now, but I doubt that one person in a hundred (or a thousand) knows when they listen to some economist on a news program or a business channel that the person speaking thinks that how much debt people have does not substantively affect their spending. ..."
"... If I used or invented an econ model that left out the "consumer", and modeled it with a "consumption agent object" having a single independent input variable being the Fed zero term, zero risk interest rate, I'd be too embarrassed to admit it. I would probably just very quietly make a career change into one of the softer sciences. Maybe writing fictional romance novels, or some such thing. ..."
"... The worst thing about these types of mea culpas from the mainstream is the cited criticisms from other mainstream economists only. It can only be a valid criticism if it was published in a mainstream journal ..."
"... That 'political pressure' turned out to be the bait and switch for a system that shifted power via debt creation. ..."
"... What we have not yet come to terms with are the implications of David Graeber's anthropological insights: how does debt affect social relationships, alter social norms, and affect relationships among individuals? ..."
"... Debt is a form of power, but by failing to factor this into their equations, the Central Bankers are missing the social, political, and cultural consequences of the profound shifts in 'credit market architecture'. In many respects, this is not about 'money'; it's about power. ..."
"... The Central Bankers' models can include all the parameters they can dream up, but until someone starts thinking more clearly about the role and function of money, and the way that 'different kinds of money' create 'different kinds of social relationships', we are all in a world of hurt. ..."
"... Now, maybe it is just a coincidence, but it is hard for me not to notice that the explosion in consumer credit matches up nicely with the rise in inequality. ..."
"... " .. debt does not make society as a whole poorer: one person's debt is another person's asset. So total wealth is unaffected by the amount of debt out there. This is, strictly speaking true only for the world economy as a whole .. " Paul Krugman "End this Depression Now". ..."
By John Muellbauer, Professor of Economics, Oxford University. Originally published at
VoxEU
The failure of the New Keynesian dynamic stochastic general equilibrium models to capture interactions
of finance and the real economy has been widely recognised since the Global Crisis. This column argues
that the flaws in these models stem from unrealistic micro-foundations for household behaviour and
from wrongly assuming that aggregate behaviour mimics a fully informed 'representative agent'. Rather
than 'one-size-fits-all' monetary and macroprudential policy, institutional differences between countries
imply major differences for monetary policy transmission and policy.
The New Keynesian DSGE models that dominated the macroeconomic profession and central bank thinking
for the last two decades were based on several principles.
The first was formal derivation from micro-foundations, assuming optimising behaviour of consumers
and firms with rational or 'model-consistent' expectations of future conditions. For such derivation
to result in a tractable model, it was assumed that the behaviour of firms and of consumers corresponded
to that of a 'representative' firm and a 'representative' consumer. In turn, this entailed the
absence of necessarily heterogeneous credit or liquidity constraints. Another important assumption
to obtain tractable solutions was that of a stable long-run equilibrium trend path for the economy.
If the economy was never far from such a path, the role of uncertainty would necessarily be limited.
Popular pre-financial crisis versions of the model excluded banking and finance, taking as
given that finance and asset prices were merely a by-product of the real economy.
Second, a competitive economy was assumed but with a number of distortions, including nominal
rigidities sluggish price adjustment and monopolistic competition. This is what distinguished
New Keynesian DSGE models from the general equilibrium real business cycle (RBC) models that preceded
them. It extended the range of stochastic shocks that could disturb the economy from the productivity
or taste shocks of the RBC model. Finally, while some models calibrated (assumed) values of the
parameters, where the parameters were estimated, Bayesian system-wide estimation was used, imposing
substantial amounts of prior constraints on parameter values deemed 'reasonable'.
The 'Pretence of Knowledge'
The centre-piece of Paul Romer's scathing attack on these models is on the 'pretence of knowledge'
(Romer 2016); echoing Caballero (2010), he is critical of the incredible identifying assumptions
and 'pretence of knowledge' in both Bayesian estimation and the calibration of parameters in DSGE
models. 1
A further symptom of the 'pretence of knowledge' is the assumed 'knowledge' that these parameters
are constant over time. A milder critique by Olivier Blanchard (2016) points to a number of failings
of DSGE models and recommends greater openness to more eclectic approaches.
Unrealistic Micro-Foundations
As explained in Muellbauer (2016), an even deeper problem, not seriously addressed by Romer or
Blanchard, lies in the unrealistic micro-foundations for the behaviour of households embodied in
the 'rational expectations permanent income' model of consumption, an integral component of these
DSGE models. Consumption is fundamental to macroeconomics both in DSGE models and in the consumption
functions of general equilibrium macro-econometric models such as the Federal Reserve's FRB-US. At
the core of representative agent DSGE models is the Euler equation for consumption, popularised in
the highly influential paper by Hall (1978). It connects the present with the future, and is essential
to the iterative forward solutions of these models. The equation is based on the assumption of
inter-temporal optimising by consumers and that every consumer faces the same linear period-to-period
budget constraint, linking income, wealth, and consumption. Maximising expected life-time utility
subject to the constraint results in the optimality condition that links expected marginal utility
in the different periods. Under approximate 'certainty equivalence', this translates into a simple
relationship between consumption at time t and planned consumption at t +1 and in periods
further into the future.
Under these simplifying assumptions, the rational expectations permanent income consumption function
can be derived. In the basic form, consumption every period equals permanent non-property income
plus permanent property income defined as the real interest rate times the stock of wealth held by
consumers at the beginning of each period. Permanent non-property income converts the variable flow
of labour and transfer incomes a consumer expects over a lifetime into an amount equally distributed
over time.
However, consumers actually face idiosyncratic (household-specific) and uninsurable income
uncertainty, and uncertainty interacts with credit or liquidity constraints. The asymmetric
information revolution in economics in the 1970s for which Akerlof, Spence and Stiglitz shared the
Nobel prize explains this economic environment. Research by Deaton (1991,1992), 2 several
papers by Carroll (1992, 2000, 2001, 2014), Ayigari (1994), and a new generation of heterogeneous
agent models (e.g. Kaplan et al. 2016) imply that household horizons then tend to be both heterogeneous
and shorter with 'hand-to-mouth' behaviour even by quite wealthy households, contradicting the
textbook permanent income model, and hence DSGE models. A second reason for the failure of these
DSGE models is that aggregate behaviour does not follow that of a 'representative agent'. Kaplan
et al. (2016) show that, with these better micro-foundations, quite different implications follow
for monetary policy than in the New Keynesian DSGE models. A third reason is that structural breaks,
as shown by Hendry and Mizon (2014), and radical uncertainty further invalidate DSGE models, illustrated
by the failure of the Bank of England's DSGE model both during and after the 2008-9 crisis (Fawcett
et al. 2015). The failure of the representative agent Euler equation to fit aggregate data 3
is further empirical evidence against the assumptions underlying the DSGE models, while evidence
on financial illiteracy (Lusardi 2016) is a problem for the assumption that all consumers optimise.
The Evolving Credit Market Architecture
Of the structural changes, the evolution and revolution of credit market architecture was the
single most important. In the US, credit card ownership and instalment credit spread between the
1960s and the 2000s; the government-sponsored enterprises Fannie Mae and Freddie Mac were recast
in the 1970s to underwrite mortgages; interest rate ceilings were lifted in the early 1980s; and
falling IT costs transformed payment and credit screening systems in the 1980s and 1990s. More revolutionary
was the expansion of sub-prime mortgages in the 2000s, driven by rise of private label securitisation
backed by credit default obligations (CDOs) and swaps.
The 2000 Commodity Futures Modernization Act (CFMA) made derivatives enforceable throughout
the US with priority ahead of claims by others (e.g. workers) in bankruptcy. This permitted
derivative enhancements for private label mortgage-backed securities (PMBS) so that they could be
sold on as highly rated investment grade securities. A second regulatory change was the deregulation
of banks and investment banks. In particular, the 2004 SEC decision to ease capital requirements
on investment banks increased gearing to what turned out to be dangerous levels and further
boosted PMBS, Duca et al (2016). Similar measures to lower required capital on investment grade
PMBS increased leverage at commercial banks. These changes occurred in the political context of pressure
to extend credit to poor.
The Importance of Debt
A fourth reason for the failure of the New Keynesian DSGE models, linking closely with the previous,
is the omission of debt and household balance sheets more generally, which are crucial for understanding
consumption and macroeconomic fluctuations. Some central banks did not abandon their large non-DSGE
econometric policy models, but these were also defective in that they too relied on the representative
agent permanent income hypothesis which ignored shifts in credit constraints and mistakenly lumped
all elements of household balance sheets, debt, liquid assets, illiquid financial assets (including
pension assets) and housing wealth into a single net worth measure of wealth. 4 Because
housing is a consumption good as well as an asset, consumption responds differently to a rise in
housing wealth than to an increase in financial wealth (see Aron et al. 2012). Second, different
assets have different degrees of 'spendability'. It is indisputable that cash is more spendable than
pension or stock market wealth, the latter being subject to asset price uncertainty and access restrictions
or trading costs. This suggests estimating separate marginal propensities to spend out of liquid
and illiquid financial assets. Third, the marginal effect of debt on spending is unlikely just to
be minus that of either illiquid financial or housing wealth. The reason is that debt is not subject
to price uncertainty and it has long-term servicing and default risk implications, with typically
highly adverse consequences.
The importance of debt was highlighted in the debt-deflation theory of the Great Depression
of Fisher (1933). 5 Briefly summarised, his story is that when credit availability expands,
it raises spending, debt, and asset prices; irrational exuberance raises prices to vulnerable levels,
given leverage; negative shocks can then cause falls in asset prices, increased bad debt, a credit
crunch, and a rise in unemployment.
In the 1980s and early 1990s, boom-busts in Norway, Finland, Sweden, and the UK followed this
pattern. In the financial accelerator feedback loops that operated in the US sub-prime crisis,
falls in house prices increased bad loans and impaired the ability of banks to extend credit. As
a result, household spending and residential investment fell, increasing unemployment and reducing
incomes, feeding back further into lower asset prices and credit supply.
The transmission mechanism that operated via consumption was poorly represented by the Federal
Reserve's FRB-US model and similar models elsewhere. A more relevant consumption function for
modelling the financial accelerator is needed, modifying the permanent income model with shorter
time horizons, 6 incorporating important shifts in credit lending conditions, and disaggregating
household balance sheets into liquid and illiquid elements, debt and housing wealth.
Implications for Macroeconomic Policy Models
To take into account all the feedbacks, a macroeconomic policy model needs to explain asset prices
and the main components of household balance sheets, including debt and liquid assets. This is best
done in a system of equations including consumption, in which shifts in credit conditions which
have system-wide consequences, sometimes interacting with other variables such as housing wealth
are extracted as a latent variable. 7 The availability of home equity loans, which varies
over time and between countries hardly available in the US of the 1970s or in contemporary Germany,
France or Japan and the also the variable size of down-payments needed to obtain a mortgage, determine
whether increases in house prices increase (US and UK) or reduce (Germany and Japan) aggregate consumer
spending. This is one of the findings of research I review in Muellbauer (2016). Another important
finding is that a rise in interest rates has different effects on aggregate consumer spending depending
on the nature of household balance sheets. Japan and Germany differ radically from the US and the
UK, with far higher bank and saving deposits and lower household debt levels so that lower interest
rates reduce consumer spending. A crucial implication of these two findings is that monetary policy
transmission via the household sector differs radically between countries it is far more effective
in the US and UK, and even counterproductive in Japan (see Muellbauer and Murata 2011).
Such models, building in disaggregated balance sheets and the shifting, interactive role of credit
conditions, have many benefits: better interpretations of data on credit growth and asset prices
helpful for developing early warning indicators of financial crises; better understandings of long-run
trends in saving rates and asset prices; and insights into transmission for monetary and macro-prudential
policy. Approximate consistency with good theory following the information economics revolution of
the 1970s is better than the exact consistency of the New Keynesian DSGE model with bad theory that
makes incredible assumptions about agents' behaviour and the economy. Repairing central bank policy
models to make them more relevant and more consistent with the qualitative conclusions of the better
micro-foundations outlined above is now an urgent task.
Endnotes
[1] Part of the problem of identification is that the DSGE models throw away long-run information.
They do this by removing long-run trends with the Hodrick-Prescott filter, or linear time trends
specific to each variable. Identification, which rests on available information, then becomes more
difficult, and necessitates 'incredible assumptions'. Often, impulse response functions tracing out
the dynamic response of the modelled economy to shocks are highly sensitive to the way the data have
been pre-filtered.
[3] See Campbell and Mankiw (1989, 1990) and for even more powerful evidence from the UK, US and
Japan; Muellbauer (2010); and micro-evidence from Shea (1995).
[4] Net worth is defined as liquid assets minus mortgage and non-mortgage debt plus illiquid financial
assets plus housing assets, and this assumes that the coefficients are all the same.
[5] In recent years, several empirical contributions have recognised the importance of the mechanisms
described by Fisher (1933). Mian and Sufi (2014) have provided extensive micro-economic evidence
for the role of credit shifts in the US sub-prime crisis and the constraining effect of high household
debt levels. Focusing on macro-data, Turner (2015) has analysed the role of debt internationally
with more general mechanisms, as well as in explaining the poor recovery from the global financial
crisis. Jorda et al. (2016) have drawn attention to the increasing role of real estate collateral
in bank lending in most advanced countries and in financial crises.
[6] The FRB-US model does build in shorter average horizons than text-book permanent income. It
also has a commendable flexible treatment of expectations, Brayton et al (1997).
[7] The use of latent variables in macroeconomic modelling has a long vintage. Potential output,
and the "natural rate" of unemployment or of interest are often treated as latent variables, for
example in the FRB-US model and in Laubach and Williams (2003), and latent variables are often modelled
using state space methods. Flexible spline functions can achieve similar estimates. Interaction effects
of latent with other variables seem not to have been considered, however. We use the term 'latent
interactive variable equation system' (LIVES) to describe the resulting format.
'the omission of debt and household balance sheets more generally'
putting these eclownometric [sic] models at about the same level of technical sophistication
as the Newcomen steam engine of 1712, which achieved about one (1) percent thermodynamic efficiency.
'a macroeconomic policy model needs to explain asset prices and household balance sheets.
This is best done in a system of equations.'
Yes indeedy. Reminds me of a young poseur at engineering school, who exclaimed during a
group study session, "I've got it all jocked out. Now I just need the equations!"
' the omission of debt and household balance sheets more generally '
You beat me to it. I have been aware of that for a few years now, but I doubt that one
person in a hundred (or a thousand) knows when they listen to some economist on a news program
or a business channel that the person speaking thinks that how much debt people have does not
substantively affect their spending.
Really, 5 year olds describing how they get toys from Santa have a better grasp of economics
than most "economists"
If I used or invented an econ model that left out the "consumer", and modeled it with a
"consumption agent object" having a single independent input variable being the Fed zero term,
zero risk interest rate, I'd be too embarrassed to admit it. I would probably just very quietly
make a career change into one of the softer sciences. Maybe writing fictional romance novels,
or some such thing.
The worst thing about these types of mea culpas from the mainstream is the cited criticisms
from other mainstream economists only. It can only be a valid criticism if it was published in
a mainstream journal
Of the structural changes, the evolution and revolution of credit market architecture was
the single most important . In the US, credit card ownership and instalment credit spread between
the 1960s and the 2000s; the government-sponsored enterprises Fannie Mae and Freddie Mac
were recast in the 1970s to underwrite mortgages; interest rate ceilings were lifted in the
early 1980s; and falling IT costs transformed payment and credit screening systems in the 1980s
and 1990s. More revolutionary was the expansion of sub-prime mortgages in the 2000s, driven
by rise of private label securitisation backed by credit default obligations (CDOs) and swaps.
The 2000 Commodity Futures Modernization Act (CFMA) made derivatives enforceable throughout
the US with priority ahead of claims by others (e.g. workers) in bankruptcy. This permitted
derivative enhancements for private label mortgage-backed securities (PMBS) so that they could
be sold on as highly rated investment grade securities. A second regulatory change was the
deregulation of banks and investment banks . Similar measures to lower required capital on
investment grade PMBS increased leverage at commercial banks. These changes occurred in the
political context of pressure to extend credit to poor.
That 'political pressure' turned out to be the bait and switch for a system that shifted
power via debt creation.
What we have not yet come to terms with are the implications of David Graeber's anthropological
insights: how does debt affect social relationships, alter social norms, and affect relationships
among individuals?
Debt is a form of power, but by failing to factor this into their equations, the Central
Bankers are missing the social, political, and cultural consequences of the profound shifts in
'credit market architecture'. In many respects, this is not about 'money'; it's about power.
After Brexit, Trump, and the emerging upheaval in the EU, it's no longer enough to just 'build
better economic models'.
The Central Bankers' models can include all the parameters they can dream up, but until
someone starts thinking more clearly about the role and function of money, and the way that 'different
kinds of money' create 'different kinds of social relationships', we are all in a world of hurt.
At this point, Central Bankers should also ask themselves what happens - socially, personally
- when 'debt' (i.e., financialization) shifts from productivity to predation. That shift accelerated
from the 1970s, through the 1990s, into the 2000s.
Allowing anyone to charge interest that is usurious is the modern equivalent of turning a blind
eye to slavery.
By enabling outrageous interest, any government hands their hard working taxpayers over to
what is essentially unending servitude.
This destroys the political power of any government that engages in such blind stupidity.
Frankly, I'm astonished that it has taken so long for taxpayers to show signs of outrage and
revolt.
I think you have come up with a good insight I very much agree its about power and not money.
Now, maybe it is just a coincidence, but it is hard for me not to notice that the explosion
in consumer credit matches up nicely with the rise in inequality.
And one other thing I would point out it doesn't take usurious interest rates. If squillionaires
have access to unlimited, essentially cost free money in which the distributors of money are guaranteed
a profit, NO MATTER HOW MUCH THEY HAVE LOST, while the debts on non-squillionaires are collected
with fees, penalties, and to the last dime, than it doesn't matter if interest rates are essentially
zero.
Who gets bailed out is not due to logic or accounting that says that the banks' losses have
to be made whole, but not home owners that is an ideology called economics .
I wouldn't downplay how cool the money part is, however. It's no fun making questionable, dodgy
loans unless you can charge fees up front and then sell the risk off to a large crowd of suckers.
Hence the importance of securitization and other "insurance" type derivatives. Then, if you run
out of willing suckers, you need a place to stuff it all, say pension plans and maybe even privatized
social security.
But if they allow this to happen in the real world, shouldn't the models have a piece reflecting
this behavior as well? Full circle of course, where the "consumer balance sheet" contains his
bad debt investment and savings assets* offsetting his liabilities. Then everyone would be more
like a bank?
* we still need to model bubble assets like real estate and stocks. This sounds like it's
starting to get tricky!
"Another important finding is that a rise in interest rates has different effects on aggregate
consumer spending depending on the nature of household balance sheets".
This is a point that Warren Mosler and other MMTers have been making since the 1990s: depending
on circumstances, lower interest rates may well have contractionary effects and higher interest
rates may stimulate the economy.
The tool of choice to fight recessions and control inflation should thus be fiscal instead
of monetary policy.
Again, MMT had the analysis right long before mainstream theory started to admit there might
be serious problems with its favorite approaches (without ever giving appropriate credit to MMT,
of course!).
I think the Samarians knew that 5000 years ago. The Templars certainly knew it 1300 years ago.
And most definitely, "modern" European banking knew it 300 years ago.
of note to me is just how simplistic Keynesian statistics were/are, based on almost fantasy-assumptions.
And that was followed by Stiglitz et al's theory of asymmetric information models. And this above
does give us a dose of all the different variables involved in accurately analyzing an economy
an economy that exploded with financialization, but nobody could keep up. As was proven in 2008.
It shouldn't be this confusing. "Repairing CB policies to make them more relevant is now an urgent
task." I think it is urgent enough to nationalize the banks and start over using a sovereign money
model.
Let's take an infinitely complex system (the economy) that is widely affected by human emotion,
then we'll leave out the mechanism by which money itself is created and distributed and then let's
"model" it.
We'll have two fans of Stalin's communist "command and control" economy (Keynes and Harry Dexter
White) pretend they could create a stable system based on Ph.Ds divining future economic and trade
flows and then "managing" them by price fixing the price of money. We'll set policy based on the
national conditions of the country with the global reserve currency despite the fact that 2/3
of that currency is outside that country. And with a system where trade never settles so massive
imbalances can persist indefinitely. Then let's put self-interested private institutions in charge
of all money creation and distribution .and we'll be sure their system operates in secret and
is never audited. When the system blows up we'll have these central overlords step in as uneconomic
buyers of assets with no consideration for asset quality or price, with no economic need to ever
sell, and with "unlimited" funds with which to buy more such assets. At the end we'll continue
to call the system "capitalism" and we'll continue to call the scrip "money" and hope nobody notices.
The money supply is flat in the recession of the early 1990s.
Then it really starts to take off as the dot.com boom gets going which rapidly morphs into
the US housing boom, courtesy of Alan Greenspan's loose monetary policy.
When M3 gets closer to the vertical, the black swan is coming and you have a credit bubble
on your hands (money = debt).
The mainstream are all trained in neoclassical economics which is spectacularly dismal.
Steve Keen sits outside the mainstream and saw the credit bubble forming in 2005, you can see
it in the
US money supply (money = debt).
In 2007, Ben Bernanke could see no problems ahead (dismal).
Irving Fisher looked at the debt inflated asset bubble after the 1929 crash when ideas that
markets reached stable equilibriums were beyond a joke.
Fisher developed a theory of economic crises called debt-deflation, which attributed the crises
to the bursting of a credit bubble.
Hyman Minsky came up with "financial instability hypothesis" in 1974 and Steve Keen carries
on with this work today. The theory is there outside the mainstream.
To understand the theory you have to understand money:
" .. debt does not make society as a whole poorer: one person's debt is another person's
asset. So total wealth is unaffected by the amount of debt out there. This is, strictly speaking
true only for the world economy as a whole .. " Paul Krugman "End this Depression Now".
This is the neoclassical economic view of money and it's totally wrong and will always leave
you blind to events like 2008, e.g.
1929 US (margin lending into US stocks)
1989 Japan (real estate)
2008 US (real estate bubble leveraged up with derivatives for global contagion)
2010 Ireland (real estate)
2012 Spain (real estate)
2015 China (margin lending into Chinese stocks)
Norway, Sweden, Canada and Australia have been letting their real estate bubbles inflate because
their mainstream economists and Central Bankers don't know what's coming.
Money and debt are opposite sides of the same coin.
If there is no debt there is no money.
Money is created by loans and destroyed by repayments of those loans.
Advanced:
"Where does money come from" available from Amazon
You need to understand how money works to understand why austerity doesn't work in balance
sheet recessions, the cause of the dire prediction from the IMF that I started with.
You can look at the money supply/debt levels (the same thing) to see how well the economy is
doing.
The money supply is contracting the economy will be doing badly and the risk of this turning
into debt deflation is high, there is positive feedback tending to make the situation worse. Debt
repayments are larger than the new debt being taken out, the overall level of debt is decreasing.
The money supply is stable this is stagnation, in the ideal world the money supply should
be growing at a steady pace.
The money supply is growing steadily the ideal.
The money supply is growing very rapidly you've got a credit bubble on your hands and the
"black swan" is near. The FED didn't understand money and debt before 2008 so they missed it.
Mario is still doing austerity now, no wonder those Italian banks are full of NPLs.
It's too late for Norway, Sweden, Canada and Australia's mainstream economists and Central
Bankers, but we need to get this dismal neoclassical economics updated before the whole world
descends into debt deflation.
It's almost here, there isn't much time.
Chuck another trillion in to keep this sinking ship afloat Central Bankers, we need to get
our technocrat elite up to speed.
Just look at the rate of change of the money supply/debt.
When it's rising rapidly you're in trouble as a credit bubble is forming.
A negative gradient is also a bad sign as it means your money supply is contracting, your economy
is in trouble and debt deflation could be on its way.
I am shocked, shocked I tell you, that a model with 'Equilibrium' right in the name fails to
predict crises. They could probably do better just aggregating results from a big multi-player
version of The Sims.
Better models should start from scratch, assuming non-linearity. They could take the Limits-to-Growth
system of nonlinear pde's as a starting point, for example, to get a good handle on long range
dynamics. Then add detailed submodels for money and debt, for different countries, for trade,
for different economic sectors, etc. Use realistic agent based models where standard models are
inadequate.
To do all, start by sending all those economics Ph.D.s back to school in other fields where
they know how to do modern applied mathematics.
"... That 'political pressure' turned out to be the bait and switch for a system that shifted power via debt creation. ..."
"... What we have not yet come to terms with are the implications of David Graeber's anthropological insights: how does debt affect social relationships, alter social norms, and affect relationships among individuals? ..."
"... Debt is a form of power, but by failing to factor this into their equations, the Central Bankers are missing the social, political, and cultural consequences of the profound shifts in 'credit market architecture'. In many respects, this is not about 'money'; it's about power. ..."
"... The Central Bankers' models can include all the parameters they can dream up, but until someone starts thinking more clearly about the role and function of money, and the way that 'different kinds of money' create 'different kinds of social relationships', we are all in a world of hurt. ..."
"... At this point, Central Bankers should also ask themselves what happens - socially, personally - when 'debt' (i.e., financialization) shifts from productivity to predation. That shift accelerated from the 1970s, through the 1990s, into the 2000s. ..."
"... Now, maybe it is just a coincidence, but it is hard for me not to notice that the explosion in consumer credit matches up nicely with the rise in inequality. ..."
Of the structural changes, the evolution and revolution of credit market architecture
was the single most important . In the US, credit card ownership and instalment credit spread
between the 1960s and the 2000s; the government-sponsored enterprises Fannie Mae and Freddie
Mac were recast in the 1970s to underwrite mortgages; interest rate ceilings were lifted
in the early 1980s; and falling IT costs transformed payment and credit screening systems in
the 1980s and 1990s. More revolutionary was the expansion of sub-prime mortgages in the 2000s,
driven by rise of private label securitisation backed by credit default obligations (CDOs)
and swaps. The 2000 Commodity Futures Modernization Act (CFMA) made derivatives enforceable
throughout the US with priority ahead of claims by others (e.g. workers) in bankruptcy. This
permitted derivative enhancements for private label mortgage-backed securities (PMBS) so that
they could be sold on as highly rated investment grade securities. A second regulatory change
was the deregulation of banks and investment banks . Similar measures to lower required capital
on investment grade PMBS increased leverage at commercial banks. These changes occurred in
the political context of pressure to extend credit to poor.
That 'political pressure' turned out to be the bait and switch for a system that shifted
power via debt creation.
What we have not yet come to terms with are the implications of David Graeber's anthropological
insights: how does debt affect social relationships, alter social norms, and affect relationships
among individuals?
Debt is a form of power, but by failing to factor this into their equations, the Central
Bankers are missing the social, political, and cultural consequences of the profound shifts in
'credit market architecture'. In many respects, this is not about 'money'; it's about power.
After Brexit, Trump, and the emerging upheaval in the EU, it's no longer enough to just 'build
better economic models'.
The Central Bankers' models can include all the parameters they can dream up, but until
someone starts thinking more clearly about the role and function of money, and the way that 'different
kinds of money' create 'different kinds of social relationships', we are all in a world of hurt.
At this point, Central Bankers should also ask themselves what happens - socially, personally
- when 'debt' (i.e., financialization) shifts from productivity to predation. That shift accelerated
from the 1970s, through the 1990s, into the 2000s.
Allowing anyone to charge interest that is usurious is the modern equivalent of turning a blind
eye to slavery.
By enabling outrageous interest, any government hands their hard working taxpayers over to
what is essentially unending servitude.
This destroys the political power of any government that engages in such blind stupidity.
Frankly, I'm astonished that it has taken so long for taxpayers to show signs of outrage and
revolt.
I think you have come up with a good insight I very much agree its about power and not money.
Now, maybe it is just a coincidence, but it is hard for me not to notice that the explosion
in consumer credit matches up nicely with the rise in inequality.
And one other thing I would point out it doesn't take usurious interest rates. If squillionaires
have access to unlimited, essentially cost free money in which the distributors of money are guaranteed
a profit, NO MATTER HOW MUCH THEY HAVE LOST, while the debts on non-squillionaires are collected
with fees, penalties, and to the last dime, than it doesn't matter if interest rates are essentially
zero.
Who gets bailed out is not due to logic or accounting that says that the banks' losses have
to be made whole, but not home owners that is an ideology called economics .
The biggest political surprise of
2016 was that everyone was so surprised. I certainly had no excuse to be caught
unawares: soon after the 2008 crisis, I wrote a book suggesting that a collapse of
confidence in political institutions would follow the economic collapse, with a lag of
five years or so.
We've seen this sequence before. The
first breakdown of globalization, described by Karl Marx and Friedrich Engels in their
1848
The Communist Manifesto,
was followed by reform laws creating unprecedented
rights for the working class. The breakdown of British imperialism after World War I was
followed by the New Deal and the welfare state. And the breakdown of Keynesian economics
after 1968 was followed by the Thatcher-Reagan revolution. In my book
Capitalism 4.0
, I argued that comparable political upheavals would follow the
fourth systemic breakdown of global capitalism heralded by the 2008 crisis.
When a particular model of capitalism
is working successfully, material progress relieves political pressures. But when the
economy fails and the failure is not just a transient phase but a symptom of deep
contradictions capitalism's disruptive social side effects can turn politically toxic.
That is what happened after 2008.
Once the failure of free trade, deregulation, and monetarism came to be seen as leading
to a "new normal" of permanent austerity and diminished expectations, rather than just
to a temporary banking crisis, the inequalities, job losses, and cultural dislocations
of the pre-crisis period could no longer be legitimized just as the extortionate taxes
of the 1950s and 1960s lost their legitimacy in the stagflation of the 1970s.
If we are witnessing this kind of
transformation, then piecemeal reformers who try to address specific grievances about
immigration, trade, or income inequality will lose out to radical politicians who
challenge the entire system. And, in some ways, the radicals will be right.
The disappearance of "good"
manufacturing jobs cannot be blamed on immigration, trade, or technology. But whereas
these vectors of economic competition increase total national income, they do not
necessarily distribute income gains in a socially acceptable way. To do that requires
deliberate political intervention on at least two fronts.
First, macroeconomic management must
ensure that demand always grows as strongly as the supply potential created by
technology and globalization. This is the fundamental Keynesian insight that was
temporarily rejected in the heyday of monetarism during the early 1980s, successfully
reinstated in the 1990s (at least in the US and Britain), but then forgotten again in
the deficit panic after 2009.
A return to Keynesian demand
management could be the main economic benefit of Donald Trump's incoming US
administration, as expansionary fiscal policies replace much less efficient efforts at
monetary stimulus. The US may now be ready to abandon the monetarist dogmas of
central-bank independence and inflation targeting, and to restore full employment as the
top priority of demand management. For Europe, however, this revolution in macroeconomic
thinking is still years away.
At the same time, a second, more
momentous, intellectual revolution will be needed regarding government intervention in
social outcomes and economic structures. Market fundamentalism conceals a profound
contradiction. Free trade, technological progress, and other forces that promote
economic "efficiency" are presented as beneficial to society, even if they harm
individual workers or businesses, because growing national incomes allow winners to
compensate losers, ensuring that nobody is left worse off.
This principle of so-called Pareto
optimality underlies all moral claims for free-market economics. Liberalizing policies
are justified in theory only by the assumption that political decisions will
redistribute some of the gains from winners to losers in socially acceptable ways. But
what happens if politicians do the opposite in practice?
By deregulating finance and trade,
intensifying competition, and weakening unions, governments created the theoretical
conditions that demanded redistribution from winners to losers. But advocates of market
fundamentalism did not just forget redistribution; they forbade it.
The pretext was that taxes, welfare
payments, and other government interventions impair incentives and distort competition,
reducing economic growth for society as a whole. But, as Margaret Thatcher famously
said, "[ ] there's no such thing as society. There are individual men and women and
there are families." By focusing on the social benefits of competition while ignoring
the costs to specific people, the market fundamentalists disregarded the principle of
individualism at the heart of their own ideology.
After this year's political
upheavals, the fatal contradiction between social benefits and individual losses can no
longer be ignored. If trade, competition, and technological progress are to power the
next phase of capitalism, they will have to be paired with government interventions to
redistribute the gains from growth in ways that Thatcher and Reagan declared taboo.
Breaking these taboos need not mean
returning to the high tax rates, inflation, and dependency culture of the 1970s. Just as
fiscal and monetary policy can be calibrated to minimize both unemployment and
inflatio n, redistribution can be designed not merely to recycle taxes into welfare, but
to help more directly when workers and communities suffer from globalization and
technological change.
Instead of providing cash handouts
that push people from work into long-term unemployment or retirement, governments can
redistribute the benefits of growth by supporting employment and incomes with regional
and industrial subsidies and minimum-wage laws. Among the most effective interventions
of this type, demonstrated in Germany and Scandinavia, is to spend money on high-quality
vocational education and re-training for workers and students outside universities,
creating non-academic routes to a middle-class standard of living.
These may all sound like obvious
nostrums, but governments have mostly done the opposite. They have made tax systems less
progressive and slashed spending on education, industrial policies and regional
subsidies, pouring money instead into health care, pensions, and cash hand-outs that
encourage early retirement and disability. The redistribution has been away from
low-paid young workers, whose jobs and wages are genuinely threatened by trade and
immigration, and toward the managerial and financial elites, who have gained the most
from globalization, and elderly retirees, whose guaranteed pensions protect them from
economic disruptions.
Yet this year's political upheavals
have been driven by elderly voters, while young voters mostly supported the
status
quo
. This paradox shows the post-crisis confusion and disillusionment is not yet
over. But the search for new economic models that I called "Capitalism 4.1" has clearly
started for better or worse
Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at
the Times of London, the International New York Times and the Financial Times, he is the author of
Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis
transformations
"He stated, the culture in Silicon Valley is about social liberalism and environmentalism,
yet, the tech firms are full of the most ruthless free market capitalists he's ever seen."
Ha, Silicon Valley is full of the most anti-free market capitalists anywhere. They spend all
their time trying to figure out ways to eliminate competition through mergers and buyouts and
market domination.
The spend all their time suing each other to maintain their government enforced
anti-competitive patent monopolies. Silicon Valley hates free market competition. They spend inordinate
amounts of time and money to reduce free market competition.
"... Another thing: it will be clear how serious they take the allegations of Russian hacking, by how they address the problem of auditing electronic voting machines. ..."
"... If the 2018 elections aren't all with voter verified paper ballots, accompanied by random auditing and auditing all close elections, we know the accusations of Russian hacking were blatant lies. ..."
Another thing: it will be clear how serious they take the allegations of Russian hacking,
by how they address the problem of auditing electronic voting machines.
If the 2018 elections aren't all with voter verified paper ballots, accompanied by random auditing
and auditing all close elections, we know the accusations of Russian hacking were blatant lies.
"... Democratic party under Bill Clinton became yet another neoliberal party (soft neoliberals) and betrayed both organized labour and middle class in favour of financial oligarchy. ..."
"... The cynical calculation was that "they have nowhere to go" and will vote for Democrats anyway. And that was true up to and including election of "change we can believe in" guy. After this attempt of yet another Clinton-style "bait and switch" trick failed. ..."
"... Now it is clear that far right picked up large part of those votes. So in a way Bill Clinton is the godfather of the US far right renaissances. The same is true for Hillary: her "kick the can down the road" stance made victory of Trump possible (although it surprised me; I expected that neoliberals were still strong enough to push their candidate down the US people throat) ..."
"... Under "democrat" Obama the USA pursued imperial policy of creating global neoliberal empire. The foreign policy remained essentially unchanged. Neocons were partially replaced with "liberal interventionists" which is the same staff in a different bottle. This policy costs the US tremendous amount of money and it is probable that the US is going the way British empire went -- overextending itself. ..."
"... Regional currency blocks are now a reality and arrangements bypass the usage of US dollar if international trade are common. They are now in place between several large countries such as Russia and China and absolutely nothing can reverse this trend. So dollar became virtualized -- a kind of "conversion gauge" but without profits for real conversion national currency to dollars for major TBTF banks. ..."
This Washington Post article on Poland - where a right-wing, anti-intellectual, nativist party
now rules, and has garnered a lot of public support - is chilling for those of us who worry that
Trump_vs_deep_state may really be the end of the road for US democracy. The supporters of Law and Justice
clearly looked a lot like Trump's white working class enthusiasts; so are we headed down the same
path?
(In Poland, a window on what happens when
populists come to power http://wpo.st/aHJO2
Washington Post - Anthony Faiola - December 18)
Well, there's an important difference - a bit of American exceptionalism, if you like. Europe's
populist parties are actually populist; they pursue policies that really do help workers, as long
as those workers are the right color and ethnicity. As someone put it, they're selling a herrenvolk
welfare state. Law and Justice has raised minimum wages and reduced the retirement age; France's
National Front advocates the same things.
Trump, however, is different. He said lots of things on the campaign trail, but his personnel
choices indicate that in practice he's going to be a standard hard-line economic-right Republican.
His Congressional allies are revving up to dismantle Obamacare, privatize Medicare, and raise
the retirement age. His pick for Labor Secretary is a fast-food tycoon
who loathes minimum wage hikes. And his pick for top economic advisor is the king of trickle-down.
So in what sense is Trump a populist? Basically, he plays one on TV - he claims to stand for
the common man, disparages elites, trashes political correctness; but it's all for show. When
it comes to substance, he's pro-elite all the way.
It's infuriating and dismaying that he managed to get away with this in the election. But that
was all big talk. What happens when reality begins to hit? Repealing Obamacare will inflict huge
harm on precisely the people who were most enthusiastic Trump supporters - people who somehow
believed that their benefits would be left intact. What happens when they realize their mistake?
I wish I were confident in a coming moment of truth. I'm not. Given history, what we can count
on is a massive effort to spin the coming working-class devastation as somehow being the fault
of liberals, and for all I know it might work. (Think of how Britain's Tories managed to shift
blame for austerity onto Labour's mythical fiscal irresponsibility.) But there is certainly an
opportunity for Democrats coming.
And the indicated political strategy is clear: make Trump and company own all the hardship
they're about to inflict. No cooperation in devising an Obamacare replacement; no votes for Medicare
privatization and increasing the retirement age. No bipartisan cover for the end of the TV illusion
and the coming of plain old, ugly reality.
Democratic party under Bill Clinton became yet another neoliberal party (soft neoliberals)
and betrayed both organized labour and middle class in favour of financial oligarchy.
The cynical calculation was that "they have nowhere to go" and will vote for Democrats
anyway. And that was true up to and including election of "change we can believe in" guy. After
this attempt of yet another Clinton-style "bait and switch" trick failed.
Now it is clear that far right picked up large part of those votes. So in a way Bill Clinton
is the godfather of the US far right renaissances. The same is true for Hillary: her "kick the
can down the road" stance made victory of Trump possible (although it surprised me; I expected
that neoliberals were still strong enough to push their candidate down the US people throat)
Point 2:
Under "democrat" Obama the USA pursued imperial policy of creating global neoliberal empire.
The foreign policy remained essentially unchanged. Neocons were partially replaced with "liberal
interventionists" which is the same staff in a different bottle. This policy costs the US tremendous
amount of money and it is probable that the US is going the way British empire went -- overextending
itself.
Regional currency blocks are now a reality and arrangements bypass the usage of US dollar
if international trade are common. They are now in place between several large countries such
as Russia and China and absolutely nothing can reverse this trend. So dollar became virtualized
-- a kind of "conversion gauge" but without profits for real conversion national currency to dollars
for major TBTF banks.
So if we think about Iraq war as the way to prevent to use euro as alternative to dollar in
oil sales that goal was not achieved and all blood and treasure were wasted.
In this sense it would be difficult to Trump to continue with "bastard neoliberalism" both
in foreign policy and domestically and betray his election promises because they reflected real
problems facing the USA and are the cornerstone of his political support.
Also in this case neocons establishment will simply get rid of him one way or the other. I
hope that he understand this danger and will avoid trimming Social Security.
Returning to Democratic Party betrayal of interests of labour, Krugman hissy fit signifies
that he does not understand the current political situation. Neoliberal wing of Democratic Party
is now bankrupt both morally and politically. Trump election was the last nail into Bill Clinton
political legacy coffin.
Now we returned to essentially the same political process that took place after the Great Depression,
with much weaker political leaders, this time. So this is the time for stronger, more interventionist
in internal policy state and the suppression of financial oligarchy. If Trump does not understand
this he is probably doomed and will not last long.
That's why I think Trump inspired far right renaissance will continue and the political role
of military might dramatically increase. And politically Trump is the hostage of this renaissance.
Flint appointment in this sense is just the first swallow of increased role of military leaders
in government.
Growth in African Energy Demand If you build it they will come: Top line energy consumption
on the continent is growing by about 2% per annum as infrastructure spending multiplies. A growing
middle class is buying wheels and appliances. We've seen this movie before. The billion people
living in the sub-Sahara are embracing joules generated by oil and gas in greater quantities than
any other primary source (Figure 1). Is Africa the new China-and-India?
Escalating Oilfield Service Costs Oil producers have been smug about how they have cut
their costs by 20 to 30% over the past two years. But much of that has been accomplished by crippling
the margins of the oilfield service sector. Rising rig counts are already germinating the first
hints of oilfield inflation. If costs escalate again, $60/B may not be the new $90 (see past blog
"$60 is in Style For Now").
From "One neat trick to stop Social Security 'Reform'" http://angrybearblog.com/2016/12/one-neat-trick-to-stop-social-security-reform.html
=== quote === Republicans constantly try to bring Social Security into ongoing debates about 'Balanced Budgets'.
But they face a fundamental problem with their math. For a variety of reasons, some quite reasonable
and others nakedly political (seniors vote) nearly every 'Reform' proposal out there promises to
hold 55 and older harmless. Meaning you can't have any more than miniscule effects on Cost projections
until today's 54′s and younger start retiring. Except for a handful of early retirees that event
happens 11+ years in the future, which is to say outside the 10 year Budget Scoring window.
You can't have a fix to a problem scored over 10 years with a solution starting Year 11. Sure
the 'Reformers' will blather about "Infinite Future Horizons". But any proposal that spares current
seniors from cuts will score close to zero by CBO and JCT. You just have to count years on your fingers.
... ... ...
GOP plans to "reform" Social Security often take this form
1. Amιricas $20 trillion public debt is unsustainable
2. Current Budget Deficits add to that debt
So far so good
3. Social Security must be part of that discussion
4. 55 and orders must be shielded from changes that allow them no time to adjust
5. (The Bush/Krasting argument) Payrolll tax increases across the board are neither politically possible
nor econimically wise
All three of these are doubtful. This post points out that 2 and 3 +4 (2nd edit) are incompatible
within a structure that assumes 10 year budget scoring. Argue or acknowledge that specific point
and we can move on. ... ... .. GOP point one is interesting on several fronts. One it is debatable on its own terms. It it is not
clear that current Public Debt is unsustainable on a percentage of GDP basis, especially when you
take that in the form of Debt Service at current and projected 10 year rates. A $10 trillion debt
at 8% (roughly Bush era) is twice as expensive as a $20 trillion debt at 2% in debt service terms
and assuming principal rollover. Simply put Obama years have seen a massive refi of Public Debt.
Much credit for which belongs to the Feds QE1 and QE 2.
... ... ..
Jim A, December 15, 2016 11:31 am
Of course that 22% benefit cut is an illusion created by thinking that the SS trust fund is something
more substantial than your left pocket borrowing from your right pocket and giving it IOUs.
Assuming
that we were to simply run out the clock and make no changes to SS until the trust fund ran out.
On the day before the trust fund ran out we would have combined general revenues and government borrowing
sufficient to redeem the special, non-negotiable bonds held in the trust fund. On the day afterwards,
the general revenue and the ability to the US treasury to borrow money wouldn't have changed. Under
current law we would at that point be forced to cut benefits to all retirees by 22%.
Presumably that
22% of revenue that was NOT being spent to repay the trust fund would be applied as deficit reduction.
Or used for tax cuts or new discretionary spending. Of course those are all political impossibilities,
and would never happen.
It is important to the Republicans that want to reform SS that people never
realize that we can afford to pay the shortfall in SS revenues from the treasury. Because once people
realize that, they will be more comfortable with that than they will be with the alternatives.
Growing inequality. We are already at Gini coefficients normally only found in banana republics.
Notable quotes:
"... from 2005 to 2015, the proportion of Americans workers engaged in what they refer to as "alternative work" soared during the Obama era, from 10.7% in 2005 to 15.8% in 2015. Alternative, or "gig" work is defined as "temporary help agency workers, on-call workers, contract company workers, independent contractors or freelancers", and is generally unsteady, without a fixed paycheck and with virtually no benefits. ..."
"... The two economists also found that each of the common types of alternative work increased from 2005 to 2015-with the largest changes in the number of independent contractors and workers provided by contract firms, such as janitors that work full-time at a particular office, but are paid by a janitorial services firm. ..."
Just over six years ago, in December of 2010, we wrote "
Charting America's Transformation To A Part-Time Worker Society ", in which we predicted - and
showed - that in light of the underlying changes resulting from the second great depression, whose
full impacts remain masked by trillions in monetary stimulus and soon, perhaps fiscal, America is
shifting from a traditional work force, one where the majority of new employment is retained on a
full-time basis, to a "gig" economy, where workers are severely disenfranchised, and enjoy far less
employment leverage, job stability and perks than their pre-crash peers. It also explains why despite
the 4.5% unemployment rate, which the Fed has erroneously assumed is indicative of job market at
"capacity", wage growth not only refuses to materialize, but as we showed yesterday, the growth in
real disposable personal income was
the lowest since 2014 .
When we first penned our article, it was dubbed "fringe" tinfoil hattery, or in the latest vernacular,
"fake news."
Fast forward 6 years, when a
report by Harvard and Princeton economists Lawrence Katz and Alan Krueger , confirms exactly
what we warned. In their study, the duo show that from 2005 to 2015, the proportion of Americans
workers engaged in what they refer to as "alternative work" soared during the Obama era, from 10.7%
in 2005 to 15.8% in 2015. Alternative, or "gig" work is defined as "temporary help agency workers,
on-call workers, contract company workers, independent contractors or freelancers", and is generally
unsteady, without a fixed paycheck and with virtually no benefits.
The two economists also found that each of the common types of alternative work increased
from 2005 to 2015-with the largest changes in the number of independent contractors and workers provided
by contract firms, such as janitors that work full-time at a particular office, but are paid by a
janitorial services firm.
Krueger, who until 2013 was also the top White House economist serving as chairman of the Council
of Economic Advisers under Obama, was "surprised" by the finding.
Quoted by
quartz , he said " We find that 94% of net job growth in the past decade was in the alternative
work category ," said Krueger. "And over 60% was due to the [the rise] of independent contractors,
freelancers and contract company workers." In other words, nearly all of the 10 million jobs created
between 2005 and 2015 were not traditional nine-to-five employment.
While the finding is good news for some, such as graphic designers and lawyers who hate going
to an office, for whom new technology and Obamacare has made it more appealing to become an independent
contractor. But for those seeking a steady administrative assistant office job, the market is grim.
It also explains why despite an apparent recovery in the labor market, wage growth has been non-existant,
due to the lack of career advancement and salary increase options for this vast cohort which was
hired over the past decade.
The decline of conventional full-time work has impacted every demographic. Whether this change
is good or bad depends on what kinds of jobs people want. " Workers seeking full-time, steady work
have lost," said Krueger. He then added, perhaps sarcastically, that "while many of those who value
flexibility and have a spouse with a steady job have probably gained."
Yes, well, spousal support aside, it also confirms another troubling finding this website reported
first earlier this month, namely that the
number of multiple jobholders has recently hit the highest number this century.
In a
Reuters
poll of 29 analysts and economists carried out after the OPEC deal, Raymond James had the highest
2017 forecast for Brent price, at US$83 per barrel, while the poll saw Brent averaging US$57.01
next year.
...The market is likely to
move into deficit
in the first half next year by an estimated 600,000 bpd, said the
International Energy Agency (IEA), as long as OPEC and non-OPEC producers manage to (and are
willing to) stick to promised cuts.
... ... ...
At oil above US$55 next year, energy consultancy
Wood Mackenzie
sees the oil and gas
industry turning cash flow positive for the first time since the downturn, and expects 2017 will
be a year of "stability and opportunity" for the sector.
...(EIA) expects Brent Crude prices to average US$51.66 in 2017, with WTI Crude prices
averaging US$50.66 next year.
...BofA Merrill Lynch - one of the optimistic viewpoints among the investment banks said in
its 2017 Market Outlook that its forecast for WTI Crude is US$59 and
"... If we go back to Bill Clinton, his "Putting People First" manifesto in '92 was quite left-of-center, but he didn't govern that way. If you look at things like NAFTA, Welfare reform, and cutting capital gains taxes - well, in many ways, Ronald Reagan would have been proud of him. ..."
"... Part of my view is that in the 1930s, we rejected the individuality of the '20s and before. After the crash and the Depression, we finally put the corporate class and bankers to the sidelines. Whether it was Keynesianism or the New Deal in the West, or state fascism or the advent of Stalinism, you saw more government control over the economy. This was good for workers and large governments. It was more nationalistic and led, obviously, to the next conflict. But the rise of government planning and government involvement was good for nominal GDPs. It was not good for the asset-holding classes - stocks and bonds did terribly over that period, right? You wanted to be a worker, you wanted to be labor, not capital. ..."
"... The period from the late 1970s to 1980 changed all that. You had Thatcher and the U.K. and Reagan in the U.S. Mao died in 1976, the Solidarity movement in Poland began in 1978, and the Soviet Union peaked in power in 1979. You saw that the pendulum had gone too far and now we're going to cut taxes on capital, we're going to be more globalistic, and trade was going to improve. Since then, capital has risen and assets have done better than labor. Taxes have been light on financial assets and heavy on labor. Everything was reversed on its head. ..."
"... If we look at the events of 2016 - Brexit, the Italian referendum, Trump, and the rise of nationalist China - are these the harbingers of something bigger? Or are they just a coincidence? The ground seems to be fertile for things to change globally. If so, does this give rise to a more nationalistic, protectionist, statist scenario? Are labor prices going to go up again? Are we going to tax capital and emphasize wages? ..."
You and I have
talked about how it has become a cost calculus for lots of corporations and financial
institutions to cheat. "If I get caught," they say, "I'm just going to pay a fine." How does this
change with new faces in Washington? You still have this very pro-corporate group on Capitol
Hill whose main bailiwick, in my opinion, is to protect the corporate class and the very wealthy.
You've got what ostensibly is a proto-populist in the White House with a cabinet that is a mιlange
of different types, so who knows?
In my overall view, stuff happens to change people. If we go back to Bill Clinton, his "Putting
People First" manifesto in '92 was quite left-of-center, but he didn't govern that way. If you
look at things like NAFTA, Welfare reform, and cutting capital gains taxes - well, in many
ways, Ronald Reagan would have been proud of him.
Events conspire to derail our perceptions of presidents. When we look at their platforms, we
think we know where things are headed. But in modern times, the only two presidents that I can
think of who really got their ideas and platforms enacted wholesale were FDR and Reagan. Everybody
else has gotten compromised, or has had events overwhelm them.
... ... ...
JC:
Part of my view is that in the 1930s, we rejected the individuality of the '20s and before.
After the crash and the Depression, we finally put the corporate class and bankers to the sidelines.
Whether it was Keynesianism or the New Deal in the West, or state fascism or the advent of Stalinism,
you saw more government control over the economy. This was good for workers and large governments.
It was more nationalistic and led, obviously, to the next conflict. But the rise of government
planning and government involvement was good for nominal GDPs. It was not good for the asset-holding
classes - stocks and bonds did terribly over that period, right? You wanted to be a worker, you
wanted to be labor, not capital.
The period from the late 1970s to 1980 changed all that. You had Thatcher and the U.K. and Reagan
in the U.S. Mao died in 1976, the Solidarity movement in Poland began in 1978, and the Soviet
Union peaked in power in 1979. You saw that the pendulum had gone too far and now we're going
to cut taxes on capital, we're going to be more globalistic, and trade was going to improve. Since
then, capital has risen and assets have done better than labor. Taxes have been light on financial
assets and heavy on labor. Everything was reversed on its head.
If we look at the events of 2016 - Brexit, the Italian referendum, Trump, and the rise of nationalist
China - are these the harbingers of something bigger? Or are they just a coincidence? The ground
seems to be fertile for things to change globally. If so, does this give rise to a more nationalistic,
protectionist, statist scenario? Are labor prices going to go up again? Are we going to tax capital
and emphasize wages?
"... The fact remains, however, that every single developed country got there by using protectionist policies to nurture the develop local industries. Protectionism in developed countries does have strongly negative consequences, but it is beneficial for developing economies. ..."
"... You are exactly right about Japan and I lived through that period. Please name one advanced economy which did not rely on protectionist laws to support domestic industries. All of the European industrial countries did it. The US did it. Japan and Korea did it. China is currently doing it and India has done it. ..."
"... Nobody cared about US labor or about hollowing out the US economy. Krugman frequently noted that the benefits to investors and 'strategic' considerations for free trade were more important that job losses. ..."
"... This extra demand for dollars as a commodity is what drives the price of the dollar higher, leading to the strategic benefits and economic hollowing out that I noted above. ..."
"... There really is no "post-industrialization era", no matter what fantasies the FIRE sector wants to sell. To the extent there is, the existing global trade agreements (including the WTO, World Bank, IMF, and related organization) accomplish that as well by privileging the position of first world capital. ..."
"... "Over the long haul, clearly automation's been much more important - it's not even close," said Lawrence Katz, an economics professor at Harvard who studies labor and technological change. No candidate talked much about automation on the campaign trail. Technology is not as convenient a villain as China or Mexico, there is no clear way to stop it, and many of the technology companies are in the United States and benefit the country in many ways. ..."
"... Globalization is clearly responsible for some of the job losses, particularly trade with China during the 2000s, which led to the rapid loss of 2 million to 2.4 million net jobs, according to research by economists including Daron Acemoglu and David Autor of M.I.T. ..."
"... People who work in parts of the country most affected by imports generally have greater unemployment and reduced income for the rest of their lives, Mr. Autor found in a paper published in January. Still, over time, automation has had a far bigger effect than globalization, and would have eventually eliminated those jobs anyway, he said in an interview. "Some of it is globalization, but a lot of it is we require many fewer workers to do the same amount of work," he said. "Workers are basically supervisors of machines." ..."
"... Clarification of 3: that is, infant industry protection as traditionally done, i.e. "picking winners", won't help. What would help is structural changes that make things relatively easier for small enterprises and relatively harder for large ones. ..."
"... Making direct lobbying of state and federal politicians by industry groups and companies a crime punishable by 110% taxation of net income on all the participants would be a start. ..."
"... "Over time, automation has generally had a happy ending: As it has displaced jobs, it has created new ones. But some experts are beginning to worry that this time could be different. Even as the economy has improved, jobs and wages for a large segment of workers - particularly men without college degrees doing manual labor - have not recovered." ..."
"... So why have manufacturing jobs plummeted since 2000? One answer is that the current account deficit is the wrong figure, since it also includes our surplus in trade in services. If you just look at goods, the deficit is closer to 4.2% of GDP. ..."
"... trade interacts with automation. Not only do we lose jobs in manufacturing to automation, but trade leads us to re-orient our production toward goods that use relatively less labor (tech, aircraft, chemicals, farm produces, etc.), while we import goods like clothing, furniture and autos. ..."
"... There are industries that are closely connected with the sovereignty of the country. That's what neoliberals tend to ignore as they, being closet Trotskyites ("Financial oligarchy of all countries unite!" instead of "Proletarian of all countries unite!" ;-) do not value sovereignty and are hell bent on the Permanent Neoliberal Revolution to bring other countries into neoliberal fold (in the form of color revolutions, or for smaller countries, direct invasions like in Iraq and Libya ). ..."
"... Neoliberal commenters here demonstrate complete detachment from the fact that like war is an extension of politics, while politics is an extension of economics. For example, denying imports can and is often used for political pressure. ..."
"... Now Trump want to play this game selectively designating China as "evil empire" and providing a carrot for Russia. Will it works, or Russia can be wiser then donkeys, I do not know. ..."
"... The US propagandists usually call counties on which they impose sanction authoritarian dictatorships to make such actions more politically correct, but the fact remains: The USA as a global hegemon enjoys using economic pressure to crush dissidents and put vassals in line. ..."
"... Neoliberalism as a social system is past it pinnacle and that creates some problems for the USA as the central player in the neoliberal world. The triumphal march of neoliberalism over the globe ended almost a decade ago. ..."
The Case for Protecting Infant Industries : I must say, it's been almost breathtaking to see
how fast the acceptable terms of debate have shifted on the subject of trade. Thanks partly to
President-elect Donald Trump's populism and partly to academic
research
showing that the costs of free trade could be higher than anyone predicted, economics commentators
are now happy to lambast
the entire idea of trade. I don't want to do that -- I think a nuanced middle ground is best.
But I do think it's worth reevaluating one idea that the era of economic dogmatism had seemingly
consigned to the junk pile -- the notion of infant-industry protectionism. ...
DrDick -> pgl...
The fact remains, however, that every single developed country got there by using protectionist
policies to nurture the develop local industries. Protectionism in developed countries does have
strongly negative consequences, but it is beneficial for developing economies.
You are exactly right about Japan and I lived through that period. Please name one advanced
economy which did not rely on protectionist laws to support domestic industries. All of the European
industrial countries did it. The US did it. Japan and Korea did it. China is currently doing it
and India has done it.
JohnH -> pgl... , -1
Japan and other developed countries took advantage of the strong dollar/reserve currency, which
provided their industries de facto protection from US exports along with a price umbrella that
allowed them export by undercutting prices on US domestic products. The strong dollar was viewed
as a strategic benefit to the US, since it allowed former rivals to develop their economies while
making them dependent on the US consumer market, the largest in the world. The strong dollar also
allowed the US to establish bases and fight foreign wars on the cheap, while allowing Wall Street
to buy foreign economies' crown jewels on the cheap.
Nobody cared about US labor or about hollowing out the US economy. Krugman frequently noted
that the benefits to investors and 'strategic' considerations for free trade were more important
that job losses.
Even pgl's guy, Milton Friedman, recognized that "overseas demand for dollars allows the United
States to maintain persistent trade deficits without causing the value of the currency to depreciate
or the flow of trade to re-adjust." https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar
This extra demand for dollars as a commodity is what drives the price of the dollar higher,
leading to the strategic benefits and economic hollowing out that I noted above.
John San Vant -> JohnH... , -1
That is because you get a persistent trade surplus in services, which offsets the "Goods" trade
deficit. The currency depreciated in the 2000's because said surplus in services began to decline
creating a real trade deficit.
There really is no "post-industrialization era", no matter what fantasies the FIRE sector
wants to sell. To the extent there is, the existing global trade agreements (including the WTO,
World Bank, IMF, and related organization) accomplish that as well by privileging the position
of first world capital.
anne -> DrDick... , -1
There really is no "post-industrialization era", no matter what fantasies the Finance, Insurance,
and Real Estate sectors want to sell....
[ Interesting assertion. Do develop this further. ]
The Long-Term Jobs Killer Is Not China. It's Automation.
By Claire Cain Miller
The first job that Sherry Johnson, 56, lost to automation was at the local newspaper in Marietta,
Ga., where she fed paper into the printing machines and laid out pages. Later, she watched machines
learn to do her jobs on a factory floor making breathing machines, and in inventory and filing.
"It actually kind of ticked me off because it's like, How are we supposed to make a living?"
she said. She took a computer class at Goodwill, but it was too little too late. "The 20- and
30-year-olds are more up to date on that stuff than we are because we didn't have that when we
were growing up," said Ms. Johnson, who is now on disability and lives in a housing project in
Jefferson City, Tenn.
Donald J. Trump told workers like Ms. Johnson that he would bring back their jobs by clamping
down on trade, offshoring and immigration. But economists say the bigger threat to their jobs
has been something else: automation.
"Over the long haul, clearly automation's been much more important - it's not even close,"
said Lawrence Katz, an economics professor at Harvard who studies labor and technological change.
No candidate talked much about automation on the campaign trail. Technology is not as convenient
a villain as China or Mexico, there is no clear way to stop it, and many of the technology companies
are in the United States and benefit the country in many ways.
Mr. Trump told a group of tech company leaders last Wednesday: "We want you to keep going with
the incredible innovation. Anything we can do to help this go along, we're going to be there for
you."
Andrew F. Puzder, Mr. Trump's pick for labor secretary and chief executive of CKE Restaurants,
extolled the virtues of robot employees over the human kind in an interview with Business Insider
in March. "They're always polite, they always upsell, they never take a vacation, they never show
up late, there's never a slip-and-fall, or an age, sex or race discrimination case," he said.
Globalization is clearly responsible for some of the job losses, particularly trade with
China during the 2000s, which led to the rapid loss of 2 million to 2.4 million net jobs, according
to research by economists including Daron Acemoglu and David Autor of M.I.T.
People who work in parts of the country most affected by imports generally have greater
unemployment and reduced income for the rest of their lives, Mr. Autor found in a paper published
in January. Still, over time, automation has had a far bigger effect than globalization, and would
have eventually eliminated those jobs anyway, he said in an interview. "Some of it is globalization,
but a lot of it is we require many fewer workers to do the same amount of work," he said. "Workers
are basically supervisors of machines."
When Greg Hayes, the chief executive of United Technologies, agreed to invest $16 million in
one of its Carrier factories as part of a Trump deal to keep some jobs in Indiana instead of moving
them to Mexico, he said the money would go toward automation.
"What that ultimately means is there will be fewer jobs," he said on CNBC....
Clarification of 3: that is, infant industry protection as traditionally done, i.e. "picking winners",
won't help. What would help is structural changes that make things relatively easier for small
enterprises and relatively harder for large ones.
Making direct lobbying of state and federal politicians by industry groups and companies a
crime punishable by 110% taxation of net income on all the participants would be a start.
What's Different About Stagnating Wages for Workers Without College Degrees
There seems to be a great effort to convince people that the displacement due to the trade
deficit over the last fifteen years didn't really happen. The New York Times contributed to this
effort with a piece * telling readers that over the long-run job loss has been primarily due to
automation not trade.
While the impact of automation over a long enough period of time certainly swamps the impact
of trade, over the last 20 years there is little doubt that the impact of the exploding trade
deficit has had more of an impact on employment. To make this one as simple as possible, we currently
have a trade deficit of roughly $460 billion (@ 2.6 percent of GDP). Suppose we had balanced trade
instead, making up this gap with increased manufacturing output.
Does the NYT want to tell us that we could increase our output of manufactured goods by $460
billion, or just under 30 percent, without employing more workers in manufacturing? That would
be pretty impressive. We currently employ more than 12 million workers in manufacturing, if moving
to balanced trade increase employment by just 15 percent we would be talking about 1.8 million
jobs. That is not trivial.
But this is not the only part of the story that is strange. We are getting hyped up fears over
automation even at a time when productivity growth (i.e. automation) has slowed to a crawl, averaging
just 1.0 percent annually over the last decade. The NYT tells readers:
"Over time, automation has generally had a happy ending: As it has displaced jobs, it has
created new ones. But some experts are beginning to worry that this time could be different. Even
as the economy has improved, jobs and wages for a large segment of workers - particularly men
without college degrees doing manual labor - have not recovered."
Hmmm, this time could be different? How so? The average hourly wage of men with just a high
school degree was 13 percent less in 2000 than in 1973. ** For workers with some college it was
down by more than 2.0 percent. In fact, stagnating wages for men without college degrees is not
something new and different, it has been going on for more than forty years. Hasn't this news
gotten to the NYT yet?
Inequality, technology, globalization, and the false assumptions that sustain current inequities
by Jared Bernstein
December 22nd, 2016 at 3:24 pm
Here's a great interview* with inequality scholar Branko Milanovic wherein he brings a much-needed
historical and international perspective to the debate (h/t: C. Marr). Many of Branko's points
are familiar to my readers: yes, increased trade has upsides, for both advanced and emerging economies.
But it's not hard to find significant swaths hurt by globalization, particularly workers in rich
economies who've been placed into competition with those in poorer countries. The fact that little
has been done to help them is one reason for president-elect Trump.
As Milanovic puts it:
"The problems with globalization arise from the fact that gains from it are not (and can never
be) evenly distributed. There would be always those who gain less than some others, or those who
lose even in absolute terms. But to whom can they "appeal" for redress? Only to their national
governments because this is how the world is politically organized. Thus national governments
have to engage in "mop up" operations to fix the negative effects of globalization. And this they
have not done well, led as they were by the belief that the trickle-down economics will take care
of it. We know it did not."
But I'd like to focus on a related point from Branko's interview, one that gets less attention:
the question of whether it was really exposure to global trade or to labor-saving technology that
is most responsible for displacing workers. What's the real problem here: is it the trade deficit
or the robots?
Branko cogently argues that "both technological change and economic polices responded to globalization.
The nature of recent technological progress would have been different if you could not employ
labor 10,000 miles away from your home base." Their interaction makes their relative contributions
hard to pull apart.
I'd argue that the rise of trade with China, from the 1990s to the 2007 crash, played a significant
role in moving US manufacturing employment from its steady average of around 17 million factory
jobs from around 1970 to 2000, to an average today that's about 5 million less (see figure below;
of course, manufacturing employment was falling as a share of total jobs over this entire period).
Over at Econlog I have a post that suggests the answer is no, CA deficits do not cost jobs.
But suppose I'm wrong, and suppose they do cost jobs. In that case, trade has been a major
net contributor to American jobs during the 21st century, as our deficit was about 4% of GDP during
the 2000 tech boom, and as large as 6% of GDP during the 2006 housing boom. Today it is only 2.6%
of GDP. So if you really believe that rising trade deficits cost jobs, you'd be forced to believe
that the shrinking deficits since 2000 have created jobs.
So why have manufacturing jobs plummeted since 2000? One answer is that the current account
deficit is the wrong figure, since it also includes our surplus in trade in services. If you just
look at goods, the deficit is closer to 4.2% of GDP.
But even that doesn't really explain very much, because it's slightly lower than the 4.35%
of GDP trade deficit in goods back in 2000. So again, the big loss of manufacturing jobs is something
of a mystery. Yes, we import more goods than we used to, but exports of goods have risen at about
the same rate since 2000. So why does it seem like trade has devastated our manufacturing sector?
Perhaps because trade interacts with automation. Not only do we lose jobs in manufacturing
to automation, but trade leads us to re-orient our production toward goods that use relatively
less labor (tech, aircraft, chemicals, farm produces, etc.), while we import goods like clothing,
furniture and autos.
So trade and automation are both parts of a bigger trend, Schumpeterian creative destruction,
which is transforming big areas of our economy. It's especially painful as during the earlier
period of automation (say 1950-2000) the physical output of goods was still rising fast. So the
blow of automation was partly cushioned by a rise in output. (Although not in the coal and steel
industries!) Since 2000, however, we've seen slower growth in physical output for a number of
reasons, including slower workforce growth, a shift to a service economy, and a home building
recession (which normally absorbs manufactured goods like home appliances, carpet, etc.) We are
producing more goods than ever, but with dramatically fewer workers.
Update: Steve Cicala sent me a very interesting piece on coal that he had published in Forbes.
Ironically, environmental regulations actually helped West Virginia miners, by forcing utilities
to install scrubbers that cleaned up emissions from the dirtier West Virginia coal. (Wyoming coal
has less sulfur.) He also discusses the issue of competition from natural gas.
The historical record is totally unambiguous. Protectionism always leads to wealth and industrial
development. Free trade leads you to the third world. This was true four hundred years ago with
mercantilist England and the navigation acts; it was true with Lincoln's tariffs in the 1860's,
it was true of East Asia post 1945.
Economists better abandon silly free trade if they want to have any credibility and not be
seen as quacks.
Washington (CNN)President-elect Donald Trump's transition team is discussing a proposal to
impose tariffs as high as 10% on imports, according to multiple sources.
A senior Trump transition official said Thursday the team is mulling up to a 10% tariff aimed
at spurring US manufacturing, which could be implemented via executive action or as part of a
sweeping tax reform package they would push through Congress.
Incoming White House Chief of Staff Reince Priebus floated a 5% tariff on imports in meetings
with key Washington players last week, according to two sources who represent business interests
in Washington. But the senior transition official who spoke to CNN Thursday on the condition of
anonymity said the higher figure is now in play.
Such a move would deliver on Trump's "America First" campaign theme, but risks drawing the
US into a trade war with other countries and driving up the cost of consumer goods in the US.
And it's causing alarm among business interests and the pro-trade Republican establishment.
The senior transition official said the transition team is beginning to find "common ground"
with House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady, pointing in particular
to the border adjustment tax measure included in House Republicans' "Better Way" tax reform proposal,
which would disincentivize imports through tax policy.
Aides to Ryan and Brady declined to say they had "common ground" with Trump, but acknowledged
they are in deep discussions with transition staffers on the issue.
Curbing free trade was a central element of Trump's campaign. He promised to rip up the North
American Free Trade Agreement with Mexico and Canada. He also vowed to take a tougher line against
other international trading partners, almost always speaking harshly of China but often including
traditional US allies such as Japan in his complaint that American workers get the short end of
the stick under current trade practices.
Gulf with GOP establishment
It is an area where there is a huge gulf between Trump's stated positions and traditional GOP
orthodoxy. Business groups and GOP establishment figures -- including Ryan and Senate Majority
Leader Mitch McConnell -- have been hoping the transition from the campaign to governing would
bring a different approach.
Ryan did signal in a CNBC interview earlier this month that Trump's goals of spurring US manufacturing
could be accomplished through "comprehensive tax reform."
"I'll tell him what I've been saying all along, which is we can get at what he's trying to
get at better through comprehensive tax reform," Ryan said.
The pro-business GOP establishment says the new Trump administration could make clear it would
withdraw from NAFTA unless Canada and Mexico entered new talks to modernize the agreement to reflect
today's economy. That would allow Trump to say he kept a promise to make the agreement fairer
to American workers without starting a trade war and exacerbating tensions with America's neighbors
and vital economic partners.
But there remain establishment jitters that Trump, who views his tough trade message as critical
to his election victory, will look for ways to make an early statement that he is serious about
reshaping the trade playing field.
And when Priebus told key Washington players that the transition is mulling a 5% tariff on
imports, the reaction was one of fierce opposition, according to two sources who represent business
interests in Washington and spoke on condition of anonymity because the conversations with the
Trump team were confidential.
Priebus, the sources said, was warned such a move could start trade wars, anger allies, and
also hurt the new administration's effort to boost the rate of economic growth right out of the
gate.
Role of Wilbur Ross
One of the sources said he viewed the idea as a trial balloon when first raised, and considered
it dead on arrival given the strong reaction in the business community -- and the known opposition
to such protectionist ideas among the GOP congressional leadership.
But this source voiced new alarm Tuesday after being told by allies within the Trump transition
that defending new tariffs was part of the confirmation "murder board" practice of Wilbur Ross,
the President-elect's choice for commerce secretary.
At least one business community organization is worried enough about the prospect of the tariff
it already has prepared talking points, obtained by CNN Wednesday night.
"This $100 billion tax on American consumers and industry would impose heavy costs on the
US economy, particularly for the manufacturing sector and American workers, with highly negative
political repercussions," according to the talking points. "Rather than using a trade policy
sledgehammer that would inflict serious collateral damage, the Trump administration should
use the scalpel of US trade remedy law to achieve its goals."
The talking points also claim the tariffs would lead to American job loss and result in a tax
to consumers, both of which would harm the US economy.
Trump aides have signaled that Ross is likely to be a more influential player in trade negotiations
than recent Commerce secretaries. Given that, the aides know his confirmation hearings are likely
to include tough questioning -- from both Democrats and Republicans -- about Trump's trade-related
campaign promises.
"The way it was cast to me was that (Trump) and Ross are all over it," said one source. "It
is serious."
The second source was less certain about whether the tariff idea was serious or just part of
a vigorous debate about policy options. But this source said the unpredictability of Trump and
his team had the business interests nervous.
The business lobbying community is confident the GOP leadership would push back on any legislative
effort to impose tariffs, which organizations like the Chamber of Commerce, the Business Roundtable,
the National Association of Manufactures and others, including groups representing farmers, believe
would lead to retaliation against US industries heavily dependent on exports.
But the sources aligned with those interests told CNN the conversation within the Trump transition
includes using executive authority allowed under existing trade laws. Different trade laws enacted
over the course of the past century allow the president to impose tariffs if he issues a determination
the United States is being subjected to unfair trade practices or faces an economic or national
security threat because of trade practices.
There are industries that are closely connected with the sovereignty of the country. That's
what neoliberals tend to ignore as they, being closet Trotskyites ("Financial oligarchy of all
countries unite!" instead of "Proletarian of all countries unite!" ;-) do not value sovereignty
and are hell bent on the Permanent Neoliberal Revolution to bring other countries into neoliberal
fold (in the form of color revolutions, or for smaller countries, direct invasions like in Iraq
and Libya ).
For example, if you depends of chips produced outside the country for your military or space
exploration, then sabotage is possible (or just pure fraud -- selling regular ships instead of
special tolerant to cosmic radiation or harsh conditions variant; actually can be done with the
support of internal neoliberal fifth column).
The same is probably true for cars and auto engines. If you do not produce domestically a variety
at least some domestic brans of cars and trucks, your military trucks and engines will be foreign
and that will cost you tremendous amount of money and you might depend for spare parts on you
future adversary. Also such goods are overprices to the heaven. KAS is a clear example of this
as they burn their money in the war with Yemen as there is no tomorrow making the US MIC really
happy.
So large countries with say over 100 million people probably need to think twice before jumping
into neoliberal globalization bandwagon and relying in imports for strategically important industries.
Neoliberal commenters here demonstrate complete detachment from the fact that like war
is an extension of politics, while politics is an extension of economics. For example, denying
imports can and is often used for political pressure.
That was one of factors that doomed the USSR. Not that the system has any chance -- it was
doomed after 1945 as did not provide for higher productivity then advanced capitalist economies.
But this just demonstrates the power of the US sanctions mechanism. Economic sanctions works
and works really well. The target country is essentially put against the ropes and if you unprepared
you can be knocked down.
For example now there are sanctions against Russia that deny them advanced oil exploration
equipment. And oil is an important source of Russia export revenue. So the effect of those narrow
prohibitions multiples by factor of ten by denying Russia export revenue.
That's how an alliance between Russia and China was forged by Obama administration. because
China does produce some of this equipment now. And Russia paid dearly for that signing huge multi-year
deals with China on favorable for China terms.
Now Trump want to play this game selectively designating China as "evil empire" and providing
a carrot for Russia. Will it works, or Russia can be wiser then donkeys, I do not know.
And look what countries are on the USA economic sanctions list: many entries are countries
that are somewhat less excited about the creation of the global neoliberal empire led by the USA.
KAS and Gulf monarchies are not on the list. So much about "spreading democracy".
The US propagandists usually call counties on which they impose sanction authoritarian
dictatorships to make such actions more politically correct, but the fact remains: The USA as
a global hegemon enjoys using economic pressure to crush dissidents and put vassals in line.
The problem with tariffs on China is an interesting reversion of the trend: manufacturing is
already in China and to reverse this process now is an expensive proposition. So alienating Chinese
theoretically means that some of USA imports might became endangered, despite huge geopolitical
weight of the USA. They denied export of rare metals to Japan in the past. They can do this for
Apple and without batteries Apple can just fold.
Also it is very easy to prohibit Apple sales in China of national security grounds (any US
manufacturer by definition needs to cooperate with NSA and other agencies). I think some countries
already prohibit the use of the USA companies produced cell phones for government officials.
So if Trump administration does something really damaging, for Chinese there are multiple ways
to skin the cat. Neoliberalism as a social system is past it pinnacle and that creates some problems
for the USA as the central player in the neoliberal world. The triumphal march of neoliberalism
over the globe ended almost a decade ago.
It appears not everyone is convinced that "the 30 year bond bull is dead." A quick glance
across US equity options today shows TLT (the long-end Treasury Bond ETF) is the most active with
call volumes (bullish bonds, lower rates) more than double their average
, with
over $1.3 billion notional in February $126 Calls (which will
payoff if rates drop to
around 2.00% by then
).
"... [Afterall, I don't think she really believes that the national debt really matters; she knows better than that and if she doesn't she doesn't deserve to be in the Fed Reserve.] ..."
"... [The above said, I'm still not sure that the Fed Reserve controls the Fed Funds rate. For the last so many decades the Fed Funds rate has followed the 13 week treasury market. Even the rate hike this last week was consistent with this. Which begs the question. Is the 13 week treasury anticipating the Fed rate hike? If so, the 13 week treasury seems to know when the Fed will blink. The easier explanation is that the Fed Reserve is simply tacking on their profit margin on top of the 13 week treasury. In which case, Trump's enemy isn't the Fed Reserve. Rather it's bond vigilantes on the short-end of the curve. Still if bond vigilantes really are the controlling influence, they were certainly slow to respond during the last two bubbles.] ..."
Companies in the S&P 500 spent about $3 trillion since 2011 to buy back
their own shares, often with borrowed money. It's part of a noble magic
called financial engineering, the simplest way to goose the all-important
metric of earnings per share (by lowering the number of shares outstanding).
And it creates buying pressure in the stock market that drives up share
prices.
With buybacks, you don't need to sell one extra iPhone to boost
your earnings per share. So the amounts have grown and grown. With
ultra-cheap money available to borrow endlessly, companies take on debt and
hollow out shareholder equity. It has worked like a charm. Stock prices have
soared. Declining revenues and earnings, no problem. But something is
happening that hasn't happened since the Financial Crisis.
Share buybacks in the third quarter plunged 28% year-over-year, to $115.6
billion, the biggest year-over-year dive since Q3 2009, according to
FactSet
. It was the second quarter in a row of declines, from the
glorious Q1 this year, when buybacks had reached $168 billion, behind only
Q3 2007 before it all came apart.
From that great Q1 2016 to Q3, buybacks plunged 31%, or by $52 billion.
"Only" 362 of the S&P 500 companies bought back shares in Q3, the second
lowest number in three years, with Q2 having been the lowest number (blue
line in the chart below).
Steve
,
December 21, 2016 at 8:05 am
One of the advantages of reading Naked Capitalism: I finally understood
what stock buybacks are about. So when proxy seasons arrives, and I get to
vote my 12.5 shares in the old SEP and IRA, I vote against the proposals.
Not that I expect to have much influence.
I suspect Q4 2016 will show a resurgence in corporate share buybacks.
Having the corporations they control borrow money and expend the cash to buy
their shares back at high prices maximizes personal financial gains for CEOs
from their stock option grants, and many corporate board members who are in
a position to approve these buybacks also benefit. Very few of these
individuals founded the companies they lead or have significantly
contributed to the organic growth of their organizations. In fact, in many
cases the reverse is true.
This practice merely appears to be another form of control looting to me.
I find it particularly troublesome when the corporations engaged in this
practice enjoy large government contracts, large numbers of employees are
subsequently laid off during economic downturns as an inevitable result of
the decline in corporations' financial resilience, and corporations seek
various forms of government assistance, including tax forbearances at the
state and local level.
There are ways to address this damaging practice. One way is to
aggressively raise taxes on executive stock option income. Another way is to
simply outlaw the practice.
If rates on long term bonds go up, then all this corporate debt will
eventually have to be rolled into something that causes pain.
And that's what is beginning to happen. Presumably because of Trump being
in office and the fiscal spigots being turned on.
I'm beginning to wonder if this is why Yellen is jawboning against fiscal
stimulus by Trump. It's not that her target is fiscal spending per se.
[Afterall, I don't think she really believes that the national debt really
matters; she knows better than that and if she doesn't she doesn't deserve
to be in the Fed Reserve.]
Rather, I'm thinking her real target is long
term bonds and trying to keep the rates down. To protect the debt load taken
on by the corporations.
Which would make Yellen even more evil of course. Because when it comes
down to cash flow to people vs asset inflation to corporations and the
wealthy, it would mean she's landing squarely on the latter.
Anyways, in theory the only weapon she's got really is the Fed Funds
rate which drives the short end of the curve. However, she could invert
the yield curve, which is the normal tell to market participants to get
out of the market in anticipation of a significant down-turn. So her
weapon vis-a-vis Trump is that she can tank the market. My advice to
Trump would be to call her on this and to use his bully pulpit to let his
constituency know the lengths that the Fed Reserve is willing to go to
(tank the market) to fight him on infrastructure spending.
If Trump really wants to go Full Monty and amp it up a notch, declare
that the Fed Reserve's primary interest is to protect the "wealth
effect". Such that the common bloke must be thrown under the bus. "becuz
inflation don't you know". Man how I would love to see Trump play this
hand.
[The above said, I'm still not sure that the Fed Reserve controls
the Fed Funds rate. For the last so many decades the Fed Funds rate has
followed the 13 week treasury market. Even the rate hike this last week
was consistent with this. Which begs the question. Is the 13 week
treasury anticipating the Fed rate hike? If so, the 13 week treasury
seems to know when the Fed will blink. The easier explanation is that the
Fed Reserve is simply tacking on their profit margin on top of the 13
week treasury. In which case, Trump's enemy isn't the Fed Reserve. Rather
it's bond vigilantes on the short-end of the curve. Still if bond
vigilantes really are the controlling influence, they were certainly slow
to respond during the last two bubbles.]
"And much of it is funded with debt" and that has been getting more
expensive. The Trump rally is likely due to an expectation of plus laissez
faire, whether it be intent or negligence, it matters not.
I'd like to see share buybacks on the same graph as relevant interest
rates, to get an idea of you much potential causation is there between
interest rates and share buybacks
Trump is not a fan of the stock market and will to nothing to protect it.
He has said repeatedly that the market is in a bubble. When it crashes,
he'll say he was right. This Trump rally is not his idea and investors will
be shocked when they finally realize stock prices mean absolutely nothing to
him. This is not the metric he will use to measure his success, unlike every
President before him for the last 20 years.
It's not regulation per se is deficient, it is regulation under neoliberal regime, were government
is captured by financial oligarchy ;-). But that understanding is foreign to WSJ with its neoliberal
agenda :-(.
Notable quotes:
"... Impressionable journalists finally meet George Stigler. ..."
"... The secret recordings were made by Carmen Segarra, who went to work as an examiner at the New York Fed in 2011 but was fired less than seven months later in 2012. She has filed a wrongful termination lawsuit against the regulator and says Fed officials sought to bury her claim that Goldman had no firm-wide policy on conflicts-of-interest. Goldman says it has had such policies for years, though on the same day Ms. Segarra's revelations were broadcast, the firm added new restrictions on employees trading for their own accounts. ..."
"... On the recordings, regulators can be heard doing what regulators do-revealing the limits of their knowledge and demonstrating their reluctance to challenge the firms they regulate. At one point Fed officials suspect a Goldman deal with Banco Santander may have been "legal but shady" in the words of one regulator, and should have required Fed approval. But the regulators basically accept Goldman's explanations without a fight. ..."
"... The journalists have also found evidence in Ms. Segarra's recordings that even after the financial crisis and the supposed reforms of the Dodd-Frank law, the New York Fed remained a bureaucratic agency resistant to new ideas and hostile to strong-willed, independent-minded employees. In government? ..."
"... "as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit." ..."
"... Once one understands the inevitability of regulatory capture, the logical policy response is to enact simple laws that can't be gamed by the biggest firms and their captive bureaucrats. ..."
"... And it means considering economist Charles Calomiris's plan to automatically convert a portion of a bank's debt into equity if the bank's market value falls below a healthy level. ..."
Impressionable journalists finally meet George Stigler.
The financial scandal du jour involves leaked audio recordings that purport to show that
regulators at the Federal Reserve Bank of New York were soft on
Goldman Sachs . Say it ain't so.
... ... ...
The secret recordings were made by Carmen Segarra, who went to work as an examiner at the
New York Fed in 2011 but was fired less than seven months later in 2012. She has filed a wrongful
termination lawsuit against the regulator and says Fed officials sought to bury her claim that Goldman
had no firm-wide policy on conflicts-of-interest. Goldman says it has had such policies for years,
though on the same day Ms. Segarra's revelations were broadcast, the firm added new restrictions
on employees trading for their own accounts.
The New York Fed won against Ms. Segarra in district court, though the case is on appeal. The
regulator also notes that Ms. Segarra "demanded $7 million to settle her complaint." And last week
New York Fed President
William Dudley said,
"We are going to keep striving to improve, but I don't think anyone should question our motives or
what we are trying to accomplish."
On the recordings, regulators can be heard doing what regulators do-revealing the limits of
their knowledge and demonstrating their reluctance to challenge the firms they regulate. At one point
Fed officials suspect a Goldman deal with Banco Santander may have been "legal but shady" in the
words of one regulator, and should have required Fed approval. But the regulators basically accept
Goldman's explanations without a fight.
The sleuths at the ProPublica website, working with a crack team of investigators from public
radio, also seem to think they have another smoking gun in one of Ms. Segarra's conversations that
was not recorded but was confirmed by another regulator. Ms. Seest means. For example, a company
offering securities is exempt from some registration requirements if it is only selling to accredited
investors, such as people with more than $1 million in net worth, excluding the value of primary
residences.
The journalists have also found evidence in Ms. Segarra's recordings that even after the financial
crisis and the supposed reforms of the Dodd-Frank law, the New York Fed remained a bureaucratic agency
resistant to new ideas and hostile to strong-willed, independent-minded employees. In government?
***
Enter George Stigler, who published his famous essay "The Theory of Economic Regulation" in the
spring 1971 issue of the Bell Journal of Economics and Management Science. The University of Chicago
economist reported empirical data from various markets and concluded that "as a rule, regulation
is acquired by the industry and is designed and operated primarily for its benefit."
Stigler knew he was fighting an uphill battle trying to persuade his fellow academics. "The idealistic
view of public regulation is deeply imbedded in professional economic thought," he wrote. But thanks
to Stigler, who would go on to win a Nobel prize, many economists have studied the operation and
effects of regulation and found similar results.
A classic example was the New York Fed's decision to let Citigroup stash $1.2 trillion
of assets-including more than $600 billion of mortgage-related securities-in off-balance-sheet vehicles
before the financial crisis. That's when Tim Geithner ran the New York Fed and Jack Lew was at Citigroup.
Once one understands the inevitability of regulatory capture, the logical policy response
is to enact simple laws that can't be gamed by the biggest firms and their captive bureaucrats.
This means repealing most of Dodd-Frank and the so-called Basel rules and replacing them with a simple
requirement for more bank capital-an equity-to-asset ratio of perhaps 15%. It means bringing back
bankruptcy for giant firms instead of resolution at the discretion of political appointees. And
it means considering economist Charles Calomiris's plan to automatically convert a portion of a bank's
debt into equity if the bank's market value falls below a healthy level.
"... ...in 2016, 96 percent of all new vehicle sales featured a combustion engine. IHS Markit estimates the average vehicle life globally to be about 15 years, which means that the impact of new vehicle technologies is expected to take time to materially affect the vehicle fleet and overall fuel demand. ..."
...in 2016, 96 percent of all new vehicle sales featured a combustion engine. IHS Markit
estimates the average vehicle life globally to be about 15 years, which means that the impact of
new vehicle technologies is expected to take time to materially affect the vehicle fleet and
overall fuel demand.
Proved reserves of crude oil in the U.S. declined by 4.7 billion barrels or 11.8 percent from
their year-end 2014 level to 35.2 BBbls at year-end 2015. Natural gas proved reserves decreased
64.5 Tcf to 324.3 Tcf, a 16.6 percent decline.
... ... ...
Proved reserves are volumes of oil and natural gas that geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions.
"... Only John F. Kennedy directly challenged it, firing CIA Director Allen Dulles after the Bay of Pigs disaster. He was assassinated, and whether or not CIA involvement is ever conclusively proven, the allegations have been useful to the agency, keeping politicians in line. The Deep State also co-opted the media, keeping it in line with a combination of fear and favor. ..."
"... Why has the US been involved in long, costly, bloody, and inconclusive wars in Afghanistan and Iraq? ..."
"... Why should the US get involved in similar conflicts in Syria, Libya, Somalia, Yemen, Iran, and other Middle Eastern and Northern African hotspots? ..."
"... Isn't such involvement responsible for blowback terrorism and refugee flows in both Europe and the US? ..."
"... Have "free trade" agreements and porous borders been a net benefit or detriment to the US? Why is the banking industry set up for periodic crises that inevitably require government bail-outs? ..."
"... How has encouraging debt and speculation at the expense of savings and investment helped the US economy? ..."
"... The shenanigans in the US after Trump's election-violent protests, hysterical outbursts, the vote recount effort, the proof-free Russian hacking allegations, "fake news," and the attempt to sway electoral college electors-are the desperate screams of those trapped inside. ..."
"... Regrettably, the building analogy is imperfect, because it implies that those inside are helpless and that the collapse will only harm them. In its desperation, incompetence, and corrupt nihilism, the Deep State can wreak all sorts of havoc, up to and including the destruction of humanity. Trump represents an opportunity to strike a blow against the Deep State, but the chances it will be lethal are minimal and the dangers obvious. ..."
The pathetic attempts to undo Donald Trump's victory are signs of desperation, not strength, in
the Deep State.
The post World War II consensus held that the USSR's long-term goal was world domination. That
assessment solidified after the Soviets detonated an atomic bomb in 1949. A nuclear arms race, a
space race, maintenance of a globe-spanning military, political, and economic confederation, and
a huge expansion of the size and power of the military and intelligence complex were justified by
the Soviet, and later, the Red Chinese threats. Countering those threats led the US to use many of
the same amoral tactics that it deplored when used by its enemies: espionage, subversion, bribery,
repression, assassination, regime change, and direct and proxy warfare.
Scorning principles of limited government, non-intervention in other nations' affairs, and individual
rights, the Deep State embraced the anti-freedom mindset of its purported enemies, not just towards
those enemies, but toward allies and the American people. The Deep State gradually assumed control
of the government and elected officials were expected to adhere to its policies and promote its propaganda.
Only John F. Kennedy directly challenged it, firing CIA Director Allen Dulles after the Bay of
Pigs disaster. He was assassinated, and whether or not CIA involvement is ever conclusively proven,
the allegations have been useful to the agency, keeping politicians in line. The Deep State also
co-opted the media, keeping it in line with a combination of fear and favor.
Since its ascension in the 1950s, the biggest threat to the Deep State has not been its many and
manifest failures, but rather what the naive would regard as its biggest success: the fall of the
Soviet Union in 1991. Much of the military-industrial complex was suddenly deprived of its reason
for existence-the threat was gone. However, a more subtle point was lost.
The Soviet Union has been the largest of statism's many failures to date. Because of the Deep
State's philosophical blinders, that outcome was generally unforeseen. The command and control philosophy
at the heart of Soviet communism was merely a variant on the same philosophy espoused and practiced
by the Deep State. Like the commissars, its members believe that "ordinary" people are unable to
handle freedom, and that their generalized superiority entitles them to wield the coercive power
of government.
With "irresponsible" elements talking of peace dividends and scaling back the military and the
intelligence agencies, the complex was sorely in need of a new enemy . Islam suffers the same critical
flaw as communism-command and control-and has numerous other deficiencies, including intolerance,
repression, and the legal subjugation of half its adherents. The Deep State had to focus on the world
conquest ideology of some Muslims to even conjure Islam as a plausible foe. However, unlike the USSR,
they couldn't claim that sect and faction-ridden Islam posed a monolithic threat, that the Islamic
nations were an empire or a federation united towards a common goal, or that their armaments (there
are under thirty nuclear weapons in the one Islamic nation, Pakistan, that has them) could destroy
the US or the entire planet.
There was too much money and power at stake for the complex to shrink. While on paper Islam appeared
far weaker than communism, the complex had one factor in their favor: terrorism is terrifying. In
the wake of the 9/11 attacks, Americans surrendered liberties and gave the Deep State carte blanche
to fight a war on terrorism that would span the globe, target all those whom the government identified
as terrorists, and never be conclusively won or lost. Funding for the complex ballooned, the military
was deployed on multiple fronts, and the surveillance state blossomed. Most of those who might have
objected were bought off with expanded welfare state funding and programs (e.g. George W. Bush's
prescription drug benefit, Obamacare).
What would prove to be the biggest challenge to the centralization and the power of the Deep State
came, unheralded, with the invention of the microchip in the late 1950s. The Deep State could not
have exercised the power it has without a powerful grip on information flow and popular perception.
The microchip led to widespread distribution of cheap computing power and dissemination of information
over the decentralized Internet. This dynamic, organically adaptive decentralization has been the
antithesis of the command-and-control Deep State, which now realizes the gravity of the threat. Fortunately,
countering these technologies has been like trying to eradicate hordes of locusts.
The gravest threat, however, to the Deep State is self-imposed: it's own incompetence. Even the
technologically illiterate can ask questions for which it has no answers.
Why has the US been involved in long, costly, bloody, and inconclusive wars in Afghanistan
and Iraq?
Why should the US get involved in similar conflicts in Syria, Libya, Somalia, Yemen, Iran,
and other Middle Eastern and Northern African hotspots?
Isn't such involvement responsible for blowback terrorism and refugee flows in both
Europe and the US?
Have "free trade" agreements and porous borders been a net benefit or detriment to the
US? Why is the banking industry set up for periodic crises that inevitably require government
bail-outs? (SLL claims no special insight into the nexus between the banking-financial sector
and the Deep State, other than to note that there is one.) Why does every debt crisis result in
more debt?
How has encouraging debt and speculation at the expense of savings and investment helped
the US economy?
The Deep State can't answer or even acknowledge these questions because they all touch on its
failures.
Brexit, Donald Trump, other populist, nationalist movements catching fire, and the rise of the
alternative media are wrecking balls aimed at an already structurally unsound and teetering building
that would eventually collapse on its own. The shenanigans in the US after Trump's election-violent
protests, hysterical outbursts, the vote recount effort, the proof-free Russian hacking allegations,
"fake news," and the attempt to sway electoral college electors-are the desperate screams of those
trapped inside.
Regrettably, the building analogy is imperfect, because it implies that those inside are helpless
and that the collapse will only harm them. In its desperation, incompetence, and corrupt nihilism,
the Deep State can wreak all sorts of havoc, up to and including the destruction of humanity. Trump
represents an opportunity to strike a blow against the Deep State, but the chances it will be lethal
are minimal and the dangers obvious.
The euphoria over his victory cannot obscure a potential consequence: it may hasten and amplify
the destruction and resultant chaos when the Deep State finally topples . Anyone who thinks Trump's
victory sounds an all clear is allowing hope to triumph over experience and what should have been
hard-won wisdom.
"War on Terror" + "Refugee Humanitarian Crisis" =European Clusterfuck
Or
"War on Drugs" + "Afghan Opium/Nicaraguan Cocaine" =Police State America
Both hands (Left/Right) to crush Liberty
Mano-A-Mano -> Cheka_Mate Dec 22, 2016 8:54 PM
The DEEP STATE pretends they hate Trump, gets him in office, hoodwinks the sheeple into
believing they voted for him, while they still retain control.
Voila!
TeamDepends -> unrulian Dec 22, 2016 8:55 PM
Remember the Maine! Remember the Lusitania! Remember the USS Liberty! Remember the Gulf of
Tonkin! Never forget.
Withdrawn Sanction Dec 22, 2016 8:52 PM
"In the wake of the 9/11 attacks, Americans surrendered liberties and gave the Deep State
carte blanche..."
What a load of crap. The Deep State CAUSED 9/11 and then STOLE Americans' liberties.
StraightLineLogic: Linear thinker, indeed.
WTFUD Dec 22, 2016 8:56 PM
Shakespeare would have had a field-day with this Material; Comic Tragedy!
BadDog Dec 22, 2016 9:00 PM
Let justice be done, though the heavens fall.
red1chief Dec 22, 2016 9:09 PM
Funny how a guy loading up his administration with Vampire Squids is thought to be disliked
by the Deep State. Deep State psy ops never ceases to amaze.
Krugman is a neoliberal stooge. Since when Social Security is an entitlement program. If you start
contributing at 25 and retire at 67 (40 years of monthly contributions), you actually get less then
you contribute, unless you live more then 80 years. It just protects you from "free market casino".
Notable quotes:
"... A "contribution" theory of what a proper distribution of income might be can only be made coherent if there are constant returns to scale in the scarce, priced, owned factors of production. Only then can you divide the pile of resources by giving to each the marginal societal product of their work and of the resources that they own. ..."
"... n a world--like the one we live in--of mammoth increasing returns to unowned knowledge and to networks, no individual and no community is especially valuable. Those who receive good livings are those who are lucky -- as Carrier's workers in Indiana have been lucky in living near Carrier's initial location. It's not that their contribution to society is large or that their luck is replicable: if it were, they would not care (much) about the departure of Carrier because there would be another productive network that they could fit into a slot in. ..."
"... If not about people, what is an economy about? ..."
"... I hadn't realized that Democrats now view Social Security and Medicare as "government handouts". ..."
"... Some Democrats like Krugman are Social Darwinists. ..."
"... PK is an ignorant vicious SOB. Many of those "dependent hillbillies" PK despises paid SS and Medicare taxes for many decades, most I know have never been on foos stamps, and if they are on disability it is because they did honest hard work, something PK knows nothing about. What an ignorant jerk. ..."
"... What is a very highly subsidized industry that benefits Delong and Krugman? Higher education. Damn welfare queens! :) ..."
"... No Krugman is echoing the tribalism of Johnny Bakho. These people won't move or educate themselves or "skill up" so they deserve what they get. Social darwinism. ..."
"... People like Bakho are probably anti-union as well. They're seen as relics of an earlier age and economically "uncompetitve." See Fred Dobbs below. That's the dog whistle about the "rust belt." ..."
"... Paul Krugman's reputation, formerly that of a a noted economic, succumbed after a brief struggle to Trump Derangement Syndrome. Friends said Mr Krugman's condition had been further aggravated by cognitive dissonance from a severely challenged worldview. ..."
"... He is survived by the New York Times, also said to be in failing health. ..."
"... For a long time DeLong was mocking the notion of "economic anxiety" amongst the voters. Does this blog post mean he's rethinking that idea? ..."
"... The GOP has a long history of benefitting from the disconnect where a lot of their voters are convinced that when government money goes to others (sometimes even within their own white congregations), then it is not deserved. ..."
Brad DeLong has an interesting meditation * on markets and political demands - inspired by
a note from Noah Smith ** - that offers food for thought. I wonder, however, if Brad's discussion
is too abstract; and I also wonder whether it fully recognizes the disconnect between what Trump
voters think they want and reality. So, an entry of my own.
What Brad is getting at is the widespread belief by, well, almost everyone that they are entitled
to - have earned - whatever good hand they have been dealt by the market economy. This is reflected
in the more or less universal belief of the affluent that they deserve what they have; you could
see this in the rage of rentiers at low interest rates, because it's the Federal Reserve's job
to reward savers, right? In this terrible political year, the story was in part one of people
in Appalachia angrily demanding a return of the good jobs they used to have mining coal - even
though the world doesn't want more coal given fracking, and it can get the coal it still wants
from strip mines and mountaintop removal, which don't employ many people.
And what Brad is saying, I think, is that what those longing for the return to coal want is
those jobs they deserve, where they earn their money - not government handouts, no sir.
A fact-constrained candidate wouldn't have been able to promise such people what they want;
Trump, of course, had no problem.
But is that really all there is? Working-class Trump voters do, in fact, receive a lot of government
handouts - they're almost totally dependent on Social Security for retirement, Medicare for health
care when old, are quite dependent on food stamps, and many have recently received coverage from
Obamacare. Quite a few receive disability payments too. They don't want those benefits to go away.
But they managed to convince themselves (with a lot of help from Fox News etc) that they aren't
really beneficiaries of government programs, or that they're not getting the "good welfare", which
only goes to Those People.
And you can really see this in the regional patterns. California is an affluent state, a heavy
net contributor to the federal budget; it went 2-1 Clinton. West Virginia is poor and a huge net
recipient of federal aid; it went 2 1/2-1 Trump.
I don't think any kind of economic analysis can explain this. It has to be about culture and,
as always, race.
Regional Policy and Distributional Policy in a World Where People Want to Ignore the Value
and Contribution of Knowledge- and Network-Based Increasing Returns
Pascal Lamy: "When the wise man points at the moon, the fool looks at the finger..."
Perhaps in the end the problem is that people want to pretend that they are filling a valuable
role in the societal division of labor, and are receiving no more than they earn--than they contribute.
But that is not the case. The value--the societal dividend--is in the accumulated knowledge
of humanity and in the painfully constructed networks that make up our value chains.
A "contribution" theory of what a proper distribution of income might be can only be made
coherent if there are constant returns to scale in the scarce, priced, owned factors of production.
Only then can you divide the pile of resources by giving to each the marginal societal product
of their work and of the resources that they own.
That, however, is not the world we live in.
In a world--like the one we live in--of mammoth increasing returns to unowned knowledge
and to networks, no individual and no community is especially valuable. Those who receive good
livings are those who are lucky -- as Carrier's workers in Indiana have been lucky in living near
Carrier's initial location. It's not that their contribution to society is large or that their
luck is replicable: if it were, they would not care (much) about the departure of Carrier because
there would be another productive network that they could fit into a slot in.
All of this "what you deserve" language is tied up with some vague idea that you deserve what
you contribute--that what your work adds to the pool of society's resources is what you deserve.
This illusion is punctured by any recognition that there is a large societal dividend to be
distributed, and that the government can distribute it by supplementing (inadequate) market wages
determined by your (low) societal marginal product, or by explicitly providing income support
or services unconnected with work via social insurance. Instead, the government is supposed to,
somehow, via clever redistribution, rearrange the pattern of market power in the economy so that
the increasing-returns knowledge- and network-based societal dividend is predistributed in a relatively
egalitarian way so that everybody can pretend that their income is just "to each according to
his work", and that they are not heirs and heiresses coupon clipping off of the societal capital
of our predecessors' accumulated knowledge and networks.
On top of this we add: Polanyian disruption of patterns of life--local communities, income
levels, industrial specialization--that you believed you had a right to obtain or maintain, and
a right to believe that you deserve. But in a market capitalist society, nobody has a right to
the preservation of their local communities, to their income levels, or to an occupation in their
industrial specialization. In a market capitalist society, those survive only if they pass a market
profitability test. And so the only rights that matter are those property rights that at the moment
carry with them market power--the combination of the (almost inevitably low) marginal societal
products of your skills and the resources you own, plus the (sometimes high) market power that
those resources grant to you.
This wish to believe that you are not a moocher is what keeps people from seeing issues of
distribution and allocation clearly--and generates hostility to social insurance and to wage supplement
policies, for they rip the veil off of the idea that you deserve to be highly paid because you
are worth it. You aren't.
And this ties itself up with regional issues: regional decline can come very quickly whenever
a region finds that its key industries have, for whatever reason, lost the market power that diverted
its previously substantial share of the knowledge- and network-based societal dividend into the
coffers of its firms. The resources cannot be simply redeployed in other industries unless those
two have market power to control the direction of a share of the knowledge- and network-based
societal dividend. And so communities decline and die. And the social contract--which was supposed
to have given you a right to a healthy community--is broken.
As I have said before, humans are, at a very deep and basic level, gift-exchange animals. We
create and reinforce our social bonds by establishing patterns of "owing" other people and by
"being owed". We want to enter into reciprocal gift-exchange relationships. We create and reinforce
social bonds by giving each other presents. We like to give. We like to receive. We like neither
to feel like cheaters nor to feel cheated. We like, instead, to feel embedded in networks of mutual
reciprocal obligation. We don't like being too much on the downside of the gift exchange: to have
received much more than we have given in return makes us feel very small. We don't like being
too much on the upside of the gift exchange either: to give and give and give and never receive
makes us feel like suckers.
PK is an ignorant vicious SOB. Many of those "dependent hillbillies" PK despises paid SS and
Medicare taxes for many decades, most I know have never been on foos stamps, and if they are on
disability it is because they did honest hard work, something PK knows nothing about. What an
ignorant jerk.
Exactly the same could be said about many of those inner city minorities that the "dependent hillbillies"
look down on as "welfare queens". That may be one of the reasons they take special issues with
"food stamps", because in contrast to the hillbillies, inner city poor people cannot grow their
own food. What Krugman is pointing out is the hypocrisy of their tribalism - and also the idiocy,
because the dismantling of society would ultimately hurt the morons that voted GOP into power
this round.
"What Krugman is pointing out is the hypocrisy of their tribalism "
No Krugman is echoing the tribalism of Johnny Bakho. These people won't move or educate
themselves or "skill up" so they deserve what they get. Social darwinism.
People like Bakho are probably anti-union as well. They're seen as relics of an earlier age
and economically "uncompetitve." See Fred Dobbs below. That's the dog whistle about the "rust
belt."
His tone is supercilious and offensive. But your argument is that they are not "dependent" because
they earned every benefit they get from the government. I think his point is that "dependent"
is not offensive -- the term jus reflects how we all depend on government services. DeLong makes
the point much better in the article quoted by anne above.
Paul Krugman's reputation, formerly that of a a noted economic, succumbed after a brief
struggle to Trump Derangement Syndrome. Friends said Mr Krugman's condition had been further aggravated
by cognitive dissonance from a severely challenged worldview.
He is survived by the New York Times, also said to be in failing health.
The New York Times is easily the finest newspaper in the world, is broadly recognized as such
and is of course flourishing. Such an institution will always have sections or editors and writers
of relative strength but these relative strengths change over time as the newspaper continually
changes.
NYT Co. to revamp HQ, vacate eight floors in consolidation
"In an SEC filing, New York Times Co. discloses a staff communication it provided today to
employees about a revamp of its headquarters -- including consolidating floors.
The company will vacate at least eight floors, consolidating workspaces and allowing for "significant"
rental income, the memo says."
The GOP has a long history of benefitting from the disconnect where a lot of their voters
are convinced that when government money goes to others (sometimes even within their own white
congregations), then it is not deserved. But if that same government money goes to themselves
(or their real close relatives), then it is a hard earned and well-deserved payback for their
sacrifices and tax payments. So the GOP leadership has always called it "saving social security"
and "cracking down on fraud" rather than admitting to their attempts to dismantle those programs.
The Dems better be on the ball and call it what it is. If you want to save those programs you
just have to prevent rich people from wiggling out of paying for them (don't repeal the Obamacare
medicare taxes on the rich).
On the Pk piece. I think it is really about human dignity, and the need for it. There were a lot
of factors in this horrific election, but just as urban blacks need to be spared police brutality,
rural whites need a dignified path in their lives. Everyone, united, deserves such a path.
This is a real challenge for economists; how do we rebuild the rust belt (which applies to
areas beyond the literal rust belt).
If we do not, we risk Trump 2.0, which could be very scary indeed.
I agree to a point, but what the piece is about is that in search of a solution to the problems
of the rustbelt (whatever the definition is),people voted for Trump who had absolutely no plan
to solve such a problem, other than going back to the future and redoing Nafta and getting rid
of regulations.
Meanwhile, that vote also meant that the safety net that helps all Americans in trouble was
being placed in severe risk.
Those voters were fixed on his rhetoric and right arm extended while his left hand was grabbing
them by the (in deference to Anne I will not say the words, but Trump himself has said one of
them and the other is the male version).
Really? You didn't seem to before. You'd say what Duy or Noah Smith or DeLong were mulling about was
off-limits. You'd ban them from the comment section if you could. "This is a real challenge for economists; how do we rebuild the rust belt (which applies to
areas beyond the literal rust belt).
If we do not, we risk Trump 2.0, which could be very scary indeed." I don't see why this is such a controversial point for centrist like Krugman. How do we appeal to the white working class without contradicting our principles?
By promoting policies that raise living standards. By delivering, which mean left-wing policies
not centrist tinkering. It's the Clinton vs. Sanders primary. Hillary could have nominated Elizabeth Warren as her VP candidate but her corporate masters
wouldn't let her.
"Meanwhile, that vote also meant that the safety net that helps all Americans in trouble was being
placed in severe risk."
That safety net is an improvement over 1930. But it's been fraying so badly over the last 20-30
years that it's almost lost all meaning. It's something people turn to before total destitution,
but for rebuilding a life? A sick joke, filled with petty hassles and frustrations.
And the fraying has been a solidly bipartisan project. Who can forget welfare "reform"?
So maybe the yokels you're blaming for the 10,000-th time might not buy your logic or your
intentions.
... At the height of their influence in the 1950s, labor unions could claim to represent about
1 of every 3 American workers. Today, it's 1 in 9 - and falling.
Some have seen the shrinking size and waning influence of labor unions as a sign that the US
economy is growing more flexible and dynamic, but there's mounting evidence that it is also contributing
to slow wage growth and the rise in inequality. ...
(Union membership) NY 24.7%, MA 12.4%, SC 2.1%
... Are unions faring any better here in Massachusetts?
While Massachusetts's unions are stronger than average, it's not among the most heavily unionized
states. That honor goes to New York, where 1 in every 4 workers belongs to a union. After New
York, there are 11 other states with higher union membership rates then Massachusetts.
Here too, though, the decline in union membership over time has been steep.
... In 2015, 30 states and the District of Columbia had union membership rates below
that of the U.S. average, 11.1 percent, and 20 states had rates above it. All states
in the East South Central and West South Central divisions had union membership rates
below the national average, and all states in the Middle Atlantic and Pacific divisions
had rates above it. Union membership rates increased over the year in 24 states and
the District of Columbia, declined in 23 states, and were unchanged in 3 states.
(See table 5.)
Five states had union membership rates below 5.0 percent in 2015: South Carolina
(2.1 percent), North Carolina (3.0 percent), Utah (3.9 percent), Georgia (4.0 percent),
and Texas (4.5 percent).
Two states had union membership rates over 20.0 percent in
2015: New York (24.7 percent) and Hawaii (20.4 percent).
State union membership levels depend on both the employment level and the union
membership rate. The largest numbers of union members lived in California (2.5 million)
and New York (2.0 million).
Roughly half of the 14.8 million union members in the
U.S. lived in just seven states (California, 2.5 million; New York, 2.0 million;
Illinois, 0.8 million; Pennsylvania, 0.7 million; and Michigan, Ohio, and New Jersey,
0.6 million each), though these states accounted for only about one-third of wage and
salary employment nationally.
(It appears that New England union participation
lags in the northeast, and also in the rest of
the US not in the Red Zone.)
I have noted before that New England
is doing better 'than average' (IMO)
because of high-tech industry & education.
Not necessarily because of a lack of
unionization, which is prevalent here
in public education & among service
workers. Note that in higher ed,
much here is private.
Private industry here traditionally
is not heavily unionized, although
that is probably not the case
among defense corps.
As to causation, I think the
implication is that 'Dems dealing
with unions' has not been working
all that well, recovery-wise,
particularly in the rust belt.
That must have as much to do with
industrial management as it does
with labor, and the ubiquitous
on-going industrial revolution.
Everybody needs, and desperately crave, self-confidence and dignity. In white rural culture that
has always been connected to the old settler mentality and values of personal "freedom" and "independence".
It is unfortunate that this freedom/independence mythology has been what attracted all the immigrants
from Europe over here. So it is as strongly engrained (both in culture and individual values)
as it is outdated and counterproductive in the world of the future. I am not sure that society
can help a community where people find themselves humiliated by being helped (especially by bad
government). Maybe somehow try to get them to think of the government help as an earned benefit?
"... The essence of voting the lesser of two evils: "To comfortable centrists like pgl, the Democrats should be graded on a curve. As long as they're better than the awful Republicans, then they're good enough and beyond criticism." ..."
"... These Wall Street Democrats can rest assured that Democrats will surely get their turn in power in 4-8 years...after Trump thoroughly screws things up. And then Democrats will proceed to screw things up themselves...as we learned from Obama and Hillary's love of austerity and total disinterest in the economic welfare of the vast majority. ..."
"... In case you didn't notice, Democrats did nothing about the minimum wage 2009-2010. ..."
"... Many Democratic candidates won't even endorse minimum wage increase in states where increases win via initiative. They preferred to lose elections to standing up for minimum wage increases. ..."
Peter K.... The essence of voting the lesser of two evils: "To comfortable centrists like pgl,
the Democrats should be graded on a curve. As long as they're better than the awful Republicans,
then they're good enough and beyond criticism."
These Wall Street Democrats can rest assured that Democrats will surely get their turn in power
in 4-8 years...after Trump thoroughly screws things up. And then Democrats will proceed to screw
things up themselves...as we learned from Obama and Hillary's love of austerity and total disinterest
in the economic welfare of the vast majority.
To pgl and his ilk, Obama was great as long as he said the right things...regardless of what
he actually did. Hillary didn't even have to say the right things...she only had to be a Wall
Street Democrat for pgl to be enthusiastic about her.
In case you didn't notice, Democrats did nothing about the minimum wage 2009-2010.
At a minimum,
they could have taken their dominance then to enact increases for 2010-2016 or to index increases
to inflation. Instead, Pelosi, Reid and Obama preferred to do nothing.
Many Democratic candidates won't even endorse minimum wage increase in states where increases
win via initiative. They preferred to lose elections to standing up for minimum wage increases.
"... At some point the GOP has to decide how much of Trump's populist agenda they can stuff in the toilet without inducing an uncontrollable backlash. ..."
"... The reason Trump won the GOP nomination was exactly because he claimed to reject traditional GOP policies and approaches. ..."
"... If the GOP just go ahead with a traditional "rule for the rich" policy (because they won) there could be serious fireworks ahead - provided the Dems can pull out a populist alternative policy by the the next election. ..."
"... I have no idea what's going to happen, but my guess is that Trump and the Republicans are going to completely sell out the "Trump voters." ..."
"... But they still tried to push through Social Security privatization even though everyone is against it. ..."
"... If recent history is any guide, incumbents get a second term regardless of how bad the economy is. Clinton, Bush, and Obama were all reelected despite a lousy economy. The only exception in recent memory was Bush 41. ..."
"... Upper class tax cuts were central to his policies. Anybody who believed he was anything other than an standard issue Republican would buy shares in Arizona swampland. ..."
"... trump did indeed state that he would give bigger tax cuts to the rich, repeatedly. the genius of trump's performance is that by never having a clear position his gullible followers were able to fill in the gaps using their own hopes and desires. ..."
"... That is correct, but also the weakness in his support. They will almost certainly be disappointed as the exact interpretations and choices between incompatible promises turns out to be different from the individuals hopes and desires. ..."
"... And consider how dysfunction from laissez faire healthcare policy readoption leads to rising prices/costs above current trend to limit disposable income even more, it will be amazing if we do not have stagnation and worse for the bulk of society. ..."
"... Bush implemented and expanded a community health clinic system, that reallnwoukd be a nice infrastructure play for the US, but this Congress is more likely to disinvest here. They certainly don't want these do-gooder nonprofits competing against the doctor establishment. ..."
"... The question is first of all whether Trump can bully the Fed away from their current and traditional course (which would not allow much of a stimulus, before they cancelled it out with rate hikes). ..."
"... Second whether the Fed itself having been traditionally prone to support GOP presidents (see inconsistencies in Greenspan's policies during Clinton vs. Bush) will change its policies and allow higher inflation and wage growth than they have under any Dem president. ..."
"... The little people go to the credit channels to help finance the purchase of durables and higher education too. The Fed's actions themselves will see these credit prices ratchet, so nit good fir basic demand. Veblen goods will see more price rises as the buyers will have lots of rentier/lobbying gathered money to burn. ..."
At some point the GOP has to decide how much of Trump's populist agenda they can stuff in
the toilet without inducing an uncontrollable backlash.
The reason Trump won the GOP nomination was exactly because he claimed to reject traditional
GOP policies and approaches. It was the old tea-partiers insisting that their anti-rich/Anti-Wall
street sentiments be inserted into the GOP.
If the GOP just go ahead with a traditional "rule for the rich" policy (because they won)
there could be serious fireworks ahead - provided the Dems can pull out a populist alternative
policy by the the next election.
I have no idea what's going to happen, but my guess is that Trump and the Republicans are
going to completely sell out the "Trump voters."
George W. Bush wasn't completely horrible (besides Iraq, John Roberts, tax cuts for the rich,
the Patriot act and the surveillance state, Katrina, etc. etc. etc.). He was good on immigration,
world AIDS prevention, expensive Medicare drug expansion, etc.
But they still tried to push through Social Security privatization even though everyone
is against it.
To some extent Bush demoralized the Republican base and they didn't turn out in 2008.
If recent history is any guide, incumbents get a second term regardless of how bad the economy
is. Clinton, Bush, and Obama were all reelected despite a lousy economy. The only exception in
recent memory was Bush 41.
About the only thing that can derail Trump is a big recession in 2019.
"The reason Trump won the GOP nomination was exactly because he claimed to reject traditional
GOP policies and approaches."
While generally enthusiastically embracing them. Upper class tax cuts were central to his
policies. Anybody who believed he was anything other than an standard issue Republican would buy
shares in Arizona swampland.
He never came out directly saying or tweeting that he would give bigger tax cuts to the rich than
anybody else - he said he would give bigger tax cuts. It is true that people with a college education
had an easy time figuring him out even before the election. But the populist messages he campaigned
on were anti-establishment including suggesting that the "hedge-fund guys" were making a killing
by being taxed at a lower rate.
trump did indeed state that he would give bigger tax cuts to the rich, repeatedly. the genius
of trump's performance is that by never having a clear position his gullible followers were able
to fill in the gaps using their own hopes and desires.
"his gullible followers were able to fill in the gaps using their own hopes and desires"
That is correct, but also the weakness in his support. They will almost certainly be disappointed
as the exact interpretations and choices between incompatible promises turns out to be different
from the individuals hopes and desires. The reason Trump was able to beat even a Tea party
darling, was the backlash against big money having taken over the Tea party. The backlash against
Trump_vs_deep_state being "taken over by big money" interest will be interesting to observe, especially if
the Dems find the right way to play it.
Following up on Johnny Bakho's comment below, let's assume that average wage growth YoY for nonsupervisory
workers never reaches 3% before the next recession hits. Wage growth rates always decline in recessions,
usually by over 2%.
If in the next recession, we see actual slight nominal wage decreases, is a debt-deflationary
wage-price spiral inevitable? Or could there be a small decline of less than -1% without triggering
such a spiral.
"is a debt-deflationary wage-price spiral inevitable?"
Good question. It all depends on the response of policy makers. If we continue with the stupid
fiscal austerity that began in 2011, it may be inevitable. Which is why doing public infrastructure
investment is a very good idea.
And consider how dysfunction from laissez faire healthcare policy readoption leads to rising
prices/costs above current trend to limit disposable income even more, it will be amazing if we
do not have stagnation and worse for the bulk of society.
Bush implemented and expanded a community health clinic system, that reallnwoukd be a nice
infrastructure play for the US, but this Congress is more likely to disinvest here. They certainly
don't want these do-gooder nonprofits competing against the doctor establishment.
For Clinton dems, the ones the wiki revealed are con artists, doing for the peeps [like Bernie
stood for] is too far ideologically for the faux centrists.
They are neoliberals market monetarists who keep the bankers green and everyone else takes
the back seats.
At this point in time pretty much anything the policy makers do will be countered by the Fed.
The question is first of all whether Trump can bully the Fed away from their current and traditional
course (which would not allow much of a stimulus, before they cancelled it out with rate hikes).
Second whether the Fed itself having been traditionally prone to support GOP presidents
(see inconsistencies in Greenspan's policies during Clinton vs. Bush) will change its policies
and allow higher inflation and wage growth than they have under any Dem president.
As long as the FED thinks the natural rate of the employment to population ratio is only 60% -
you'd be right. But then the FED is not thinking clearly.
like many of my fellow socialists, i fulminated about bernanke's coddling of banks and asset holders.
i was somewhat wrong. bernanke was a evidently a strong voice for banking regulation and an end
to the moral hazard of TBTF. it is a pity that obama did not listen to him.
The little people go to the credit channels to help finance the purchase of durables and higher
education too. The Fed's actions themselves will see these credit prices ratchet, so nit good
fir basic demand. Veblen goods will see more price rises as the buyers will have lots of rentier/lobbying
gathered money to burn.
Will the Fed use rulemaking to control bubbling in the financial asset marketplaces as they
wont want to rause rates too much. I hope they are paying attention
"... I always laugh when Newt Gingrich says we need "rational regulation". His crew has as its prime agenda getting rid of any regulation that is actually rational. ..."
"... the greater the information asymmetry, the easier it is to loot. ..."
"... Gramm pushed the next round of stupid deregulation which led to the latest crisis. And it seems Team Trump is about to relive the same mistake. Studying overly simplified models that have historically failed us over and over is the height of stupidity. ..."
Jeb Hensarling and the Allure of Economism : The
Wall Street Journal has a profile up on Mike Crapo and Jeb Hensarling, the key committee
chairs (likely in Crapo's case) who will repeal or rewrite the Dodd-Frank Wall Street Reform and
Consumer Protection Act. It's clear that both are planning to roll back or dilute many of the
provisions of Dodd-Frank, particularly those that protect consumers from toxic financial products
and those that impose restrictions on banks (which, together, make up most of the act).
Hensarling is about as clear a proponent of
economism -the belief that the world operates exactly as described in Economics 101 models-as
you're likely to find. He majored in economics at Texas A&M, where one of his professors was none
other than Phil Gramm. Hensarling described his college exposure to economics
this way :
"Even though I had grown up as a Republican, I didn't know why I was a Republican until
I studied economics. I suddenly saw how free-market economics provided the maximum good to
the maximum number, and I became convinced that if I had an opportunity, I'd like to serve
in public office and further the cause of the free market."
This is not a unique story...
Introductory economics, and particularly the competitive market model, can be seductive that
way. The models are so simple, logical, and compelling that they seem to unlock a whole new way
of seeing the world. And, arguably, they do: there are real insights you can gain from a working
understanding of supply and demand curves.
The problem, however, is that the people ... forget that the power of a theory in the abstract
bears no relationship to its accuracy in practice. ...
Hensarling, who likes to quote market principles in the abstract, doesn't appear to have moved
on much from Economics 101. ... This ritual invocation of markets ignores the fact that there
is no way to design a contemporary financial system that even remotely resembles the textbook
competitive market: perfect information, no barriers to entry, a large number of suppliers such
that no supplier can affect the market price, etc. ...
Regulatory policy that presumes well-functioning markets that don't exist is unlikely to work
well in the real world. Actually, Bill Clinton and George W. Bush tried that already, and we got
the financial crisis. But to people who believe in economism, theory can never be disproved by
experience. Hensarling is "always willing to compromise policies to advance principles," he actually
said to the Journal . That's a useful trait in an ideologue. It's frightening in the man
who will write the rules for our financial system.
I always laugh when Newt Gingrich says we need "rational regulation". His crew has as its prime
agenda getting rid of any regulation that is actually rational.
That is required to cover all the common law complexities from civil suits on labor issues being
legislated from the Federal bench.
Businesses have resorted to getting judges to legislate their way once their lobbying failed
to get Congress to legalize slavery by other names.
Labor is a part of econ 101 that businesses do not understand.
Businesses see labor as black holes sucking all the money it can out of the economy. Consumers,
on the other hand, are infinite sources of spending as long as government does not require consumers
repay debts. But government does need to put more money in consumer pockets with more and bigger
tax cuts.
When I learned econ 1 in secondary school social studies, the money spent at businesses came
100% from wages businesses paid.
A more advanced concept was economic profits were bad because that meant monopoly power restricting
supply to consumers to take too much of their money and also pay them less than in an efficient
economy.
"Hensarling is about as clear a proponent of economism -- the belief that the world operates exactly
as described in Economics 101 models-as you're likely to find. He majored in economics at Texas
A&M, where one of his professors was none other than Phil Gramm."
Gramm never really got the economics of financial institutions. Milton Friedman did as he studies
their failures during the Great Depression. We sort of relived this during the 1980's S&L crisis
but on a smaller scale. That crisis was driven by ill advised financial deregulation.
Gramm pushed
the next round of stupid deregulation which led to the latest crisis. And it seems Team Trump
is about to relive the same mistake. Studying overly simplified models that have historically
failed us over and over is the height of stupidity.
"The GrammLeachBliley Act (GLBA), also known as the Financial Services Modernization Act of
1999, (Pub.L. 106102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United
States Congress (19992001). It repealed part of the GlassSteagall Act of 1933, removing barriers
in the market among banking companies, securities companies and insurance companies that prohibited
any one institution from acting as any combination of an investment bank, a commercial bank, and
an insurance company. With the bipartisan passage of the GrammLeachBliley Act, commercial banks,
investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore,
it failed to give to the SEC or any other financial regulatory agency the authority to regulate
large investment bank holding companies.[1] The legislation was signed into law by President Bill
Clinton.[2]"
a good read but i disagree with their suggested approach:
"Consideration needs to be given to approaches such as those suggested by Bulow and Klemperer
(2015) and
King (2016) that give more weight to market prices as indicators of asset values and that bring
automaticity to the restoration of bank capital when it starts to decline."
imo, small enough to fail institutions pose less system risk and are less likely to speculate.
I suspect over time we will disagree slightly here and there on specifics but it is a joy to have
someone here that gets down to real analysis.
In my view Sarin-Summers took too tiny a step into something fundamental but often overlooked.
The return to equity is a mix of the equity/asset ratio (which needs to go up) aka leverage risk
and the issue of operational risk which you are hinting at.
I bet Anne will demand more on what I'm saying here. Tiem to think about how best to present
this over at Econospeak as this is a really big deal. Even if it is something Trump's new CEA
(Lawrence Kudlow) does not get. Neither does PeterK so maybe he can work for Kudlow - the stupidest
man alive (almost).
Small enough to fail institutions like ... Bear and Lehman?
Theory aside, in the real life crisis we had risk built up across the entire system, not just
big banks, and when a few midsized firms went under it broke the buck and everything went to hell.
Perhaps more importantly though, it was *consumers'* overleveraging that caused the prolonged
depression. The big banks participated in that but didn't have central roles.
"Milton Friedman did as he studies their failures during the Great Depression."
So, how is it that he promised money market funds would ever be at risk of insolvency and need
Fed bailout of credit, and that money market funds would never face bank runs because no one would
ever question their safety and solvency?
How is it that he failed to predict Primary Reserve breaking the buck and triggering bank runs
on the shadow banks?
I remember the debate over Regulation Q and retail money market funds. I agreed with the big
government liberals that it was going to end badly. That it took 37 years is not a surprise to
me, but October 2008 was no surprise at all to me. It was forecast by my kind of economists in
1970 based on what happened multiple times before 1935 when sane bankers and economists developed
the bank regulation that produced half a century of no bank crisis.
Friedman, on the other hand, argued for deregulation that delivered bank crisis in the late
80s, the 90s multiple times deftly handled by bailouts by both government and by forcing Wall
Street banks to do Morgan bailouts, eg LTCM, and the IMF, and then yet again, the bank crisis
of the 00s.
Three decades of bank crisis in four decades is hardly evidence Friedman understood banking.
For Free Market Ideologues the Great Depression Never Happened
Simple question for Jeb H: Why was there a Great Depression when we had budget surpluses every
year during the 1920s?
How could the Free Market have failed so completely from 1929 to 1933? We had gold money and
regulations were minimal. It was the ideal context for the Free Market and yet the Dow lost 90%
of its value. Why has the Dow nearly tripled in value now with Dodd-Frank in force?
I'm with yuan on this one. But this is a long story. For today - let me applaud you and yuan for
bringing something new and needed here. Debates over actual economic analysis.
We got a lot more than the financial crisis from r lying on markets more than government. Yes,
regs are necessary (externalities, monopolies, etc) but "the more the merrrier" is not the underlying
principle. Read that D/F has > 20k "rules" with >300 "major" rules yet to be written after 6 years
of work. The world changes way faster than government can. Regulators need to find much simpler,
more general approaches ("less leverage") if they're going to continue to add value.
This is a problem of the teaching of contemporary economics, not of Jed Hensarling. Economists
tout simplified classical models as fundamentally correct, teach them in freshman Economics 101,
and only admit that they don't approximate reality in Econ 401, for seniors. But most students
never take another econ course after 101. The damage is done. Not surprisingly, most young Republicans
discover that economic reality is...Free Market and Republican!
Think maybe it's time to show them that the classical model doesn't really work when they are
freshmen, and not complain after they're already in Congress.
Agency's '04 Rule Let Banks Pile Up New Debt
It was unanimous. The decision, changing what was known as the net capital rule, was completed
and published in The Federal Register a few months later.
With that, the five big independent investment firms were unleashed.
In loosening the capital rules, which are supposed to provide a buffer in turbulent times,
the agency also decided to rely on the firms' own computer models for determining the riskiness
of investments, essentially outsourcing the job of monitoring risk to the banks themselves.
At Bear Stearns, the leverage ratio - a measurement of how much the firm was borrowing compared
to its total assets - rose sharply, to 33 to 1.
Ah, Texas the home of fundamentalism. Texas basically lives by sticking a big straw in the ground
and selling what comes out. That is great until it (as it will) stops working. Texas is a caricature
of all that is wrong with mankind.
Another way to look at Texas is as the Saudi Arabia of North America. All that is missing is a
King. The rest of the USA should get together and give it back to Mexico. Both countries would
be better off.
"... Democracy is inevitably going to clash with the demands of Globalization as they are opposite. Globalization requires entrepreneurs to search cheaper means of production worldwide. ..."
"... In practice, this means moving capital out of the USA. ..."
"... To put it in Marxist terms the interests of American society to survive and prosper came into contradiction with the interests of capitalism as a system of production and with the capitalists as a class who has no homeland, and for whom homeland is where it is easier to make money. ..."
"... American capitalism from its very beginning was based on the assumption that what was good for business was good for America. Until 1929 it more or less worked. The robber barons were robbing other entrepreneurs and workers but at least they reinvested their ill gained profits in America. The crash of 1929 showed that the interests of Big Banks clashed with the interest of American society with devastating results. ..."
"... The decades after WWII have seen a slow and steady erosion of American superiority in technology and productivity and slow and steady flight of capital from the USA. Globalization has been undermining America. From the point of view of Global prosperity if it is cheaper to produce in China, production should relocate to China. From the point of view of American worker, this is treason, a policy destroying the United States as an industrial power, as a nation, and as a community of citizens. Donald Trump is the first top ranking politician who has realized this simple fact. The vote for Donald Trump has been a protest against Globalization, immigration, open borders, capital flight, multiculturalism, liberalism and all the values American Liberal establishment has been preaching for 60 years that are killing the USA. ..."
"... Donald Trump wants to arrest the assault of Globalization on America. He promised to reduce taxes, and to attract business back to the USA. However, reduced taxes are only one ingredient in incentives. For businesses to stay or come back to the US, companies must have educated labor force, steady supply of talented, well-educated young people, excellent schools, and safe neighborhoods, among other things. As of now most of these preconditions are missing. ..."
"... Dr. Brovkin is a historian, formerly a Harvard Professor of History. He has published several books and numerous articles on Russian History and Politics. Currently, Dr. Brovkin works and lives in Marrakech, Morocco. ..."
"... This is an interesting question: is it possible to contain neoliberal globalization by building walls, rejecting 'trade' agreement, and so on. I get the feeling that a direct attack may not work. Water will find a way, as they say. With a direct attack against globalization, what you're likely to face is major capital flight. ..."
In his election campaign Donald Trump has identified several key themes that defined American malaise.
He pointed to capital flight, bad trade deals, illegal immigration, and corruption of the government
and of the press. What is missing in Trump's diagnosis though is an explanation of this crisis. What
are the causes of American decline or as Ross Pero used to say: Let's look under the hood.
Most of the challenges America faces today have to do with two processes we call Globalization
and Sovietization. By Globalization we mean a process of externalizing American business thanks to
the doctrine of Free trade which has been up to now the Gospel of the establishment. By Sovietization
we mean a process of slow expansion of the role of the government in economy, education, business,
military, press, virtually any and every aspect of politics and society.
Let us start with Globalization.
Dani Rodrick (
The Globalization Paradox: Democracy and the Future of the World Economy) has argued that
it is impossible to have democracy and globalization at the same time. Democracy is inevitably
going to clash with the demands of Globalization as they are opposite. Globalization requires entrepreneurs
to search cheaper means of production worldwide.
In practice, this means moving capital out of the USA. For fifty years economists have
been preaching Free trade, meaning that free unimpeded, no tariffs trade is good for America. And
it was in the 1950s, 60s and 1970s that American products were cheaper or better than those overseas.
Beginning with the 1970s, the process reversed. Globalization enriched the capitalists and impoverished
the rest of Americans. To put it in Marxist terms the interests of American society to survive
and prosper came into contradiction with the interests of capitalism as a system of production and
with the capitalists as a class who has no homeland, and for whom homeland is where it is easier
to make money.
American capitalism from its very beginning was based on the assumption that what was good
for business was good for America. Until 1929 it more or less worked. The robber barons were robbing
other entrepreneurs and workers but at least they reinvested their ill gained profits in America.
The crash of 1929 showed that the interests of Big Banks clashed with the interest of American society
with devastating results.
The decades after WWII have seen a slow and steady erosion of American superiority in technology
and productivity and slow and steady flight of capital from the USA. Globalization has been undermining
America. From the point of view of Global prosperity if it is cheaper to produce in China, production
should relocate to China. From the point of view of American worker, this is treason, a policy destroying
the United States as an industrial power, as a nation, and as a community of citizens. Donald Trump
is the first top ranking politician who has realized this simple fact. The vote for Donald Trump
has been a protest against Globalization, immigration, open borders, capital flight, multiculturalism,
liberalism and all the values American Liberal establishment has been preaching for 60 years that
are killing the USA.
Donald Trump wants to arrest the assault of Globalization on America. He promised to reduce
taxes, and to attract business back to the USA. However, reduced taxes are only one ingredient in
incentives. For businesses to stay or come back to the US, companies must have educated labor force,
steady supply of talented, well-educated young people, excellent schools, and safe neighborhoods,
among other things. As of now most of these preconditions are missing.
To fight Globalization Donald Trump announced in his agenda to drop or renegotiate NAFTA and TPP.
That is a step in the right direction. However, this will not be easy. There are powerful vested
interests in making money overseas that will put up great resistance to America first policy. They
have powerful lobbies and votes in the Congress and it is by far not certain if Trump will succeed
in overcoming their opposition.
Another step along these lines of fighting Globalization is the proposed building of the Wall
on Mexican border. That too may or may not work. Powerful agricultural interests in California have
a vested interest in easy and cheap labor force made up of illegal migrants. If their supply is cut
off they are going to hike up the prices on agricultural goods that may lead to inflation or higher
consumer prices for the American workers.
... ... ...
The Military: Americans are told they have a best military in the world. In fact, it is not the
best but the most expensive one in the world. According to the National priorities Project, in fiscal
2015 the military spending amounted to 54% of the discretionary spending in the
amount of 598.5 billion dollars . Of those almost 200 billion dollars goes for operations and
maintenance, 135 billion for military personnel and 90 billion for procurement (see
Here is How the US Military Spends its Billions )
American military industrial complex spends more that the next seven runners up combined. It is
a Sovietized, bureaucratic structure that exists and thrives on internal deals behind closed doors,
procurement process closed to public scrutiny, wasted funds on consultants, kickbacks, and outrageous
prices for military hardware. Specific investigations of fraud do not surface too often. Yet for
example, DoD Inspector General reported:
Why is it that an F35 fighter jet should cost 135 million apiece and the Russian SU 35 that can
do similar things is sold for 35 million dollars and produced for 15 million? The answer is that
the Congress operates on a principle that any price the military asks is good enough. The entire
system of military procurement has to be scrapped. It is a source of billions of stolen and wasted
dollars. The Pentagon budget of half a trillion a year is a drain on the economy that is unsustainable,
and what you get is not worth the money. The military industrial complex in America does not deliver
the best equipment or security it is supposed to.(on this see:
http://nationalinterest.org/blog/the-skeptics/cutting-waste-isnt-enough-curb-pentagon-spending-18640
)
Donald Trump was the first to his credit who raised the issue: Do we need all these bases overseas?
Do they really enhance American security? Or are they a waste of money for the benefit of other countries
who take America for a free ride. Why indeed should the US pay for the defense of Japan? Is Japan
a poor country that cannot afford to defend itself? Defense commitments like those expose America
to unnecessary confrontations and risk of war over issues that have nothing to do with America's
interests. Is it worth it to fight China over some uninhabitable islands that Japan claims? (See
discussion:
http://nationalinterest.org/blog/the-skeptics/should-the-us-continue-guarantee-the-security-wealthy-states-17720
)
Similarly, Trump is the first one to raise the question: What is the purpose of NATO? ( see discussion
of NATO utility:
http://nationalinterest.org/blog/the-buzz/will-president-trump-renegotiate-the-nato-treaty-18647
) Yes the Liberal pro-Clinton media answer is: to defend Europe from Russian aggression. But
really what aggression? If the Russians wanted to they could have taken Kiev in a day two years ago.
Instead, they put up with the most virulently hostile regime in Kiev. Let us ask ourselves would
we have put up with a virulently anti-American regime in Mexico, a regime that would have announced
its intention to conclude a military alliance with China or Russia? Were we not ready to go to nuclear
war over Soviet missiles in Cuba? If we would not have accepted such a regime in Mexico, why do we
complain that the Russians took action against the new regime in Ukraine. Oh yes, they took Crimea.
But the population there is Russian, and until 1954 it was Russian territory and after Ukrainian
independence the Russians did not raise the issue of Crimea as Ukrainian territory and paid rent
for their naval base there The Russians took it over only when a hostile regime clamoring for NATO
membership settled in Kiev. Does that constitute Russian aggression or actually Russian limited response
to a hostile act? (see on this Steven Cohen:
http://eastwestaccord.com/podcast-stephen-f-cohen-talks-russia-israel-middle-east-diplomacy-steele-unger/
) As I have argued elsewhere Putin has been under tremendous pressure to act more decisively
against the neo-Nazis in Kiev. (see Vlad Brovkin: On Russian Assertiveness in Foreign Policy. (
http://eastwestaccord.com/?s=brovkin&submit=Search
)
With a little bit of patience and good will a compromise is possible on Ukraine through Minsk
accords. Moreover, Ukraine is not in NATO and as long as it is not admitted to NATO, a deal with
the Russians on Ukraine is feasible. Just like so many other pro-American governments, Ukraine wants
to milk Uncle Sam for what it is worth. They expect to be paid for being anti/Russian. (See discussion
on need of enemy:
http://nationalinterest.org/feature/does-america-need-enemy-18106
) Would it not be a better policy to let Ukraine know that they are on their own: no more subsidies,
no more payments? Mend your relations with Russia yourselves. Then peace would immediately prevail.
If we admit that there is no Russian aggression and that this myth was propagated by the Neo/Cons
with the specific purpose to return to the paradigm of the cold war, i.e. more money for the military
industrial complex, if we start thinking boldly as Trump has begun, we should say to the Europeans:
go ahead, build your own European army to allay your fears of the Russians. Europe is strong enough,
rich enough and united enough to take care of its defense without American assistance. (See discussion
of Trumps agenda:
http://nationalinterest.org/feature/course-correction-18062
)
So, if Trump restructures procurement mess, reduces the number of military bases overseas, and
invests in high tech research and development for the military on the basis of real competition,
hundreds of billions of dollars could be saved and the defense capability of the country would increase.
... ... ...
Dr. Brovkin is a historian, formerly a Harvard Professor of History. He has published several
books and numerous articles on Russian History and Politics. Currently, Dr. Brovkin works and lives
in Marrakech, Morocco.
This is a bit too much, Volodya. Maybe you should've taken one subject globalization, for
example and stop there.
This is an interesting question: is it possible to contain neoliberal globalization by
building walls, rejecting 'trade' agreement, and so on. I get the feeling that a direct attack
may not work. Water will find a way, as they say. With a direct attack against globalization,
what you're likely to face is major capital flight.
You might be able to make neoliberal globalization work for you (for your population, that
is), like Germany and the Scandinavians do, but that's a struggle, constant struggle. And it's
a competition; it will have to be done at the expense of other nations (see Greece, Portugal,
Central (eastern) Europe). And having an anti-neoliberal president is not enough; this would require
a major change, almost a U turn, in the whole governing philosophy. Forget the sanctity of 'free
market', start worshiping the new god: national interest
What an INTERESTING article -- So much that is right, so much that is wrong. An article you
can get your teeth into.
On globalisation: pretty spot-on (although I believe he exaggerates the US weakness in what he
calls "preconditions": there are still many well educated Americans, still good neighborhoods
(yes, sure it could be a lot better). He's against NAFTA & other neoliberal Trade self indulgences.
But then we come to his concept of "Sovietization" of the US. Perhaps it's mere semantics, but
I find the concept incoherent & suspiciously adapted to deliberately agitate US conservatives.
Example: "huge sectors of American economy are not private at all, that in fact they have been
slowly taken over by an ever growing state ownership and control"
This is nonsense on its face: the government spews out trillions to private actors to provide
goods & services. It does so, in part, because it has systematically privatized every government
function capable of returning a profit. The author can't see the actor behind the mask: how much
legislation is now written by & for the benefit of private interests ? (Obama care, Bush pharmaceutical
laws ?)
Of course, the author is correct on the US military-industrial complex: it is a sump of crime
& corruption. Yet he seems not to grasp that the problem is regulative capture. How is the Fiasco
of the F35 & MacDonald Douglas merely an issue for the Legislature alone & how does this circus
resemble the Soviet Union, beyond the fact that BOTH systems (like most systems) are capable of
gross negligence & corruption ?
I like what the author says about NATO, Japan, bases etc. Although he's a little naive if he
thinks NATO for instance is about "protecting" Europe. Yes, that's a part of it: but primarily
NATO etc exist as a tool/mask behind which the US can exert it's imperial ambitions against friend
& for alike.
The author does go off against welfare well that's to be expected: sadly I don't think he quite
gets the connection between globalisation & welfare .He also legitimately goes after tertiary
education, but seems to be (again) confused as to cause & effect.
The author is completely spot on with his sovietization analogy when he comes to the US security
state. Only difference between the Soviets & the US on security totalitarianism ? The US is much
better at it (of course the US has technological advantages unimaginable to the Soviets)
Replies:
@Randal I agree with you that it's a fascinating piece, and I also agree with many of the points
you agree with.
But then we come to his concept of "Sovietization" of the US. Perhaps it's mere semantics, but
I find the concept incoherent & suspiciously adapted to deliberately agitate US conservatives.
Example: "huge sectors of American economy are not private at all, that in fact they
have been slowly taken over by an ever growing state ownership and control"
This is nonsense on its face: the government spews out trillions to private actors to provide
goods & services. It does so, in part, because it has systematically privatized every government
function capable of returning a profit. The author can't see the actor behind the mask: how much
legislation is now written by & for the benefit of private interests ? (Obama care, Bush pharmaceutical
laws ?)
I think part of the problem here might be a mistaken focus on "the government" as an independent
actor, when in reality it is just a mechanism whereby the rulers (whether they are a dictator,
a political party or an oligarchy or whatever), and those with sufficient clout to influence them,
get things done the way they want to see them done.
As such there is really not much difference between the government directly employing the people
who do things (state socialism), and the government paying money to companies to get the same
things done. Either way, those who use the government to get things done, get to say what gets
done and how. There are differences of nuance, in terms of organizational strengths and weaknesses,
degrees of corruption and of efficiency, but fundamentally it's all big government.
A more interesting question might be - how really different are these big government variants
from the small government systems, in which the rulers pay people directly to get things done
the way they want them to be done?
An excellent article. The points that resonated the most were:
For businesses to stay or come back to the US, companies must have educated labor force,
steady supply of talented, well-educated young people, excellent schools, and safe neighborhoods,
among other things. As of now most of these preconditions are missing.
This is an enormously difficult problem that will take years to resolve, and it will need a
rethink of education from the ground up + the political will to fight the heart of Cultural Bolshevism
and the inevitable 24/7 Media assault.
Drain the swamp in Washington: ban the lobbyists, make it a crime to lobby for private interest
in a public place, restructure procurement, introduce real competition, restore capitalism,
phase out any government subsidies to Universities, force them to compete for students, force
hospitals to compete for patients. Cut cut cut expenditure everywhere possible, including welfare.
Banning lobbyists should be possible but draining the rest of the swamp looks really complicated.
Each area would need to be examined from the ground up from a value for money efficiency viewpoint.
It doesn't matter which philosophy each one is run on good value healthcare is desirable whichever
system produces it.
Could we have ever imagined in our worst dreams that a system of mass surveillance would
be created and perfected in the USA. (see discussion on this in: Surveillance State, in
http://www.americamagazine.org/issue/surveillance-state
This one should be easy. The Constitution guarantees a right to privacy so just shut down the
NSA. Also shut down the vast CIA mafia (it didn't exist prior to 1947) and the expensive and useless
FED (controlling the money supply isn't the business of a group of private banks an office in
the Treasury could easily match the money supply to economic activity).
This one should be easy. The Constitution guarantees a right to privacy so just shut down the
NSA. Also shut down the vast CIA mafia (it didn't exist prior to 1947) and the expensive and useless
FED (controlling the money supply isn't the business of a group of private banks an office in
the Treasury could easily match the money supply to economic activity).
From Unz, I have learned that the US actually has a four-part government: the "Deep State"
part which has no clear oversight from any of the other three branches.
To put it in Marxist terms the interests of American society to survive and prosper came
into contradiction with the interests of capitalism as a system of production and with the
capitalists as a class who has no homeland, and for whom homeland is where it is easier to
make money.
Another add-on contradiction, comrade, is that the selfsame capitalist class expect their host
nation to defend their interests whenever threatened abroad. This entails using the resources
derived from the masses to enforce this protection including using the little people as cannon
fodder when deemed useful.
Donald Trump is the first top ranking politician who has realized this simple fact.
Come now, do you really believe that all these politicians who have gone to these world-class
schools don't know this? They simply don't care. They're working on behalf of the .1% who are
their benefactors and who will make them rich. They did not go into politics to take vows of poverty.
They just realize the need to placate the masses with speeches written by professional speechwriters,
that's all.
Insofar as Social Security/Medicare/Medicaid goes, those are the most democratic institutions
of all. It's money spent on ourselves, internally, with money being cycled in and out at the grassroots
level. Doctors, nurses, home-care providers, etc etc, all local people get a piece of the action
unlike military spending which siphons money upwards to the upper classes.
I'd rather be employed in a government job than unemployed in the private sector. That's not
the kind of "freedom" I'm searching for comrade.
@animalogic What an INTERESTING article -- So much that is right, so much that is wrong. An
article you can get your teeth into.
On globalisation: pretty spot-on (although I believe he exaggerates the US weakness in what
he calls "preconditions": there are still many well educated Americans, still good neighborhoods
(yes, sure it could be a lot better). He's against NAFTA & other neoliberal Trade self indulgences.
But then we come to his concept of "Sovietization" of the US. Perhaps it's mere semantics, but
I find the concept... incoherent...& suspiciously adapted to deliberately agitate US conservatives.
Example: "huge sectors of American economy are not private at all, that in fact they
have been slowly taken over by an ever growing state ownership and control"
This is nonsense on its face: the government spews out trillions to private actors to provide
goods & services. It does so, in part, because it has systematically privatized every government
function capable of returning a profit. The author can't see the actor behind the mask: how much
legislation is now written by & for the benefit of private interests ? (Obama care, Bush pharmaceutical
laws ?)
Of course, the author is correct on the US military-industrial complex: it is a sump of crime
& corruption. Yet he seems not to grasp that the problem is regulative capture. How is the Fiasco
of the F35 & MacDonald Douglas merely an issue for the Legislature alone...& how does this circus
resemble the Soviet Union, beyond the fact that BOTH systems (like most systems) are capable of
gross negligence & corruption ?
I like what the author says about NATO, Japan, bases etc. Although he's a little naive if he
thinks NATO for instance is about "protecting" Europe. Yes, that's a part of it: but primarily
NATO etc exist as a tool/mask behind which the US can exert it's imperial ambitions ...against
friend & for alike.
The author does go off against welfare...well that's to be expected: sadly I don't think he quite
gets the connection between globalisation & welfare....He also legitimately goes after tertiary
education, but seems to be (again) confused as to cause & effect.
The author is completely spot on with his sovietization analogy when he comes to the US security
state. Only difference between the Soviets & the US on security totalitarianism ? The US is much
better at it (of course the US has technological advantages unimaginable to the Soviets)
I agree with you that it's a fascinating piece, and I also agree with many of the points you
agree with.
But then we come to his concept of "Sovietization" of the US. Perhaps it's mere semantics,
but I find the concept incoherent & suspiciously adapted to deliberately agitate US conservatives.
Example: "huge sectors of American economy are not private at all, that in fact they have been
slowly taken over by an ever growing state ownership and control"
This is nonsense on its face: the government spews out trillions to private actors to provide
goods & services. It does so, in part, because it has systematically privatized every government
function capable of returning a profit. The author can't see the actor behind the mask: how
much legislation is now written by & for the benefit of private interests ? (Obama care, Bush
pharmaceutical laws ?)
I think part of the problem here might be a mistaken focus on "the government" as an independent
actor, when in reality it is just a mechanism whereby the rulers (whether they are a dictator,
a political party or an oligarchy or whatever), and those with sufficient clout to influence them,
get things done the way they want to see them done.
As such there is really not much difference between the government directly employing the people
who do things (state socialism), and the government paying money to companies to get the same
things done. Either way, those who use the government to get things done, get to say what gets
done and how. There are differences of nuance, in terms of organisational strengths and weaknesses,
degrees of corruption and of efficiency, but fundamentally it's all big government.
A more interesting question might be how really different are these big government variants
from the small government systems, in which the rulers pay people directly to get things done
the way they want them to be done?
The Shiller 10-year price-earnings ratio is currently 28.08, so the inverse or the earnings rate
is 3.56%. The dividend yield is 1.98%. So an expected yearly return over the coming 10 years would
be 3.56 + 1.98 or 5.54% provided the price-earnings ratio stays the same and before investment costs.
Against the 5.54% yearly expected return on stock over the coming 10 years, the current 10-year
Treasury bond yield is 2.56%.
"Jack Bogle tells you the secret to becoming a winning investor"
By Chuck Jaffe, Columnist...Dec 20, 2016...11:40 a.m. ET
..."On smart beta investing in general:
Bogle: Smart beta is stupid.
So not one of these new index products is intriguing?
Bogle: No, no, no, no, no. Academics can find anything with these masses of data they
have on their computers. They can find something that works in the past, it's as easy as rolling
off a log. But it almost never works in the future and not for very long - because they all
forget the most important single thing that happens in our markets reversion to the mean.
As the Good Book says, 'And the first shall be last and the last shall be first.'...
On what to expect from the market:
Bogle: The key to stock market investment returns is today's dividend yield [around 2%]
plus future earnings growth. Nobody knows what that earnings growth will be, but I am guessing
it will be maybe in the range of 4% to 5%. That seems like an informed reasonable expectation.
You compare that with history and we are looking at something very different. An average
dividend yield not of 2% but of maybe 4.5%, and earnings growth has averaged over 6% over the
last 50 years.
So we have lower earnings forecast and a much lower dividend yield built in. No one is going
to change that. It's like buying a bond, what is the interest rate when you buy in. So we're
talking about lower returns from investment side, from what corporations do.
The other side of total return on stocks is what we call speculative return, and that's
how bullish or bearish investors are, which is measured by the price/earnings multiple -- how
many times earnings your companies sell at or the total stock market sells at. Over the long-term
past, that number has been about 15 times earnings. Today, depending on who you are listening
to, it could be as high as 25 times earnings. ...I look backward at reported earnings after
all the bad stuff and I'm looking at a p/e of 25. So the market is at least fully valued and
I think it is reasonable to expect possibly negative returns but certainly no positive speculative
return.
So we're looking at future market returns, if we are lucky, of 4-5% before the costs of
investing are deducted."
Bad News for America's Workers
By JOSEPH E. STIGLITZ
NEW YORK As US President-elect Donald Trump fills his
cabinet, what have we learned about the likely direction
and impact of his administration's economic policy?
To be sure, enormous uncertainties remain. As in many
other areas, Trump's promises and statements on economic
policy have been inconsistent. While he routinely accuses
others of lying, many of his economic assertions and
promises indeed, his entire view of governance seem
worthy of Nazi Germany's "big lie" propagandists.
Trump will take charge of an economy on a strongly
upward trend, with third-quarter GDP growing at an
impressive annual rate of 3.2% and unemployment at 4.6% in
November. By contrast, when President Barack Obama took
over in 2009, he inherited from George W. Bush an economy
sinking into a deep recession. And, like Bush, Trump is
yet another Republican president who will assume office
despite losing the popular vote, only to pretend that he
has a mandate to undertake extremist policies.
The only way Trump will square his promises of higher
infrastructure and defense spending with large tax cuts
and deficit reduction is a heavy dose of what used to be
called voodoo economics. Decades of "cutting the fat" in
government has left little to cut: federal government
employment as a percentage of the population is lower
today than it was in the era of small government under
President Ronald Reagan some 30 years ago.
With so many former military officers serving in
Trump's cabinet or as advisers, even as Trump cozies up to
Russian President Vladimir Putin and anchors an informal
alliance of dictators and authoritarians around the world,
it is likely that the US will spend more money on weapons
that don't work to use against enemies that don't exist.
If Trump's health secretary succeeds in undoing the
careful balancing act that underlies Obamacare, either
costs will rise or services will deteriorate most likely
both.
During the campaign, Trump promised to get tough on
executives who outsource American jobs. He is now holding
up the news that the home heating and air conditioning
manufacturer Carrier will keep some 800 jobs in my home
state of Indiana as proof that his approach works. Yet the
deal will cost taxpayers $7 million, and still allow
Carrier to outsource 1,300 jobs to Mexico. This is not a
sound industrial or economic policy, and it will do
nothing to help raise wages or create good jobs across the
country. It is an open invitation for a shakedown of the
government by corporate executives seeking handouts.
Similarly, the increase in infrastructure spending is
likely to be accomplished through tax credits, which will
help hedge funds, but not America's balance sheet: such
programs' long track record shows that they deliver little
value for money. The cost to the public will be especially
high in an era when the government can borrow at near-zero
interest rates. If these private-public partnerships are
like those elsewhere, the government will assume the
risks, and the hedge funds will assume the profits.
The debate just eight years ago about "shovel-ready"
infrastructure seems to be a distant memory. If Trump
chooses shovel-ready projects, the long-term impact on
productivity will be minimal; if he chooses real
infrastructure, the short-term impact on economic growth
will be minimal. And back-loaded stimulus has its own
problems, unless it is managed extremely carefully.
If Trump's pick for US Treasury Secretary, the Goldman
Sachs and hedge-fund veteran Steven Mnuchin, is like
others from his industry, the expertise he will bring to
the job will be in tax avoidance, not constructing a
well-designed tax system. The "good" news is that tax
reform was inevitable, and was likely to be undertaken by
Speaker of the House Paul Ryan and his staff giving the
rich the less progressive, more capital-friendly tax
system that Republicans have long sought. With the
abolition of the estate tax, the Republicans would finally
realize their long-held ambition of creating a dynastic
plutocracy a far cry from the "equality of opportunity"
maxim the party once trumpeted....
What the US economy doesn't need from Donald Trump
The only way he can square higher infrastructure and
defence spending with tax cuts is voodoo economics
By Joseph Stiglitz - Guardian
As Donald Trump fills his cabinet, what have we learned
about the likely direction and impact of his
administration's economic policy?
To be sure, enormous uncertainties remain. As in many
other areas, Trump's promises and statements on economic
policy have been inconsistent. While he routinely accuses
others of lying, many of his economic assertions and
promises indeed, his entire view of governance seem
worthy of Nazi Germany's "big lie" propagandists.
Trump will take charge of an economy on a strongly
upward trend, with third-quarter GDP growing at an
impressive annual rate of 3.2% and unemployment at 4.6% in
November. By contrast, when Barack Obama took over in
2009, he inherited from George W Bush an economy sinking
into a deep recession. And, like Bush, Trump is yet
another Republican president who will assume office
despite losing the popular vote, only to pretend that he
has a mandate to undertake extremist policies.
The only way Trump will square his promises of higher
infrastructure and defence spending with large tax cuts
and deficit reduction is a heavy dose of what used to be
called voodoo economics. Decades of "cutting the fat" in
government has left little to cut: federal government
employment as a percentage of the population is lower
today than it was in the era of small government under
Ronald Reagan about 30 years ago.
With so many former military officers serving in
Trump's cabinet or as advisers, even as Trump cozies up to
the Russian president, Vladimir Putin, and anchors an
informal alliance of dictators and authoritarians around
the world, it is likely that the US will spend more money
on weapons that don't work to use against enemies that
don't exist. If Trump's health secretary succeeds in
undoing the careful balancing act that underlies
Obamacare, either costs will rise or services will
deteriorate most likely both.
During the campaign, Trump promised to get tough on
executives who outsource American jobs. He is now holding
up the news that the home heating and air-conditioning
manufacturer Carrier will keep around 800 jobs in my home
state of Indiana as proof that his approach works. Yet the
deal will cost taxpayers $7m, and still allow Carrier to
outsource 1,300 jobs to Mexico. This is not a sound
industrial or economic policy, and it will do nothing to
help raise wages or create good jobs across the country.
It is an open invitation for a shakedown of the government
by corporate executives seeking handouts.
Similarly, the increase in infrastructure spending is
likely to be accomplished through tax credits, which will
help hedge funds, but not America's balance sheet: such
programmes' long track record shows that they deliver
little value for money. The cost to the public will be
especially high in an era when the government can borrow
at near-zero interest rates. If these private-public
partnerships are like those elsewhere, the government will
assume the risks, and the hedge funds will assume the
profits....
As soon as he awakes, Brian Porrell checks his e-mail,
sometimes firing off a message before he gets out of bed.
He makes calls during his commute to the Waltham staffing
firm WinterWyman, spends 10 to 12 hours at the office and
out visiting clients, and keeps his phone by his side at
night, checking work e-mails while he watches sports on
TV.
Like many workers today, Porrell, 30, is on the job
wherever he is - and he doesn't count out-of-office
exchanges in his 50-plus hour week.
The millennial generation, the first to grow up with
smartphones in their hands, is often stereotyped as lazy
and entitled. But workplace experts say workaholics are
common among 19-to-35-year-olds, perhaps more so than
among older members of Generation X and baby boomers.
In one online study, more than 4 in 10 millennials
consider themselves "work martyrs" - dedicated,
indispensable, and racked with guilt if they take time
off.
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What's more, nearly half of millennials want to be seen
that way, according to the survey of 5,600 workers by
Project: Time Off, a Washington, D.C., coalition that
promotes vacation time.
So why are millennials bent on being workaholics? Even
though the economy has improved markedly in recent years,
young people in the workforce today have record levels of
student loan debt. They are also less likely than previous
generations to earn more than their parents, according to
a Stanford University report. The percentage of children
who are better off than their parents has dropped
dramatically - 50 percent of those born in the 1980s have
a higher standard of living than their parents, compared
with 90 percent of those born in the 1940s.
(December 8, 2016 - Today's children face tough
prospects of being better off than their parents,
Stanford researchers find
http://stanford.io/2ghwtmj
via @Stanford)
The way millennials were raised may play into their
always-on mindset, too, said Bob Kelleher, a Boston-based
employee engagement consultant and author. Many of them
were highly scheduled, he said, going to soccer camps,
enrolling in SAT prep courses, and competing on the debate
team in order to get into a good college.
And some have delayed several of the responsibilities of
adulthood, he noted, living with their parents and putting
off marriage and kids. That frees them up to work even
more.
"This is a driven generation," he said.
Jane Alexander, 26, a staffing manager at WinterWyman,
said she is often one of the first to arrive and the last
to leave the office but acknowledged she will probably
work less when she has kids. "That is part of why I want
to crank it now while I do have time," she said.
The concept of 24/7 work has become so prevalent that
workplace analysts are starting to talk about "work-life
blending" instead of "work-life balance."
The ability to work anytime, anywhere, helps propel
this blending of work and life, in part because answering
a work text at a coffee shop doesn't feel as much like
work as sitting in a cubicle. Indeed, nearly one in five
people said they don't consider after-hours texts from
clients or customers to be work, according to Workforce
Institute at Kronos Inc., a think tank set up by the
Chelmsford human resources software provider.
"If a friend texted me at the gym I would answer their
text. Answering a work e-mail is just a natural extension
of that," said Jessica Molson, a 24-year-old integration
manager at Beacon Communities, the Boston real estate
developer and property management firm. "I don't think of
it as working; it's just communicating."
Molson finds herself answering e-mails and jumping on
conference calls even when she's on vacation, once
distracting other participants with the sound of seagulls
in the background while she was in Florida with her
family. But going on a real vacation is a rarity for
Molson, who tends to take long weekends because she's
afraid of missing something at work - and also because she
loves what she does.
Like many millennials, Molson came of age when the
economy was reeling, and the uncertain job market had a
profound effect on her.
"I'm very anxious to rack up as much experience as
possible," she said.
Millennials are also more likely to forfeit paid days
off than older generations of workers, with a quarter of
18-to-25-year-olds reporting they weren't using any of
their paid vacation days this year, according to the
personal finance website Bankrate.com. The rise of
companies offering unlimited vacation time may contribute
to that, workplace consultants say, noting that when there
is no set bank of "use it or lose it" vacation time,
people are less likely to take days off than they
otherwise would be.
But not being able to truly get away from work can have
serious downsides. Employees who don't disconnect
experience more stress and anxiety, which leads to reduced
productivity and a higher rate of burnout, said Dan
Schawbel, research director at Future Workplace, an
executive development firm in New York.
"If all you're doing is trying to be the perfect
employee, it's actually not going to work out in your
favor because it's going to make you less happy," said
Schawbel, who describes working too much as "a weakness
disguised as a strength."
Seeing co-workers hunched over their desks late at
night can cause others to feel they should be doing the
same and increase guilt, or resentment, among employees
who strive to keep their work and home lives separate.
It can also lead people working around the clock to
hold it against their employer - "even if it's your own
fault," Schawbel noted. Indeed, people who see being a
"work martyr" as a good thing are more likely to be
unhappy with their jobs, and less likely to receive
bonuses, according to the Project: Time Off study.
That can lead to retention problems, particularly among
millennials, who aren't afraid to quit. Two out of three
young workers expect to leave their current job by 2020,
according to a recent study by Deloitte.
Still, workaholics aren't necessarily unhappy - many
are ambitious or simply enjoy their work. At Beacon
Communities, several employees work 60 to 70 hours a week
no matter what adjustments supervisors make. Adding more
people to an overachiever's team doesn't help, said chief
administrative officer Darlene Perrone: "They just find
another project." ...
I have enormous problems with generationism. Anything that
starts with {generation} is/are(n't) I know what is coming
is mostly nonsense. It is exactly the same as if you
replaced {generation} with {race} {gender} {nationality}
it is sure to be wrong for a significant (perhaps even a
majority) of the addressed category.
There does seem to be a fruitful direction to take in
"generational" analysis, though.
It may be that the mechanism by which increasing
inequality works is by reducing the prospects of new young
workers while generally maintaining the income of older
ones. Thus by age cohort, lifetime incomes follow a lower
and lower track as the young age compared to older
workers.
If that is what is happening, and someone with
sufficiently fine data may be able to show it, then it
would be trivial to forecast future inequality by
re-composing forecasts of lifetime income profiles for the
various cohorts and the inflow of new young cohorts.
The possibility is that there is a much more severe
inequality on the way that is embedded in the current age
cohorts, if we could display them.
I agree with this. I don't believe all the bullshit
categories come up with like Generation X, Millenials etc.
However, the ruling classes like to use age divisions to
divide and conquer so we will keep on hearing about how
unengaged, bored, lazy, vapid, greedy and irresponsible
young people are. And we have heard it going back at least
to Plato and Socrates!
Today's children face tough prospects
of being better off than their parents
http://stanford.io/2ghwtmj
via @Stanford - Dec 8
Parents often expect that their
kids will have a good shot at making more money than they
ever did.
But young people entering the workforce today are far
less likely to earn more than their parents when compared
to children born two generations before them, according to
a new study by Stanford researchers.
In a new study, Stanford economist Raj Chetty found
that the link between income and life expectancy varies
from one area to another within the United States.
The findings show that the fraction of kids earning
more than their parents has fallen dramatically from 90
percent for kids born in the 1940s to 50 percent for kids
born in the 1980s.
"It's basically a coin flip as to whether you'll do
better than your parents," said economics Professor Raj
Chetty, a senior fellow at the Stanford Institute for
Economic Policy Research and one of the study's authors.
One of the most comprehensive studies of
intergenerational income mobility to date, the study used
a combination of Census data and anonymized Internal
Revenue Service records to measure the rate of "absolute
income mobility" or the percentage of children who
earned more than their parents for people born between
1940 and 1984.
What emerged from the empirical analysis was an
economic portrait of the fading American Dream, and
growing inequality appeared to be the main cause for the
steady decline.
"One of the defining features of the American Dream is
the ideal that children have a higher standard of living
than their parents," Chetty said. "We assessed whether the
U.S. is living up to this ideal, and found a steep decline
in absolute mobility that likely has a lot to do with the
anxiety and frustration many people are feeling, as
reflected in the election." ...
The paper was co-authored by David Grusky, a SIEPR
senior fellow, sociology professor and director of the
Stanford Center on Poverty and Inequality; Maximilian
Hell, a sociology doctoral student at Stanford; Professor
Nathaniel Hendren and doctoral student Robert Manduca,
both of Harvard; and Jimmy Narang, a former SIEPR
predoctoral fellow who is currently a doctoral student at
the University of California, Berkeley.
The study and more information about the team's
research can be found on The Equality of Opportunity
Project website run by Chetty and Hendren.
One of the basic themes
of Donald J. Trump's election campaign was that the United
States was being ripped off by foreign countries and that
his administration would reduce our trade deficit.
Yet the budget policies he is now proposing would be
sharply at odds with that goal. By advocating an expansive
budget through tax cuts and infrastructure spending, Mr.
Trump's plan would most likely lower national savings and
propel the United States dollar ever higher, creating the
very conditions to widen rather than to narrow the trade
deficit.
Mr. Trump seems to be overlooking a matter of basic
arithmetic. While a country's trade balance is the
difference between a country's exports and imports, it is
also the difference between the amount it saves and
invests, as can be derived from rearranging the components
of a country's aggregate demand equation. If a country
saves more than it invests, it will run a trade surplus.
Conversely, a country that saves less than it invests will
run a trade deficit.
Seemingly oblivious to this basic math, Mr. Trump is
proposing far-reaching and seemingly unfunded cuts in both
corporate and household tax rates. Worse yet, he is
simultaneously proposing large increases in both public
infrastructure and military spending.
He is doing so in the unrealistic hope that these
policies will cause the economy to accelerate from its
present 2 percent growth rate to between 3 and 4 percent.
And he is counting on such faster economic growth to
generate additional tax revenue.
Should a significant pickup in economic growth not
materialize, the net effect of these tax cuts and public
spending policies will almost certainly lead to a
significant widening of the budget deficit and to a
corresponding decline in public savings. That, in turn,
would in all probability lead to a significant widening of
the trade deficit as the country's overall savings rate
would decline.
A further basic weakness of Mr. Trump's budget proposal
is that it would add stimulus to the economy at the very
time that the economy is at or very close to full
employment. That policy is bound to raise concerns about
inflation and to push the Federal Reserve to raise
interest rates more than it is currently contemplating in
order to meet its inflation target.
One of the distinguishing characteristics of the global
economy right now is the divergence of monetary policy
stances among the world's major central banks. The United
States Federal Reserve is now embarked on a path of
raising interest rates at a time when the European Central
Bank and the Bank of Japan are still engaged in aggressive
rounds of quantitative easing in an effort to kick-start
their moribund economies.
Forcing the Federal Reserve to raise interest rates at
a faster pace than it is presently contemplating will only
serve to widen the difference between it and the other
major central banks. This would more than likely put
further upward pressure on the dollar.
Since the November election, the United States dollar
has already appreciated significantly, to its strongest
level in the past 14 years. The last thing that the
country needs if it is to reduce its trade deficit is a
further dollar appreciation. Such an appreciation would
make our exports across the board more expensive in
foreign markets and make our imports cheaper in United
States dollar terms. That would hardly seem to be the way
to reduce the country's trade deficit. ...
Much of President-elect Donald J. Trump's pledge to
be a job creator rests on his call for a $1 trillion in
infrastructure spending over 10 years. While few question
the need for such investment, many have questioned how he
would finance it and what it would fund. Can Trump's plan
effectively repair the nation's infrastructure?
"A further basic weakness of Mr. Trump's budget proposal
is that it would add stimulus to the economy at the very
time that the economy is at or very close to full
employment. That policy is bound to raise concerns about
inflation and to push the Federal Reserve to raise
interest rates more than it is currently contemplating in
order to meet its inflation target."
Centrist fail.
Krugman might be right that Trump's policies don't add
much actual stimulus.
(He's better on economics than on politics.)
And so Obama's Fed might actually raise rates too
quickly.
Combined with a strong dollar and weakening exports
this could bring on a recession.
(EMichael is horrified at the fact that Obama's Fed
might be considered anti-worker.)
Mohammed El-Erian talks about the international aspect
in today's links.
He says the same thing as Krugman and pgl (except adds
the Republican BS about tax cuts and deregulation being
pro-growth.)
"Mr. Trump seems to be overlooking a matter of basic
arithmetic. While a country's trade balance is the
difference between a country's exports and imports, it is
also the difference between the amount it saves and
invests,"
Exactly, his understanding of economics is at
the 5'th grade level. Furthermore, just as he thinks he
known "more than the generals", he also thinks he knows
more than the economists. We have elected a narcissistic
moron like Turkey's Ergodan and the Philippine's Duterte.
We will se the same erratic and destructive policies they
have seen, because he is equally incapable of leading a
nation. The hope is that our institutions checks and
balances will prevent us from slipping into the same type
of semi-democracy.
"If a country
saves more than it invests, it will run a trade surplus.
Conversely, a country that saves less than it invests will
run a trade deficit."
But:
GDP (Gross Domestic Product) is the value of all goods
and services sold within a country during one year. GDP
measures flows rather than stocks (example: the public
deficit is a flow, the government debt is a stock). Flows
are derived from the National Accounting relationship
between aggregate spending and income. Ergo:
(1) Y = C + I + G + (X M)
where Y is GDP (expenditure), C is consumption spending, I
is private investment spending, G is government spending,
X is exports and M is imports (so X M = net exports).
Another perspective on the national income accounting
is to note that households can use total income (Y) for
the following uses:
(2) Y = C + S + T
where S is total saving and T is total taxation (the other
variables are as previously defined).
You can then bring the two perspectives together
(because they are both just "views" of Y) to write:
(3) C + S + T = Y = C + I + G + (X M)
You can then drop the C (common on both sides) and you
get:
(4) S + T = I + G + (X M)
Then you can convert this into the following sectoral
balances accounting relations, which allow us to
understand the influence of fiscal policy over private
sector indebtedness. Hence, equation (4) can be rearranged
to get the accounting identity for the three sectoral
balances private domestic, government budget and
external:
(S I) = (G T) + (X M)
The sectoral balances equation says that total private
savings (S) minus private investment (I) has to equal the
public deficit (spending, G minus taxes, T) plus net
exports (exports (X) minus imports (M)), where net exports
represent the net savings of non-residents.
Thus, (S-I) can be positive if (G-T) ( the federal
deficit) is greater than (X-M) ( an assumed trade
deficit).
Also:
"Should a significant pickup in economic growth not
materialize, the net effect of these tax cuts and public
spending policies will almost certainly lead to a
significant widening of the budget deficit and to a
corresponding decline in public savings."
But (S I) = (G T) + (X M), i.e., a federal
deficit increase that exceeds a trade deficit increase
means greater public savings.
"a federal deficit increase that exceeds a trade deficit
increase means greater public savings."
Or "export" of
treasuries, dollars and other pieces of paper that allow
the private sector and government to run deficits at the
same time. Nobody in the US need to save as long as we
either print more money or sell more paper assets to
savers in the non-US part of the world.
The New York Times had an interesting piece *
discussing the National Institutes of Health collaboration
with private companies in the development of new cancer
drugs. As the piece points out, this collaboration has
proven very profitable for the drug companies, but leads
to drugs that are very expensive because the drug
companies are allowed to have patent monopolies, with no
restriction on the price they charge.
It also suggests an alternative path. It shows,
contrary to conventional wisdom in right-wing circles,
everything the government funds is not worthless garbage.
If the tables were turned, and all the funding came from
the government (rather than relying on government imposed
patent monopolies), then the new drugs could be sold at
generic prices since everyone already would have been paid
for their research.
In many cases, the generic price would be less than one
percent of the patent protected price. New cancer drugs
that might sell for $100,000 for a year's treatment, might
sell for hundreds of dollars. ** Policy types who don't
work for the pharmaceutical industry should be looking
into more efficient alternatives for financing drug
research.
Harnessing the U.S. Taxpayer to Fight Cancer and Make
Profits
By MATT RICHTEL and ANDREW POLLACK
Enthusiasm for cancer immunotherapy is soaring, and so
is Arie Belldegrun's fortune.
Dr. Belldegrun, a physician, co-founded Kite Pharma, a
company that could be the first to market next year with a
highly anticipated new immunotherapy treatment. But even
without a product, Dr. Belldegrun has struck gold.
His stock in Kite is worth about $170 million.
Investors have profited along with him, as the company's
share price has soared to about $50 from an initial price
of $17 in 2014.
The results reflect widespread excitement over
immunotherapy, which harnesses the body's immune system to
attack cancer and has rescued some patients from
near-certain death. But they also speak volumes about the
value of Kite's main scientific partner: the United States
government.
Kite's treatment, a form of immunotherapy called CAR-T,
was initially developed by a team of researchers at the
National Cancer Institute, led by a longtime friend and
mentor of Dr. Belldegrun. Now Kite pays several million a
year to the government to support continuing research
dedicated to the company's efforts.
The relationship puts American taxpayers squarely in
the middle of one of the hottest new drug markets. It also
raises a question: Are taxpayers getting a good deal?
Defenders say that the partnership will likely bring a
lifesaving treatment to patients, something the government
cannot really do by itself, and that that is what matters
most.
Critics say that taxpayers will end up paying twice for
the same drug - once to support its development and a
second time to buy it - while the company reaps the
financial benefit.
"If this was not a government-funded cancer treatment -
if it was for a new solar technology, for example - it
would be scandalous to think that some private investors
are reaping massive profits off a taxpayer-funded
invention," said James Love, director of Knowledge Ecology
International, an advocacy group concerned with access to
medicines.
The debate goes squarely to one of the nation's most
vexing challenges: rising health care and drug prices.
Kite is one of a growing number of drug and biotech
companies relying on federal laboratories. Analysts expect
the company to charge at least $200,000 for the new
treatment, which is intended as a one-time therapy for
patients.
While the law allows the government to demand
drug-price concessions from its private-sector partners,
the government has declined to do so with Kite and
generally disdains the practice.
Insisting on lower prices, federal researchers say,
would drive away innovative partners that speed the
drug-development process and benefit patients. But with
the government doing so much pivotal research, others say
that the private sector cannot afford to walk away.
"The market is so reliant on the knowledge and know-how
that comes out of the government and academic labs," said
Dr. Aaron Kesselheim, director of the Program on
Regulation, Therapeutics and Law at Brigham & Women's
Hospital in Boston....
President-elect Donald Trump's transition team is close
to picking economic commentator Larry Kudlow to be
chairman of the White House Council of Economic Advisers,
according to a report in the Detroit News.
Kudlow, 69, has served as an informal adviser to the Trump
campaign, primarily focused on tax policy and teaming
primarily with Stephen Moore, a visiting fellow at the
Heritage Foundation and fellow alumnus of President Ronald
Reagan's economic team. Moore was cited by the newspaper
as saying Thursday the selection of Kudlow would be
announced in the next 48 hours.
Kudlow's appointment, which would require Senate
confirmation, marks another non-traditional pick by the
incoming administration. Kudlow doesn't hold a Ph.D. in
economics, unlike former heads of the CEA. For five years,
he hosted a show on CNBC on business and politics, and
he's worked at the Federal Reserve Bank of New York.
During Reagan's first term, Kudlow was associate director
for economics and planning in the White House's Office of
Management and Budget. ...
Kudlow & Cramer (was) a CNBC American business
and politics television program hosted by
conservatives Lawrence Kudlow and Jim Cramer, which aired
weekdays from 2002 to 2005. (Wikipedia)
Misrepresenting 24/7 we see. No - Krugman got this right.
And yes Jared was nicer to Kudlow than I could ever be.
But soft? A day without a PeterK lie is like a day without
sunshine.
You
candidate was to weak to win the semifinals, and he would
have been crushed in the finals. He didn't have what it
takes to win in little league, and he wouldn't have had
what it takes to win in the big league either. Maybe the
democrats could have found someone who would have won
against Trump; but it sure as hell wasn't any of the
losers of their primary contest.
Someone Has to Tell John Williams Inflation Is Not
Accelerating
The Federal Reserve Board raising interest rates last
and seem poised to do so again in the not distant future.
The rationale is that the economy is now near or at full
employment and that if job growth continues at its recent
pace it will lead to a harmful acceleration in the
inflation rate.
We have numerous pieces raising serious questions about
whether the labor market is really at full employment,
noting for example the sharp drop * in employment rates
(for all groups) from pre-recession levels and the high
rate of involuntary part-time ** employment. But the story
of accelerating inflation is also not right.
This is particularly important, since John Williams,
the president of the San Francisco Federal Reserve Bank,
cited accelerating inflation as a reason to support last
week's rate hike, and possibly future rate hikes, in an
interview in the New York Times this morning. Williams has
been a moderate on inflation, so there are many members of
the Fed's Open Market Committee who are more anxious to
raise rates than him.
A close look at the data does not provide much evidence
of accelerating inflation. The core personal consumption
expenditure deflator, the Fed's main measure of inflation,
has risen 1.7 percent over the last year, which is still
under the 2.0 percent target. This target is an average,
which means that the Fed should be prepared to allow the
inflation rate to rise somewhat above 2.0 percent, with
the idea that inflation will drop in the next recession.
Anyhow, the 1.7 percent rate is slightly higher than a
low of 1.3 percent reached in the third quarter of 2015,
but it is exactly the same as the rate we saw in the third
quarter of 2014. In other words, there has been zero
acceleration in the rate of inflation over the last two
years.
Furthermore, even this modest acceleration has been
entirely due to the more rapid increase in rent over the
last two years. The inflation rate in the core consumer
price index, stripped of its shelter component, actually
has been falling slightly over the last year. It now
stands at 1.1 percent over the last year.
[Consumer Price Index Minus Food, Energy and Shelter,
2006-2016]
It is reasonable to pull shelter out of the CPI because
rents do not follow the same dynamic as most goods and
services. In fact, higher interest rates, by reducing
construction, are likely to increase the pace of increase
in rents rather than reduce them.
This issue is hugely important, since if the Fed
prevents the labor market from tightening further it will
be preventing millions of people from getting jobs. These
people are disproportionately African American and
Hispanic and also less-educated workers. The decision to
tighten will also lessen the bargaining power of a much
larger group of workers, making it more difficult for them
to get pay increases.
The weak labor market of the Great Recession resulted
in a large redistribution from wages to profits. The
tightening of the labor market in the last two years has
reversed part of this shift. If the Fed raises interest
rates enough to prevent further tightening, then it will
be locking in place this redistribution to profits. That
would be bad news for tens of millions of workers,
especially if the decision was based on a misreading of
inflation data.
President-elect Donald Trump boasted about his wealth
during his campaign. Now he's surrounding himself with
people who have similarly unimaginable riches.
Collectively, the wealth of his Cabinet choices so far
is about five times greater than President Obama's Cabinet
and about 34 times greater than the one George W. Bush led
at the end of his presidency.
And Trump still has four more key advisory spots left
to fill.
The net worth of the Cabinet Trump had selected as of
Monday was at least $13.1 billion, based on available
estimates, or more than the annual gross domestic product
of about 70 small countries.
That included the $3.7 billion Trump is estimated to be
worth, according to Forbes. (Trump has claimed to be worth
much more - around $10 billion.)
It also included the $5.1 billion in net worth that
Forbes estimated belongs to the family of Betsy DeVos, the
former Michigan Republican Party chair and education
activist selected to be education secretary.
Investor Wilbur Ross, picked to become commerce
secretary, is estimated to be worth $2.5 billion,
according to Forbes.
Linda McMahon, a former WWE executive and U.S. Senate
candidate, has been picked to serve as small business
administrator. She and her husband Vincent McMahon are
worth at least an estimated $1.35 billion, according to
Bloomberg.
Exxon Mobile CEO Rex Tillerson, nominated to become
secretary of state, is estimated to be worth $365 million,
according to Bloomberg.
Steven Mnuchin, the former Goldman Sachs executive in
line to become Treasury secretary, is worth at least $46
million, according to Politico.
Retired neurosurgeon and former presidential candidate
Ben Carson, who is in line to become the housing and urban
development secretary, was worth $26 million, according to
a Forbes estimate from 2015.
The pick for transportation secretary, Elaine Chao, the
former labor secretary, was worth an estimated $16.9
million as of 2008, when she last held public office,
according to the Center for Responsive Politics, a
Washington-based nonprofit that tracks campaign finance
data.
Two other Cabinet picks - Alabama Senator Jeff Sessions
for attorney general and Georgia Representative Tom Price
for health and human services secretary - were estimated
to be worth about $7.5 million and $13.6 million,
respectively, as of 2014, according to the center.
Former Texas governor and presidential candidate Rick
Perry, selected to be energy secretary, is estimated to be
worth about $3 million, according to the Associated Press.
U.S. Representative from South Carolina Mick Mulvaney,
picked to become director of the Office of Management and
Budget, was worth an estimated $2.6 million as of 2014,
according to the center.
Fast-food executive Andrew Puzder, picked to fill the
role of labor secretary, is also a multi-millionaire,
according to Politico.
U.S. Representative from Montana Ryan Zinke, picked to
become interior secretary, was worth an estimated $675,000
as of 2014, according to the center. ...
(Andrew Mellon tops the
list. Treasury
secretary under Harding, Coolidge and
Hoover, worth $50 billion in current
dollars. No one else is even close.)
Mellon was the third-richest American of his time -
behind only John D. Rockefeller and Henry Ford - and has
been ranked the 14th richest American of all time, in
inflation-adjusted dollars.
'Collectively, the wealth of his Cabinet choices so far is
about five times greater than President Obama's Cabinet
and about 34 times greater than the one George W. Bush led
at the end of his presidency.'
So, the Obama cabinet is
worth $2.6B apparently.
That would largely be due to Penny Pritzker,
#3 on the MarketWatch list above,
who is said to be worth $1.85B.
And, believe it or not, the Bush Jr
cabinet was apparently only worth
$382M, a pittance.
When Yellen says there's no need for fiscal stimulus -
which should be blasphemous to all "real" progressives* -
what she's saying is that the Fed can just use
uncoventional monetary policy again the next time there is
a downturn.
They gave us the recovery they wanted this past time
after all.
* of course pgl refuses to discuss this episode. His
lies of omission are the biggest of all. Krugman too
refuses to address Yellen's blasphemy. Only DeLong was
brave enough and honest enough to disagree.
"Prostate cancer laser treatment 'truly
transformative'"
By James Gallagher, HEalth and science reporter...BBC
News...12-20-2016...7 hours ago
"The approach, tested across Europe, uses lasers and a
drug made from deep sea bacteria to eliminate tumours, but
without causing severe side effects.
Trials on 413 men - published in The Lancet Oncology -
showed nearly half of them had no remaining trace of
cancer.
Lifelong impotence and incontinence are often the price
of treating prostate cancer with surgery or radiotherapy.
Up to nine-in-10 patients develop erectile problems and
up to a fifth struggle to control their bladders.
That is why many men with an early stage tumour choose
to "wait and see" and have treatment only when it starts
growing aggressively.
"This changes everything," said Prof Mark Emberton, who
tested the technique at University College London.
Triggered to kill
The new treatment uses a drug, made from bacteria that
live in the almost total darkness of the seafloor and
which become toxic only when exposed to light.
Ten fibre optic lasers are inserted through the
perineum - the gap between the anus and the testes - and
into the cancerous prostate gland.
When the red laser is switched on, it activates the
drug to kill the cancer and leaves the healthy prostate
behind..."
"But I'm also hearing from Berniebros, insisting that
anything I say must be wrong, because I criticized their
hero. And this suggests to me that we may need a
clarification of the doctrine that facts have a well-known
liberal bias. More specifically, they seem to have a
center-left bias: conservatives are big on empirical
denial, but so is some of the U.S. left."
I'd say the center-left is big on empirical denial,
especially when it comes to the rise of populism and
globalization.
They'd rather focus on Putin's hackers.
But some are coming around or at least asking
questions. See Tim Duy, DeLong, and Noah Smith.
"he search has gained an extraordinary sense of urgency
as a wave of reactionary populism sweeps the globe,
casting the elite establishment as the main beneficiary of
economic forces that have hurt the working masses.
Americans' election of Donald J. Trump, who has vowed to
radically constrain trade, and the stunning vote in
Britain to abandon the European Union, have resounded as
emergency sirens for global leaders. They must either
update capitalism to share the spoils more equitably, or
risk watching angry mobs dismantle the institutions that
have underpinned economic policy since the end of World
War II."
The center-left, like Krugman, EMichael, pgl, Bakho,
etc. argue that's just racism. That's it.
There's been an upsurge in racism and tribalism
worldwide for some inexplicable reason. Fox News.
Or Obama.
Even the U.S you had Father Coughlin, the populist Huey
Long, and Charles Lindbergh's America First movement which
was isolationist just like Trump.
"Europe as a whole was
badly hit, in both rural and industrial areas. Democracy
was discredited and the left often tried a coalition
arrangement between Communists and Socialists, who
previously had been harsh enemies. Right wing movements
sprang up, often following Italy's fascist mode."
By Brian Wheeler...BBC News, Washington
DC...12-20-2016...6 hours ago
"Gun ownership has traditionally been associated with
the right wing in America but the election of Donald Trump
has prompted some left-wingers to join gun clubs - and
even start preparing for the collapse of society.
"I really didn't expect to be thinking about purchasing
a gun. It was something that my father did and I rolled my
eyes at him."
Clara, a 28-year-old nursing student, grew up in the
Mid-West, where "the folks that had guns were seen as
hicks" or were just "culturally different", she says.
But since the election of Donald Trump in November she
has started going to a gun range for the first time and is
shopping around for a semi-automatic pistol.
"It's been seeing the way that Trump's election has
mobilised a lot of the far right and given them hope," she
says, citing a rise in reports of hate crimes and neo-Nazi
activity.
As a transgender woman, she does not fear for her
personal safety in the Californian city where she now
lives but she says she knows people in rural areas "who
woke up and found a bunch of swastikas and words like
'faggot' and 'trannie' scrawled all over their building".
She foresees a wide-ranging struggle between the Trump
administration and the left over issues such as
immigration and racial politics.
But won't buying a gun just increase tensions?
"Things are already escalating and they will continue
to do so and me not engaging or being prepared to defend
my friends by force... isn't going to stop people from
being attacked or harassed," Clara says.
Gun sales in America hit record levels in October amid
fears a Hillary Clinton election victory would lead to
increased controls.
Many expected the election of Donald Trump, whose
candidacy was backed by the National Rifle Association, to
bring an end to the panic buying. Shares in gun
manufacturers dropped by as much as 18% following his
victory.
But instead FBI background checks for gun transactions
soared to a new record for a single day - 185,713 - during
the Black Friday sales on 25 November, according to gun
control news site The Trace.
Some of this has been put down to gun retailers selling
off stock at reduced prices, but there have also been
reports of more "non-traditional" buyers, such as African
Americans and other minorities, turning up at gun shops
and shooting ranges..."
"The Single Greatest Force in American Politics?
Partisanship"
by Chuck Todd, Mark Murray and Carrie Dann...Dec 20
2016...8:56 am ET
"Why partisanship is the single greatest force in
American politics"
Want to know why partisanship -- or party
identification -- is the single greatest force in American
politics today? Just check out these shifting attitudes
about the economy and nation's direction in the latest
NBC/WSJ poll:
... 68% of Republicans believe the economy will get
better in the next 12 months (versus just 14% of GOPers
who said this a year ago in the Dec. 2015 NBC/WSJ poll).
... By contrast, only 19% of Democrats said the economy
will improve next year (compared with 37% of them who said
this last December).
... Right now, 52% of Republicans say the country is
headed in the right direction (versus just 5% who said
this in December 2015).
... Conversely, only 18% of Democrats say the country
is headed in the right direction (compared with 37% of
them who said this a year ago).
Folks, the underlying dynamics of the U.S. economy have
remained pretty much the same over the past year. The only
thing that has changed is the party that will be in the
White House next year. It's all confirmation that so much
public opinion is shaped through Americans' partisan
lenses, and little else. Want another example of this from
our NBC/WSJ poll? A combined 86% of Democrats say they are
bothered a great deal/quite a bit by Russia's interference
in the 2016 presidential election, versus just 29% of
Republican respondents who say this..."
"Asymmetrical warfare: Democrats have knives,
Republicans have guns"
"But if partisanship is the greatest force in American
politics, there's maybe a more important dynamic at play
-- the asymmetrical warfare between the two parties. As
the New York Times' David Leonhardt writes in comparing
how Barack Obama is leaving the White House versus how
Republican Pat McCory is leaving power in North Carolina,
Democrats are wielding knives while Republicans have guns.
Think of the 2011 debt-ceiling standoff. Mitch McConnell
denying Obama's Supreme Court pick to even get a hearing.
And now what's playing out in North Carolina. Republicans
are playing a different game than Democrats are playing."
"Trump's popularity improves -- but he's still the most
unpopular president-elect in the history of our poll"
"Also from our NBC/WSJ poll: 40% of Americans now have
a positive view of Donald Trump, versus 46% who have a
negative view. That's up considerably from his 29%-62%
rating in the October NBC/WSJ poll. Still, Trump's 40%-46%
fav/unfav score is the WORST in the history of our poll
for a president-elect and the first time it's a
net-negative. Bill Clinton's was 60%-19% in Dec. 1992,
George W. Bush's was 48%-35% in Dec. 2000, and Barack
Obama's was 67%-16% in Dec. 2008.
My prescription and takeaway is for the next four years
for the Democratic Party especially those in D.C. is for
Hyper Partisanship, no holds barred bare knuckle
deliberate faithless drug out deliberations and
negotiations with the GOP, and the ceaseless cacaphonic
BLAME, BLAME, BLAME media game of imagined, fake, and real
failures of every Republican especially Donald Trump and
his family.
There you have it, your assignment for the
next next Presidential Election.
This is, of course, the opposite of the Democratic Party
Obama-way and the Clinton-way that reasonably expected the
American Electorate to see through and reject those same
tactics used on President Obama and Hillary Clinton when
they relied upon logic not lies, facts not falsehoods, and
intellectual and scientific critical thinking instead of
rants, ravings, and unhinged screeds to win the argument
and sway the Electorate.
IOW, time to stick it to Middle
America Fly Over country and make them see how wrong they
were to vote for Trump while aiding the BiCoastal States,
and the majority of voters in the last Election, survive
the next 4 years.
First and foremost start by insisting on cutting off or
at least severely reducing any and all AG support welfare
and corporate welfare for noncompetitive manufacturers
before any support for cutting Obamacare, SS, and
Medicare, which are the highest items on Ryan's and the
GOP's agenda.
Trump and his assembled Cabinet picks and Team are a full
month away from taking the Oath of Office and have loaded
the DEMS up with issues at the heart of every American
Worker, Blue and Middle Class: Class Warfare and Pay
Inequality
"Why Donald Trump Could Spell Doom for CEO Pay
Transparency"
by Martha C. White...Dec 20 2016...7:49 am ET
"Outsized CEO pay is an issue coming under increasing
scrutiny, and Donald Trump has already promised to do away
with legislation that would require companies to be more
transparent.
However, compensation experts say an executive branch
filled with corporate titans could benefit the relative
few atop the corporate ladder at the expense of everyone
else.
The implicit assumption is that these CEOs will look
out for their own.
Furthermore, because Trump is one of those CEOs
himself, it might very well "put a halo effect around the
whole issue [of executive pay] for a while," said John
Challenger, CEO of executive outplacement firm Challenger,
Gray & Christmas.
Repeal of Dodd-Frank?
"I think the first year will be a true measure of who
he is as a policy person," said Lawrence Mishel, president
of the Economic Policy Institute, a left-leaning think
tank...
...Starting next year, the Securities and Exchange
Commission planned to require companies to disclose how
much their CEO makes as a ratio of median employee pay,
giving shareholders - and ordinary Americans - a window
into how companies treat their CEO compared to the
rank-and-file workers, but the future of that rule is in
limbo.
Donald Trump, although he railed against fat CEO pay
packages during his campaign, calling them "disgraceful,"
also vowed to "dismantle" the Dodd-Frank Act, which
provided the mandate for the new SEC rule...
...For the future, many expect the SEC's push for
increased transparency to be scuttled, in keeping with
Donald Trump's promise to roll back regulations of all
types...
..."they believe now that it's likely to be pulled out
is when you look at the cabinet Trump is putting together,
there are a lot of billionaires, a lot of CEOs," Kropp
said.
"It seems to me that the pressure is going to abate.
There's going to be less scrutiny," Challenger
predicted..."
This doubling of the sub fleet was outlined in a defense
White Paper earlier this year. Basically, its due to
concerns about China. The article doesn't say, but I
assume these are AIP powered.
Australia, France sign submarine deal
"Australia and France on Tuesday signed the final
agreement for French naval contractor DCNS to build 12
submarines in what Prime Minister Malcolm Turnbull called
a "critically important step in the development of our
security."
The 34.9 billion euro ($36.3 billion) deal, including
separate agreements with US and Australian contractors, is
one of the world's largest defense contracts.
Turnbull described the deal as the "last foundation
stone needed to ensure Australia is able to develop a
cutting-edge sovereign submarine capability."
The submarines will be a conventionally-powered version
of France's 4,700-tonne nuclear-fuelled Barracuda complete
with stealth technology. France and Australia agreed in
April to the deal, for which Germany and Japan were also
contending.
Most of the submarine production will be in the
southern city of Adelaide and create 2,800 high-skilled
jobs, Turnbull said.
US defense giant Lockheed Martin will produce the
combat systems for the Barracudas."
A war of words has erupted between a group of prominent
Australian businessmen and seemingly the entire southern
state over the Federal Government's controversial French
submarines deal.
(Adelaide, South Australia, is to be
a recipient of much employment related
to this deal.)
The group, which includes entrepreneur Dick Smith, Gary
Johnston of Jaycar Electronics and adman John Singleton,
took out a full-page advertisement in
The Australian on Tuesday slamming the move to go with
French producer DCNS, suggesting buying off-the-shelf
nuclear subs would be a better option.
They warned the current deal, announced on April 28
this year, will "condemn our sailors to their graves". The
group says it can't understand the Federal Government's
decision to award a multi-billion deal to French supplier
DCNS, which will be required to deliver 12 diesel-powered
submarines for which there are no drawings and no plans.
They said under the deal, the navy's next fleet of
conventionally-powered subs would come into service at a
time when the rest of the world would be operating nuclear
fleets, which would be "like putting a propeller plane up
against a modern jet".
"We will be condemning our sailors to their graves,"
the advertisement said. It also questioned the economics
of the decision, saying it would be cheaper to subsidise
car industry jobs, if creating jobs was the desired
outcome. Mr Johnston said DCNS was being asked to build a
diesel-powered version of what is essentially a
nuclear-powered sub.
"It's a bit like trying to turn a cat into a dog. It's
crazy. Why would you do it?" he told Sky News. "They
haven't got a drawing, they haven't got a plan. Their
current nuclear submarine, the Barracuda, is sitting on a
slipway. It won't even be tested until next year."
DCNS declined to comment on the row, but the Federal
Government said the decision to award the contract to the
company came after a competitive evaluation process, which
involved the best experts available. It said the new subs
would be regionally superior and would allow Australia to
pursue its national and international interests. ...
The government estimates building the submarines in
Adelaide will create 2800 jobs.
That would be the equivalent of giving every single one
of those 2800 workers a cheque for $5.4 million - or
handing every single man, woman and child in South
Australia a cheque for nearly $9000.
Speaking on 2GB, Mr Johnston said "if we were smart" we
would simply buy the French or British nuclear sub, or
even the "ultimate" US Virginia class nuclear submarine,
which has 33 years of fuel.
"You don't have to have a nuclear industry in Australia
- you just simply buy the thing and 33 years later you
trade it in on a new one," he said.
"It's unbelievable how these things are just such an
order of magnitude better than a diesel sub. Every one of
the enemy we would hopefully not ever encounter, but if we
do, would have nuclear submarines which will blow diesel
submarines out of the water."
But the group was dismissed as "sad old men" by South
Australian Premier Jay Weatherill, who rubbished their
proposal to go nuclear. "[It] looked like it was scribbled
on the back of a serviette after a long lunch," Mr
Weatherill tweeted on Tuesday.
Defence Industry Minister Christopher Pyne, who holds
the South Australian seat of Sturt, described the
criticism as "misinformed, misguided" and "entirely
wrong". "We don't have nuclear energy in Australia and
therefore we can't have nuclear submarines," Mr Pyne told
ABC radio on Wednesday.
"The advice from defence was entirely clear and that
was that the French DCNS design was the best for what we
needed.
"Quite clearly we are not getting a Short Fin Barracuda
submarine, we are getting a unique design for Australian
conditions. We've chosen DCNS because we believe that they
have the best record and the best designs in terms of
large submarines both nuclear and non nuclear." ...
#- Richard Harold "Dick" Smith, AC (*) is an Australian
entrepreneur, businessman, aviator, philanthropist, and
political activist. He is the founder of Dick Smith
Electronics, Dick Smith Foods and Australian Geographic,
and was selected as the 1986 Australian of the Year. In
2010 he founded the media production company Smith&Nasht
with the intention of producing films about global issues.
In 2015 he was awarded the Companion of the Order of
Australia (*), and is a fellow of the Committee for
Skeptical Inquiry. (Wikipedia)
This should serve as a warning to those here that put
their faith in some Republican senators such as S. Lindsey
Graham and S. John McCain, they can not trusted, they are
straw men, sent out to make their Party look less extreme
than it is in fact.
Roman politics involved fierce competition among
ambitious men. But for centuries that competition was
constrained by some seemingly unbreakable rules. Here's
what Adrian Goldsworthy's "In the Name of Rome" says: *
"However important it was for an individual to win fame
and add to his own and his family's reputation, this
should always be subordinated to the good of the Republic.
The same belief in the superiority of Rome that made
senators by the second century BC hold themselves the
equals of any king ensured that no disappointed Roman
politician sought the aid of a foreign power."
In the Name of Rome: The Men Who Won the Roman Empire
By Adrian Goldsworthy
General in exile: Sertorius and the Civil War
Quintus Sertorius (c. 12572 BC)
The Roman political ιlite was not unique in its
competitiveness and desire to excel. The aristocracies of
most Greek cities and indeed of the overwhelming
majority of other communities in the Mediterranean world
were just as eager to win personal dominance and often
unscrupulous in their methods of achieving this. Roman
senators were highly unusual in channelling their
ambitions within fairly narrow, and universally
recognized, boundaries. The internal disorder and
revolution which plagued the public lives of most city
states were absent from Rome until the last century of the
Republic. Even then, during civil wars of extreme savagery
when the severed heads of fellow citizens were displayed
in the Forum, the Roman aristocracy continued to place
some limits on what means were acceptable to overcome
their rivals. A common figure in the history of the
ancient world is the aristocratic exile the deposed king
or tyrant, or the general forced out when he was perceived
to be becoming too powerful at the court of a foreign
power, usually a king. Such men readily accepted foreign
troops to go back and seize power by force in their
homeland as the tyrant Pisistratus had done at Athens
or actively fought against their own city on their new
protector's behalf, like Alcibiades.
Rome's entire history contains only a tiny handful of
individuals whose careers in any way followed this
pattern. The fifth-century BC, and semi-mythical, Caius
Marcius Coriolanus probably comes closest, for when
banished from Rome he took service with the hostile
Volscians and led their army with great success. In the
story he came close to capturing Rome itself, and was only
stopped from completing his victory by the intervention of
his mother. The moral of the tale was quintessentially
Roman. However important it was for an individual to win
fame and add to his own and his family's reputation, this
should always be subordinated to the good of the Republic.
The same belief in the superiority of Rome that made
senators by the second century BC hold themselves the
equals of any king ensured that no disappointed Roman
politician sought the aid of a foreign power. Senators
wanted success, but that success only counted if it was
achieved at Rome. No senator defected to Pyrrhus or
Hannibal even when their final victory seemed imminent,
nor did Scipio Africanus' bitterness at the ingratitude of
the State cause him to take service with a foreign king.
The outbreak of civil war did not significantly change
this attitude, since both sides invariably claimed that
they were fighting to restore the true Republic. Use was
often made of non-Roman troops, but these were always
presented as auxiliaries or allies serving from their
obligations to Rome and never as independent powers
intervening for their own benefit. Yet the circumstances
of Roman fighting Roman did create many highly unorthodox
careers, none more so than that of Quintus Sertorius, who
demonstrated a talent for leading irregular forces and
waging a type of guerrilla warfare against conventional
Roman armies. Exiled from Sulla's Rome, he won his most
famous victories and lived out the last years of his life
in Spain, but never deviated from the attitudes of his
class or thought of himself as anything other than a Roman
senator and general....
Paul Krugman has drawn on the writing of Adrian
Goldsworthy to make sense of and point out what he
obviously considers to be a possible undermining of the
American republic. The complete Goldsworthy passage
strikes me as critical in understanding Krugman.
Though
Krugman has mentioned Goldsworthy before, I only began to
read "In the Name of Rome" yesterday.
"F-35 program is not 'out of control', JSF chief fires
back at Trump"
By Ryan Maass ... Dec. 20, 2016 ... 1:01 PM
"WASHINGTON, Dec. 20 (UPI) -- The F-35 program is not
"out of control" as President-elect Donald Trump suggests,
the head of the F-35 program office asserted.
F-35 executive director Lt. Gen. Christopher Bogdan
maintained the program was going as planned in response to
the incoming president's controversial tweet, which
appeared to threaten the plane's funding.
"The F-35 program and cost is out of control. Billions
of dollars can and will be saved on military (and other)
purchases after January 20th," Trump tweeted on Dec. 12.
The Lockheed Martin-led effort has been characterized
by numerous delays since its inception. Despite the
setbacks, however, Bogdan contends the program's leaders
have reined in the finances for the production of the
5th-generation fighter.
"I have no doubt, that given the controversy on the
F-35 program over the years, that there's a perception
that this program is out of control," Bogdan told
reporters. "That's in the past."
The program director went on to say industry partners
have made necessary adjustments and cut excessive
expenditures. However, he also conceded the development
phase of the program could face additional delays..."
A Reason writer returns to Appalachia to ask: Why
don't people who live in places with no opportunity just
leave?
...............
So why don't people just leave? That question is actually
surprisingly easy to answer: They did. After all, 80
percent of McDowell's population, including my
grandparents, cleared out of the county to seek
opportunities elsewhere during the last half-century.
......................
So why don't people just leave? That question is actually
surprisingly easy to answer: They did. After all, 80
percent of McDowell's population, including my
grandparents, cleared out of the county to seek
opportunities elsewhere during the last half-century.
[
This is critically important to understand. What has been
and is necessary in economically depressed areas where
development over several years time would be unlikely is
to assist migration. This is precisely what was done in
East Germany to pronounced benefit through Germany but is
little recognized or accepted by American analysts. ]
Simon Wren-Lewis: Understanding Free Trade: * "There
you have, in one calm and measured paragraph, the
contradiction at the heart of the argument...
...put forward by Liam Fox and others that leaving the
European Union will allow the UK to become a 'champion of
free trade'. You cannot be a champion of free trade, and
have sovereignty in the form of taking back control. It is
not a contradiction, of course, if you are happy to accept
the regulatory standards of the US, China or India. That
appears to be the position of Leave leaders like MP Jacob
Rees Mogg. Ellie Mae O'Hagan spells out what this may mean
in practice. Lead in toys--bring them in so we can sign a
trade agreement with China. And you can be sure that this
will be the nature of the discussion every time a trade
deal is signed. In each case we will be told that we have
to accept this drop in regulatory standards, because
British export jobs are on the line.
This is the point of Dani Rodrik's famous impossible
trilemma: ** you cannot have all three of the nation
state, democratic politics and deep economic integration
(aka free trade). His trilemma replaces sovereignty, by
which is meant in this context the nation state being able
to do what it likes, by democracy. In the past I have
always found this problematic. Surely a democracy can
decide to give away a bit of its sovereignty in return for
the benefits of international cooperation (in the form of
trade deals, or indeed any other kind of international
cooperation). After all, every adult in a relationship
knows that this relationship means certain restrictions on
doing just what they would like...
Having carefully read the essay by Simon Wren-Lewis, along
with this passage from Brad DeLong, the argument here
against leaving the European Union makes no sense. Though
I think the UK would fare better in the EU, the bitter
argument by Wren-Lewis leaves me indifferent. The idea
that the UK apart from the EU would suddenly be exploited
by the likes of India or China has no logic that I can
find.
I have not understood the bitterness of Wren-Lewis
to the Labour Party of Jeremy Corbyn since the Brexit
vote, especially so since Corbyn wanted the UK to remain
part of the EU.
"Trump meets with Carlos Slim as Mexican leaders seek
better relations"
By Philip Rucker, Robert Costa and Joshua
Partlow...December 19 at 7:29 PM
"In the closing days of his campaign, Donald Trump
vilified one of the world's richest men - Mexican
billionaire Carlos Slim - as part of a globalist cabal
conspiring to extinguish his populist candidacy.
Yet over the weekend, Slim journeyed to Mar-a-Lago,
Trump's estate in Palm Beach, Fla., for what the
president-elect described as "a lovely dinner with a
wonderful man."
The peacemaking gesture - the culmination of weeks of
back-channel negotiations that included a secret visit to
Mexico City by a Trump envoy - signals a possible thawing
between Trump and Mexico's business and political elite,
which he had used relentlessly as a foil throughout his
campaign.
The communications raised hopes in Mexico's business
community that Trump might reconsider his vow to tear up
the North American Free Trade Agreement and be persuaded
to adopt less hard-line immigration and economic policies,
which were cornerstones of his campaign..."
"Do not worry. We are going to build the wall,"
Trump said, reiterating his promise to erect a
wall along the U.S.-Mexico border to keep out
undocumented immigrants and to make Mexico pay for it.
Obama Administration Intends to Transfer 17 or 18
Guantαnamo Detainees
http://nyti.ms/2i9aL0z
NYT - CHARLIE SAVAGE - December 19, 2016
WASHINGTON - When Prime Minister Matteo Renzi of Italy
visited the White House in October for a state dinner, he
made a commitment to President Obama: Italy, which
resettled a Yemeni detainee from Guantαnamo Bay last
summer, would take one more person on the transfer list.
But before the deal was completed, Mr. Renzi resigned.
So a day after his successor, Paolo Gentiloni, formed a
government on Dec. 14, Secretary of State John Kerry
called to congratulate Mr. Gentiloni - and to urge him to
follow through on the commitment, according to an official
familiar with the negotiations. Mr. Gentiloni agreed,
leading a rush to finalize the details and paperwork.
The effort was part of a burst of urgent, high-level
diplomatic talks aimed at moving as many as possible of
Guantαnamo's 22 prisoners who are recommended for
transfer. By law, the Pentagon must notify Congress 30
days before a transfer, so the deadline to set in motion
deals before the end of the Obama administration was
Monday.
By late in the day, officials said, the administration
had agreed to tell Congress that it intended to transfer
17 or 18 of the 59 remaining detainees at the prison; they
would go to Italy, Oman, Saudi Arabia and the United Arab
Emirates. If all goes as planned, that will leave 41 or 42
prisoners in Guantαnamo for Donald J. Trump's
administration. Mr. Trump has vowed to keep the prison
operating and "load it up with some bad dudes." ...
The Shiller 10-year price-earnings ratio is currently
28.08, so the inverse or the earnings rate is 3.56%. The
dividend yield is 1.98%. So an expected yearly return over
the coming 10 years would be 3.56 + 1.98 or 5.54% provided
the price-earnings ratio stays the same and before
investment costs.
Against the 5.54% yearly expected return on stock over
the coming 10 years, the current 10-year Treasury bond
yield is 2.56%.
"The Subpoena That Rocked The Election Is Legal
Garbage, Experts Say"
'The warrant assumes that the mere existence of emails
from or to Hillary Clinton is probable cause that a crime
occurred'
by Matt Ferner, National Reporter, Ryan Grim,
Washington bureau chief & Nick Baumann, Senior Enterprise
Editor all of The Huffington Post...12/20/2016... 02:25 pm
ET...Updated 16 minutes ago
"The warrant connected to the FBI search that Hillary
Clinton says cost her the election shouldn't have been
granted, legal experts who reviewed the document released
on Tuesday told The Huffington Post.
FBI Director James Comey shook up the presidential race
11 days before the election by telling Congress the agency
had discovered new evidence in its previously closed
investigation into the email habits of Clinton, who was
significantly ahead in the polls at the time.
When Comey made the announcement, the bureau did not
have a warrant to search a laptop that agents believed
might contain evidence of criminal activity. The FBI set
out to rectify that two days later, on Oct. 30, when
agents applied for a warrant to search the laptop, which
was already in the FBI's possession. The FBI had seized
the computer as part of an investigation into former Rep.
Anthony Weiner, the estranged husband of Clinton aide Huma
Abedin.
The unsealed warrant "reveals Comey's intrusion on the
election was as utterly unjustified as we suspected at
time," Brian Fallon, a Clinton campaign spokesman, said on
Twitter Tuesday.
Clinton's lead in the polls shrank in the wake of
Comey's announcement. Then, just days ahead of election,
the FBI announced its search was complete, and it had
found no evidence of criminal activity. Clinton officials
believe that second announcement damaged her as much as,
or more than, the first, by enraging Trump supporters who
believed the fix was in.
The legal experts' argument against the validity of the
subpoena boils down to this: The FBI had already publicly
announced that it could not prove Clinton intended to
disclose classified information. Without that intent, and
without evidence of gross negligence, there was no case.
The warrant offers no suggestion that proving those
elements of the crime would be made easier by searching
new emails.
The essence of the warrant application is merely that
the FBI has discovered new emails sent between Clinton and
Abedin.
That's not enough. The idea that the mere existence of
emails involving Clinton may be evidence of a crime is
startling, said Ken Katkin, a professor at Salmon P. Chase
College of Law.
"The warrant application seems to reflect a belief that
any email sent by Hillary Clinton from a private email
server is probably evidence of a crime," Katkin said. "If
so, then it must be seen as a partisan political act,
rather than a legitimate law enforcement action."
The warrant never should have been granted, attorney
Randol Schoenberg argued. "I see nothing at all in the
search warrant application that would give rise to
probable cause, nothing that would make anyone suspect
that there was anything on the laptop beyond what the FBI
had already searched and determined not to be evidence of
a crime, nothing to suggest that there would be anything
other than routine correspondence between Secretary
Clinton and her longtime aide Huma Abedin," Schoenberg
wrote in an email.
"I am appalled," he added, noting that the name of the
agent in charge had been redacted in the copy of the
document publicly released.
Katkin agreed. "This search warrant application appears
to have been meritless. The FBI should not have sought it,
and the magistrate judge should not have granted it," he
:
...Federal Magistrate Judge Kevin Fox, who approved the
search warrant, didn't immediately respond to a request
for comment.
"The Fourth Amendment requires you to pretty much know
that what you're looking for is there ― not speculation.
This is just speculation," Cunningham said."
"Jack Bogle tells you the secret to becoming a winning
investor"
By Chuck Jaffe, Columnist...Dec 20, 2016...11:40 a.m.
ET
..."On smart beta investing in general:
Bogle: Smart beta is stupid.
So not one of these new index products is intriguing?
Bogle: No, no, no, no, no. Academics can find
anything with these masses of data they have on their
computers. They can find something that works in the past,
it's as easy as rolling off a log. But it almost never
works in the future and not for very long - because they
all forget the most important single thing that happens in
our markets reversion to the mean. As the Good Book
says, 'And the first shall be last and the last shall be
first.'...
On what to expect from the market:
Bogle: The key to stock market investment returns is
today's dividend yield [around 2%] plus future earnings
growth. Nobody knows what that earnings growth will be,
but I am guessing it will be maybe in the range of 4% to
5%. That seems like an informed reasonable expectation.
You compare that with history and we are looking at
something very different. An average dividend yield not of
2% but of maybe 4.5%, and earnings growth has averaged
over 6% over the last 50 years.
So we have lower earnings forecast and a much lower
dividend yield built in. No one is going to change that.
It's like buying a bond, what is the interest rate when
you buy in. So we're talking about lower returns from
investment side, from what corporations do.
The other side of total return on stocks is what we
call speculative return, and that's how bullish or bearish
investors are, which is measured by the price/earnings
multiple -- how many times earnings your companies sell at
or the total stock market sells at. Over the long-term
past, that number has been about 15 times earnings. Today,
depending on who you are listening to, it could be as high
as 25 times earnings. ...I look backward at reported
earnings after all the bad stuff and I'm looking at a p/e
of 25. So the market is at least fully valued and I think
it is reasonable to expect possibly negative returns but
certainly no positive speculative return.
So we're looking at future market returns, if we are
lucky, of 4-5% before the costs of investing are
deducted."
I mean that I am suffering, physically, about the
ramifications of Donald Trump being officially elected as
the next President of the United States of America. I feel
despondent, looking through gloomy glass, looking for a
bright shiny object to deflect, even if only for a moment.
I mean if we immediately try to impeach him, we would have
Mike Pence (ak Tung) as president. Maybe we could embroil
him in a four year impeachment process.
As he slashes
his way, destroying Social Security and Medicare.
"U.S. Rig Count Up on Land, Flat Offshore
permian"
By MarEx...2016-12-16
"For the seventh week in a row, the benchmark Baker
Hughes Rig Count trended upwards, bringing the combined
count of active oil and gas rigs in the U.S. to 637.
However, only 22 of these were offshore rigs, essentially
unchanged from the same period last year.
The largest part of the onshore increase was in Texas,
where activity in the Permian Basin and Eagle Ford fields
has brought the state's count by 14 rigs in one week.
Taken together, the Permian and Eagle Ford accound for
nearly half of U.S. drilling activity, with 302 rigs
between them. Compared with offshore projects, onshore
shale drilling campaigns like those in the Eagle Ford are
remarkably inexpensive and brief; a shale well's breakeven
price point is typically in the range of $30-40, depending
on the field, and it is often a matter of weeks between
setting up a rig and pumping first oil.
West Texas Intermediate crude prices were at $52 per
barrel on Friday, well above the price point that would
induce shale producers to begin new drilling, analysts
say. In addition, Goldman Sachs raised its outlook for
crude oil prices for mid-2017, predicting WTI prices at
$57.50 by the second quarter. Goldman cited the recent
OPEC and non-OPEC agreements to cut production by 1.6
million barrels per day, and said that it expects
compliance with the cut agreement in excess of 80 percent.
However, assuming that the OPEC agreement holds and
that competitors do not raise output to offset it, a price
of $57.50 is still below the level at which many offshore
projects become competitive, says Wood Mackenzie. In July,
the firm found that only 20 percent of deep- and
ultra-deepwater projects at the pre-FID stage are
commercially viable at $60 per barrel suggesting that
offshore activity may remain quiet until prices rise
further."
"...The autonomy technology being developed by ONR is
called Control Architecture for Robotic Agent Command and
Sensing, or CARACaS. The components that make up CARACaS
(some are commercial off-the-shelf) are inexpensive
compared to the costs of maintaining manned vessels..."
The Republican controlled House and Senate has been largely busy passing bills in the few days
left in 2016. This particular one caught my eye.
Michigan had put in place a new Unemployment System (Michigan Data Automated System or MiDAS)
to help in detecting unemployment fraud.
With the passage of Senate Bill 1008 by the Republican led House , $10 million is transferred
from the Unemployment Contingent Fund to the General Fund to be done with in the General Fund as
determined by the Republican held Legislature.
Just a little history;
MiDAS was put in place (2013) by Governor Rick Snyder of Flint, Michigan fame to automate the
system away from the manual process. The system sends out a series of questions, which the Unemployment
Applicant has to answer picking from listed answers. There is no room for explanation. The claimants
chosen answers from the list of answers are then loaded into the MiDAS data base and notification
is sent to the former employer who then confirms the answers the claimant has listed in the system.
If there is any discrepancy, MiDAS assumes the claimant has committed a potential fraud.
Another questionnaire is then sent to the claimant, which is also limited to listed responses.
If you do not respond in 10 days, it is assumed a fraud has been committed as determined by MiDAS.
A notice is "supposedly" sent out and the claimant has 30 days to answer. If no notice is sent out
and the claimant does not answer, MiDAS assumes fraud and the issue goes to collections where just
about anything can take place to collect the unemployment funds already given to the claimant. There
is little or no human interaction throughout the process and little can be done to explain circumstance
during the process.
"
The Michigan Unemployment Insurance Agency , partly at the request of the federal government
and partly on its own, reviewed 22,427 cases in which a computer determined a claimant had committed
civil fraud between October 2013 and October 2015 and found that 20,965 of those cases did not
involve fraud. Unemployment Insurance Agency spokesman Dave Murray said on Wednesday. That's an
error rate of more than 93%."
The $10 million will be transferred from the Unemployment Contingent Fund which had already grown
by 400%
after the MiDAS caused spike in fraud cases of which nearly all of them unfounded.
Senate Bill 1008 is balancing the state budget on the backs of innocent citizens wrongfully accused
of false unemployment claims.
Governor Rick Snyder spent $47 million of taxpayer funds to install MiDAS which has been shown
to be correct in determining fraud < 7% of the time. Rather than give the funds to those who were
unjustly denied Unemployment Compensation by MiDAS, the Republican led Michigan legislature and Republican
governor Rick Snyder are keeping much of it in the Unemployment Contingent (used to train workers
and for rainy days) and will also transfer $10 million of it to the General Fund to help balance
the budget. This is the same as using the additional Medicaid funding received from the expansion
to balance the budget rather than set it aside for later years which would have kept Michigan from
having to add to Medicaid funding till 2027. It too was used to balance the budget. By doing so in
both cases, the Republicans do not have to raise taxes on the rich in income.
Longtooth , December 18, 2016 8:14 pm
What? You mean to tell me that a conservative right wing republican controlled government is
trying to eliminate or grossly reduce a valued safety net feature provided by government (public
funds)?
What is the world coming to?
P.S. Did you perhaps think conservatives favor and support public funds use in safety nets
for labor (as opposed to capital owner's safety nets)? Whatever gave you that idea? Reagan's "welfare
queen" speech perhaps?
run75441 , December 18, 2016 10:24 pm
Actually, it is the failure of Snyder and the Repubs to acknowledge the error of "MiDAS" in
swindling all Michigan citizens in general and have chosen to keep the funds they have swindled
rather than acknowledge the error publically and give the funds to those hurt by "MiDAS." Mistakes
do happen and it would have been easy enough to fix by adding an area for explanation and in doing
two mailings of the questionnaire to the Unemployment applicant. The state is attempting to eliminate
people using a computer system which does not allow for applicant error and inturn is not 100%
fool-proof in mailing out notification.
The state has already acknowledged that 93% of the time it has made an error and yet they have
failed to reconcile it.
beene , December 19, 2016 7:26 am
Run, if you want to correct problems like this; where error is a feature. Make it a criminal
fraud to sell the state or federal government a program that the error rate is more than 4%.
Beverly Mann , December 19, 2016 9:13 am
The problem with that suggestion, Beene, is that fraud-criminal or civil-requires knowledge
of falsity, or intent to steal. The idea of declaring a particular error rate a criminal fraud
is a non sequitur; it's absurd.
But selling a system that so clearly had no ability to accomplish its supposed purpose, and
whose purpose seems to have actually been to simply kill the unemployment compensation program-and
whose method was accusing virtually everyone of fraud who applied for unemployment compensation-does
not appear to be mere incompetence. It does appear to be knowing-i.e., a fraud.
And I would think it is prosecutable. The Justice Dept. apparently hasn't pursued the matter,
and of course under Sessions it won't. But two years from now, there will be a Democrat about
to be inaugurated as governor and, hopefully also, a Dem as AG. Ingram County (Lansing, the state
capitol) is always Dem, I believe, and even now it's prosecutors probably could launch a criminal-fraud
inquiry-and it should. But the statute of limitations probably will not have run by, say, mid-2019,
so it will still be prosecutable then by a Dem AG's office. And presumably, this will be a big
campaign issue statewide in 2018.
Which brings me to this: In virtually every instance (the one exception is Romney during his
first two years as governor after running as a moderate, before starting to run as far-right presidential
primary candidate) of some rightwing successful businessperson winning a state governorship (and
now, president), on the claim that he's been such a success at business, and, well, shouldn't
the government be run like a business, that person has proved utterly incompetent. Snyder and
Illinois governor Bruce Rauner are exhibits A and B; Florida governor Rick Scott is Exhibit C.
As for people who were falsely accused of fraud under what itself was a fraudulent system,
they should file a class action lawsuit in state court against the folks who sold the state that
snake oil.
Warren , December 19, 2016 9:44 am
You seem to be assuming the problem is with the computer system. If the computer system is
simply implementing the law, then there is no fraud by the company that created it. Perhaps the
problem is in the law itself, or with the people who do not return the forms when they are supposed
to.
Bill White , December 19, 2016 1:44 pm
There is a very interesting book, written by the estimable Math Babe (www.mathbabe.org), Cathie
O'Neill about this phenomenon called Weapons of Math Destruction. I can't recommend it enough.
Combining the supposed lack of bias of statistics, conservative's ardent desire to treat the government
as just another tool for personal monetary profit and the right's natural desire to kick people
when they are down and steal their lunch money means these stories will just proliferate.
The headline in last Sunday's San Jose Mercury News was all about AI as the next wave of technological
profit making. The future is not likely to be comforting. Instead of asking where our jetpacks
are, we will be asking where all our stuff went.
"U.S. Rig Count Up on Land, Flat Offshore
permian"
By MarEx...2016-12-16
"For the seventh week in a row, the benchmark Baker Hughes Rig Count trended upwards, bringing
the combined count of active oil and gas rigs in the U.S. to 637. However, only 22 of these were
offshore rigs, essentially unchanged from the same period last year.
The largest part of the onshore increase was in Texas, where activity in the Permian Basin and
Eagle Ford fields has brought the state's count by 14 rigs in one week. Taken together, the
Permian and Eagle Ford accound for nearly half of U.S. drilling activity, with 302 rigs between
them. Compared with offshore projects, onshore shale drilling campaigns like those in the Eagle
Ford are remarkably inexpensive and brief; a shale well's breakeven price point is typically in
the range of $30-40, depending on the field, and it is often a matter of weeks between setting up
a rig and pumping first oil.
West Texas Intermediate crude prices were at $52 per barrel on Friday, well above the price
point that would induce shale producers to begin new drilling, analysts say. In addition, Goldman
Sachs raised its outlook for crude oil prices for mid-2017, predicting WTI prices at $57.50 by
the second quarter. Goldman cited the recent OPEC and non-OPEC agreements to cut production by
1.6 million barrels per day, and said that it expects compliance with the cut agreement in excess
of 80 percent.
However, assuming that the OPEC agreement holds and that competitors do not raise output to
offset it, a price of $57.50 is still below the level at which many offshore projects become
competitive, says Wood Mackenzie. In July, the firm found that only 20 percent of deep- and
ultra-deepwater projects at the pre-FID stage are commercially viable at $60 per barrel
suggesting that offshore activity may remain quiet until prices rise further."
"... What's shocking about that chart AlexS is that even with the sharp price increases of oil between 2000 and 2014, the oil R/P ratio has still steadily declined. With investment having been crushed in the last few years, looks like we are facing a Seneca cliff. ..."
The situation with global natural gas is different.
1) There is significant spare capacity in a number of countries. For
example, Russia has reduced gas production in the past few years due to
falling demand from Europe, but can easily increase it if demand returns.
2) There are significant developed and undeveloped proven reserves.
Reserves/production ratio is much higher for natural gas (see the chart
below).
3) Natural gas resources are generally explored less than oil. Potential
for increase in proven reserves is much bigger for natural gas.
The countries and regions with significant resource potential and able to
sharply increase production include: Iran, U.S., Russia, East Mediteranean,
several countries in Asia (including China).
Several countries in Africa are not producing at full potential.
Global proven reserves / production ratio for oil and natural gas
source: BP Statistical Review of World Energy 2016
What's shocking about that chart AlexS is that even with the sharp price
increases of oil between 2000 and 2014, the oil R/P ratio has still
steadily declined. With investment having been crushed in the last few
years, looks like we are facing a Seneca cliff.
The chart is named "Annual conventional oil and gas volumes discovered".
Onshore Canada production is dominated by oil sands; US lower-48 onshore
by tight oil.
Conventional output in both cases is from mature fields; and there were
no major conventional discoveries for many years.
US shallow-water GoM is also a mature province. New discoveries were
made in deepwater GoM.
"... But "bastard neoliberalism" that Trump represents in his internal economic policy probably is not a solution for the nations problems. It is too early to say what will be the level of his deviation from election promises, but judging for his appointments it probably will be considerable -- up to a complete reverse on certain promises. ..."
"... So I view his election as the next logical step (after the first two by Bush II and Obama) toward military dictatorship. Previous forms of "Inverted totalitarism" -- a neoliberal version of Bolshevism (or, more correctly, Trotskyism -- many neocons were actually former Trotskyites ) seems to stop working. Neoliberal ideology was discredited in 2008. All three: Bolshevism, Trotskyism and neoliberalism might also be viewed as just different flavors of Corporatism. ..."
"... After 2008 crisis, neoliberalism in the USA continues to exist in zombie state: as a non-dead dead, so it will be inevitably replaced by something else. Much like Bolshevism after 1945. How soon it will happen and what will be the actual trigger (the next oil crisis which turns into another round of Great Recession?) and what will be the successor is anybody guess. Bolshevism in the USSR lasted till 1991 or 46 years. The victory on neoliberalism in the Cold War was in 1991 so if we add 50 years then 2041 might be the date. ..."
I think the shift from New Deal Capitalism to neoliberalism proved to be fatal for the form
of democracy that used to exist in the USA (never perfect, and never for the plebs).
Neoliberalism as a strange combination of socialism for the rich and feudalism for the poor
is anathema for democracy even for the narrow strata of the US society who used to have a say
in the political process. Like Bolshevism was dictatorship of nomenklatura under the slogan of
"Proletarians of all countries, unite!", neoliberalism is more like dictatorship of financial
oligarchy under the slogan "The financial elite of all countries, unite!")
In this sense Trump is just the logical end of the process that started in 1980 with Reagan,
or even earlier with Carter.
And at the same time [he is] the symptom of the crisis of the system, as large swats of population
this time voted against status quo and that created the revolutionary situation when the elite
was unable to govern in the old fashion. That's why, I think, Hillary lost and Trump won.
But "bastard neoliberalism" that Trump represents in his internal economic policy probably
is not a solution for the nations problems. It is too early to say what will be the level of his
deviation from election promises, but judging for his appointments it probably will be considerable
-- up to a complete reverse on certain promises.
So I view his election as the next logical step (after the first two by Bush II and Obama)
toward military dictatorship. Previous forms of "Inverted totalitarism" -- a neoliberal version
of Bolshevism (or, more correctly, Trotskyism -- many neocons were actually former Trotskyites
) seems to stop working. Neoliberal ideology was discredited in 2008. All three: Bolshevism, Trotskyism
and neoliberalism might also be viewed as just different flavors of Corporatism.
After 2008 crisis, neoliberalism in the USA continues to exist in zombie state: as a non-dead
dead, so it will be inevitably replaced by something else. Much like Bolshevism after 1945. How
soon it will happen and what will be the actual trigger (the next oil crisis which turns into
another round of Great Recession?) and what will be the successor is anybody guess. Bolshevism
in the USSR lasted till 1991 or 46 years. The victory on neoliberalism in the Cold War was in
1991 so if we add 50 years then 2041 might be the date.
And the slide toward military dictatorship does not necessary need to take a form of junta,
which takes power via coup d'ιtat. The control of the government by three letter agencies ("national
security state") seems to be sufficient, can be accomplished by stealth, and might well be viewed
as a form of military dictatorship too. So it can be a gradual slide: phase I, II, III, etc.
The problem here as with Brezhnev socialism in the USSR is the growing level of degeneration
of elite and the growth of influence of deep state, which includes at its core three letter agencies.
As Michail Gorbachev famously said about neoliberal revolution in the USSR "the process already
started in full force". He just did not understand at this point that he already completely lost
control over neoliberal "Perestroika" of the USSR. https://en.wikipedia.org/wiki/Perestroika
In a way, the US Presidents are now more and more ceremonial figures that help to maintain
the illusion of the legitimacy of the system. Obama is probably the current pinnacle of this process
(which is reflected in one of his nicknames -- "teleprompter" http://www.huffingtonpost.com/2012/08/22/obama-photo-caption-contest-teleprompter_n_1821154.html)
.
You probably could elect a dog instead of Trump and the US foreign policy will stay exactly
the same. This hissy fits about Russians that deep state gave Trump before December 19, might
be viewed as a warning as for any potential changes in foreign policy.
As we saw with foreign policy none of recent presidents really fully control it. They still
are important players, but the question is whether they are still dominant players. My impression
is that it is already by-and-large defined and implemented by the deep state. Sometimes dragging
the President forcefully into the desirable course of actions.
"... One bankruptcy attorney told the Detroit Metro Times he had as many as 30 cases in 2015 tied to debt from the UIA; before the automated system was implemented, he said he would typically have at most one per year with such claims. The newspaper also found claimants who were charged with fraud despite never having received a single dollar in unemployment insurance benefits. ..."
"... A pair of lawsuits were filed in 2015 against the UIA over Midas. According to a pending federal case, in which the state revealed it had discontinued using Midas for fraud determinations, the system "resulted in countless unemployment insurance claimants being accused of fraud even though they did nothing wrong". ..."
"... Blanchard told the Guardian in February that many unemployment applicants may not have realized they were even eligible to appeal against the fraud charge, due to the setup of Midas. Attorneys representing claimants have said that many refuse to ever apply for unemployment benefits again. ..."
"... Levin, who represents part of metropolitan Detroit, said in his statement that Michigan officials had to fully account for the money that has flowed into the unemployment agency's contingent fund. ..."
Michigan government
agency wrongly accused individuals in at least 20,000 cases of fraudulently seeking unemployment
payments, according to a review by the state.
The review released this week found that an automated system had erroneously accused claimants
in 93% of cases a rate that stunned even lawyers suing the state over the computer system and faulty
fraud claims.
"It's literally balancing the books on the backs of Michigan's poorest and jobless," attorney
David Blanchard, who is pursuing a class action in federal court on behalf of several claimants,
told the Guardian on Friday.
The
Michigan unemployment insurance agency (UIA) reviewed 22,427 cases in which an automated computer
system determined a claimant had committed insurance fraud, after federal officials, including the
Michigan congressman Sander Levin, raised concerns with the system.
The review found that the overwhelming majority of claims over a two-year period between October
2013 and August 2015 were in error. In 2015, the state revised its policy and required fraud determinations
to be reviewed and issued by employees. But the new data is the first indication of just how widespread
the improper accusations were during that period .
The people accused lost access to unemployment payments, and reported facing fines as high as
$100,000. Those who appealed against the fines fought the claims in lengthy administrative hearings.
And some had their federal and state taxes garnished. Kevin Grifka, an electrician who lives
in metro Detroit, had his entire federal income tax garnished by the UIA, after it accused him of
fraudulently collecting $12,000 in unemployment benefits.
The notice came just weeks before Christmas in 2014.
"To be honest with you, it was really hard to see your wife in tears around Christmas time, when
all of this went on for me," Grifka said.
The computer system claimed that he had failed to accurately represent his income over a 13-week
period. But the system was wrong: Grifka, 39, had not committed insurance fraud.
In a statement issued on Friday, Levin called on state officials to review the remaining fraud
cases that were generated by the system before the policy revision.
"While I'm pleased that a small subset of the cases has been reviewed, the state has a responsibility
to look at the additional 30,000 fraud determinations made during this same time period," he said.
Figures released by the state show 2,571 individuals have been repaid a total of $5.4m. It's unclear
if multiple cases were filed against the same claimants.
The findings come as Michigan's Republican-led legislature passed a bill this week to use
$10m from the unemployment agency's contingent fund which is composed mostly of fines generated
by fraud claims to balance the state's budget. Since 2011, the balance of the contingent fund has
jumped from $3.1m to $155m, according to
a report from a Michigan house agency.
The system, known as the Michigan Integrated Data Automated System (Midas), caused an immediate
spike in claims of fraud when it was implemented in October 2013 under the state's Republican governor,
Rick Snyder, at a cost of $47m.
In the run-up to a scathing report on the system issued last year by Michigan's auditor general,
the UIA began requiring employees to review the fraud determinations before they were issued.
The fraud accusations can carry an emotional burden for claimants.
"These accusations [have] a pretty big burden on people," Grifka said. While he said the new findings
were validating and his own case had been resolved, he called for state accountability.
"There's no recourse from the state on what they're doing to people's lives. That's my biggest
problem with all of this."
Steve Gray, director of the University of Michigan law school's unemployment insurance clinic,
told the Guardian earlier this year that he routinely came across claimants facing a significant
emotional toll. As a result, he said, the clinic added the number for a suicide hotline to a referral
resource page on the program's website.
"We had just a number of clients who were so desperate, saying that they were going to lose their
house they've never been unemployed before, they didn't know," said Gray, who filed a complaint
with the US labor department in 2015 about the Midas system.
The fines can be enormous. Residents interviewed by local news outlets have highlighted fraud
penalties from the UIA
upwards of $100,000 . Bankruptcy petitions filed as a result of unemployment insurance fraud
also increased during the timeframe when Midas was in use.
One bankruptcy attorney
told the Detroit Metro Times he had as many as 30 cases in 2015 tied to debt from the UIA; before
the automated system was implemented, he said he would typically have at most one per year with such
claims. The newspaper also found claimants who were charged with fraud despite never having received
a single dollar in unemployment insurance benefits.
A pair of lawsuits were filed in 2015 against the UIA over Midas. According to a pending federal
case, in which the state revealed it had discontinued using Midas for fraud determinations, the system
"resulted in countless unemployment insurance claimants being accused of fraud even though they did
nothing wrong".
Blanchard told the Guardian in February that many unemployment applicants may not have realized
they were even eligible to appeal against the fraud charge, due to the setup of Midas. Attorneys
representing claimants have said that many refuse to ever apply for unemployment benefits again.
A spokesman for the unemployment insurance agency, Dave Murray, said it appreciated Levin's work
on the issue and said it was continuing "to study fraud determinations".
The agency had already made changes to the fraud determination process, he said, and "we appreciate
that the state legislature this week approved a bill that codifies the reforms we've set in place".
Levin, who represents part of metropolitan Detroit, said in his statement that Michigan officials
had to fully account for the money that has flowed into the unemployment agency's contingent fund.
"While I am pleased that $5m has been repaid, it strikes me as small compared to the amount of
money that was collected at the time," he said. "Only a full audit will ensure the public that the
problem has been fully rectified."
ManuSHeloma 12 Feb 2016 9:02
Another failure of Gov Snyder's administration: first Flint water, now this. What can the people
of Michigan expect next? The recall of Snyder should be automated.
stuinmichigan pepspotbib 12 Feb 2016 10:02
It's not just Snyder and his lackies. You should see the radically gerrymanderd Michigan legislature,
run by rightist extremists, directed by the Koch Brothers, the DeVos family and others, via the
ALEC program that provides them with the radical right legislation they have passed and continue
to pass. Snyder ran saying that sort of stuff was not really on his agenda, but continues to sign
it. He's either a liar, an unprincipled idiot, or both. It's bad here. And it's getting worse.
DarthPutinbot 12 Feb 2016 9:09
What the f*ck is wrong in Michigan? Split it up among the surrounding states and call it good.
Michigan destroyed Detroit and cutoff their water. Michigan deliberately poisoned the residents
of Flint. Too many Michigan lawyers are crooks or basically inept. The court system screws over
parents in divorce cases. And now, Michigan is wrongly trying to collect money from people on
trumped up fraud charges. Stop it. The federal government needs to take over the state or bust
it up.
Non de Plume 12 Feb 2016 9:23
Hell, when the system *works* it's ridiculous. Watching my Dad - who had worked continuously since
14 years old save a few months in the early 90s - sitting on hold for hours... At least once a
week, to 'prove' he still deserved money from a system he paid into. Hours is not an exaggeration.
And now this. Goddammit Lansing! How many other ways can you try to save/take money from the
poor and end up costing us so much more?!?
Bailey Wilkins stuinmichigan 12 Feb 2016 21:56
Nothing against The Guardian's reporting, but if you follow the links, you'll see FOX 17 has been
covering the story locally since last May. It's their investigation that got the attention of
all the other publications (including Detroit Metro Times.) Local papers could have done a better
job though, agreed on that.
talenttruth 12 Feb 2016 12:48
Leering, Entitled Republican bastards like Governor Snyder simply HATE poor people. And THAT is
because all such bullies are cowards, through-and-through, always selecting as their "victims"
those who can't fight back. And, since such Puritan Cretins as Snyder "Believe" that they are
rich because of their superior merit, it stands to reason (doesn't it) that "poor people" (actually,
all us Little Folk) have NO merit, because we didn't inherit a Trust Fund, Daddy's Business or
other anciently stolen wealth. These people deserve stunningly BAD Karma. Unfortunately, Karma
has its own timeline and doesn't do what seems just, on a timely basis (usually).
Jim Uicker 12 Feb 2016 13:29
With today's sophisticated algorithms, computers are used to flag insurance claims all the time.
The hit rate is usually much better than 8%. But how can they even consider automating the adjudication
of fraud? Fraud is a crime; there should be a presumption of innocence and a right to due process.
Without telling people they had a right to appeal, didn't this system violate the constitutional
rights of Michigan's most vulnerable citizens: those with no job and therefore no money to defend
themselves?
And what about the employers who paid unemployment insurance premiums month after month, expecting
the system to protect their employees from business conditions that would necessitate layoffs?
Michigan has defrauded them as well, by collecting premiums and not paying claims.
Jim Uicker 12 Feb 2016 13:51
Even if the problem with Midas can be entirely blamed on the tech workers who built and tested
the software, there is no excuse for the behavior of the Snyder administration when they became
aware of the problem. Just like the cases of legionnaires disease, where the state failed to alert
the public about the outbreak and four more people died, the Snyder administration is again trying
to sweep its mistakes under the rug.
Before taking Midas offline, the UIA refused to comment on the Metro Times investigation, and
Snyder himself artfully avoided reporters' questions after being made aware of the result of an
investigation by a local television station. Now the state only revealed that it shut down Midas
to a pending lawsuit.
The state spent $47 million dollars on a computer system and then took it offline because it
didn't work. The flaws in the system are now costing the state many millions more. This level
of secrecy is evidence of bad government. The state is supposed to be accountable to taxpayers
for that money! Even if the Snyder administration isn't responsible for all of these tragedies,
it is definitely responsible for covering them up.
Jefferson78759 12 Feb 2016 13:55
This is the GOP "governing"; treat the average person like a criminal, "save" money on essential
infrastructure like water treatment, regardless of the consequences.
I get why the 1% votes GOP but if you're an average person you're putting your financial and
physical well being on the line if you do. Crazy.
MaryLee Sutton Henry 12 Feb 2016 22:30
I was forced to plead guilty by a public defender to the UIA fraud charge & thrown in jail for
4 days without my Diabetic meds or diet in Allegan county. As it stands right now the State of
Michigan keeps sending me bills that are almost $1000 more then what the county says I own. I
have done community service, and between witholding tax refunds and payments I have paid over
$1200 on a $4300 total bill. I have literally spend hours on the phone with UIA and faxing judgements
trying to straighten this out, yet still get bills for the higher amount from UIA. Its a nightmare,
I have a misdominer, until its paid and refuse to pay no more then $50 per month until they straighten
this out. Maybe joining the class action law suit would help. Does anyone have any better ideas??
Teri Roy 13 Feb 2016 13:27
My son and I both got hit, I was able to dispute mine but he has autism and they would not dismiss
his, so at 24 yrs old he's paying back 20 grand in pentailies and interest. Just not right
Outragously Flawless 14 Feb 2016 9:42
I also received a letter stating I owe and hadn't file taxes since 2007. I had to find all of
my taxes from 2007 to 2013 my question is why did they wait over 5yrs to contact me, or is that
the set up H&R block does my taxes and they didn't have records that far back.#sneakyass government
"... The New Keynesian agenda is the child of the neoclassical synthesis and, like the IS-LM model before it, New Keynesian economics inherits the mistakes of the bastard Keynesians. It misses two key Keynesian concepts: (1) there are multiple equilibrium unemployment rates and (2) beliefs are fundamental. My work brings these concepts back to center stage and integrates the Keynes of the General Theory with the microeconomics of general equilibrium theory in a new way. " ..."
" To complete the reconciliation of Keynesian economics
with general equilibrium theory, Paul Samuelson introduced
the neoclassical synthesis in 1955...
... In this view of the world, high unemployment is a
temporary phenomenon caused by the slow adjustment of money
wages and money prices. In Samuelson's vision, the economy is
Keynesian in the short run, when some wages and prices are
sticky. It is classical in the long run when all wages and
prices have had time to adjust....
... Although Samuelson's neoclassical synthesis was tidy,
it did not have much to do with the vision of the General
Theory...
... In Keynes' vision, there is no tendency for the
economy to self-correct. Left to itself, a market economy may
never recover from a depression and the unemployment rate may
remain too high forever. In contrast, in Samuelson's
neoclassical synthesis, unemployment causes money wages and
prices to fall. As the money wage and the money price fall,
aggregate demand rises and full employment is restored, even
if government takes no corrective action. By slipping wage
and price adjustment into his theory, Samuelson reintroduced
classical ideas by the back door-a sleight of hand that did
not go unnoticed by Keynes' contemporaries in Cambridge,
England. Famously, Joan Robinson referred to Samuelson's
approach as 'bastard Keynesianism.'
The New Keynesian agenda is the child of the
neoclassical synthesis and, like the IS-LM model before it,
New Keynesian economics inherits the mistakes of the bastard
Keynesians. It misses two key Keynesian concepts: (1) there
are multiple equilibrium unemployment rates and (2) beliefs
are fundamental. My work brings these concepts back to
center stage and integrates the Keynes of the General Theory
with the microeconomics of general equilibrium theory in a
new way. "
You could meanwhile contemplate Farmer's point that Samuelson
and his MIT colleagues "bastardized" Keynes' views when they
introduced them to the US.
" By slipping wage and price
adjustment into his theory, Samuelson reintroduced classical
ideas by the back door-a sleight of hand that did not go
unnoticed by Keynes' contemporaries in Cambridge, England.
Famously, Joan Robinson referred to Samuelson's approach as
'bastard Keynesianism."
And then you might contemplate Samuelson's (and MIT
colleagues) influence on Krugman, Blanchard, Summers and all
the well-publicized mainstream economists.
By slipping wage and price adjustment into his theory,
Samuelson reintroduced classical ideas by the back door-a
sleight of hand that did not go unnoticed by Keynes'
contemporaries in Cambridge, England. Famously, Joan Robinson
referred to Samuelson's approach as 'bastard Keynesianism'.
-- Roger Farmer
[ A fine place to start thinking. I knew this before and
read this again today, but did not think about the argument.
You might also wonder how it could happen that those "bastard
Keynesians", the ones who distorted Keynes' message, came to
be the ones who are well publicized, rather than more
accurate interpreters.
I think that is a good discussion. I also think the major
weakness of both Keynes and Marx is that they underestimated
the power and resilience of finance. They both thought logic
dictated the "euthanasia of the rentier", while we are seeing
the rentier growing ever stronger.
It's always with great diffidence that I write about
macroeconomics. Although I'm in good company in being
sceptical about much of macro (see this roundup from Bruegel
and this view from Noah Smith, for instance), I'm all too
well aware of the limits of my knowledge. So with that
warning, here's what I made of Roger Farmer's very
interesting new book, Prosperity for All: How To Prevent
Financial Crises....
"... Republican leaders in Congress are already sending Trump a subtle but clear warning: accept our business-as-usual Chamber of Commerce agenda or we will join Democrats to impeach you. ..."
"... Impeachment has been the goal of Democrats since the day after Trump won the election, and the Republican establishment will use the veiled threat as leverage to win concession after concession from the Trump White House. ..."
"... There are at least four Trump campaign promises which, if not dropped or severely compromised, could generate Republican support for impeachment: Trump's Supreme Court appointments, abandoning the Trans Pacific Partnership, radical rollback of Obama regulatory projects, and real enforcement of our nation's immigration laws. ..."
"... On regulatory rollback, Congress can legitimately insist on negotiating the details with Trump. But on the other three, immigration, the TPP, and Supreme Court nominees, Trump's campaign promises were so specific - and so popular - that he need not accept congressional foot-dragging. ..."
"... Senate Republican leader Mitch McConnell announced this week he will oppose Trump's tax reforms. Senator Lindsey Graham is joining Democrats in sponsoring new legislation to protect the "Dreamers" from deportation after their unlawfully granted legal status and work permits expire. Senator Susan Collins will oppose any restrictions on Muslim refugees, no matter how weak and inadequate the vetting to weed out jihadists. Senator Lamar Alexander aims to protect major parts of Obamacare, despite five years of voluminous Republican promises to "repeal and replace" it if they ever had the power to do so. ..."
"... on the House side, we have the naysayer-in-chief, Speaker Paul Ryan, who refused to campaign with Donald Trump in Wisconsin, and who has vowed to obstruct Trump's most important and most popular campaign promise - an end to open borders and vigorous immigration law enforcement. ..."
"... Donald Trump won a electoral mandate to change direction and put American interests first, beginning with border security. If the congressional Republican establishment chooses to block the implementation of that electoral mandate, it would destroy not only Trump's agenda, it would destroy the Republican Party. ..."
Several months ago I was asked what advice I would give to the Trump campaign.
I said, only half joking, that he had better pick a vice presidential candidate the establishment
hates more than it hates him. That would be his only insurance against impeachment. Those drums have
already begun to beat, be it ever so subtly.
Is anyone surprised how quickly the establishment that Donald Trump campaigned against has announced
opposition to much of his policy agenda? No. But few understand that the passionate opposition includes
a willingness to impeach and remove President Trump if he does not come to heel on his America First
goals.
Ferocious opposition to Trump from the left was expected and thus surprises nobody. From the comical
demands for vote recounts to street protests by roving bands of leftist hate-mongers and condescending
satire on late-night television, hysterical leftist opposition to Trump is now part of the cultural
landscape.
But those are amusing sideshows to the main event, the Republican establishment's intransigent
opposition to key pillars of the Republican president's agenda.
Republican leaders in Congress are already sending Trump a subtle but clear warning: accept our
business-as-usual Chamber of Commerce agenda or we will join Democrats to impeach you.
If you think talk of impeachment is insane when the man has not even been sworn into office yet,
you have not been paying attention. Impeachment has been the goal of Democrats since the day after
Trump won the election, and the Republican establishment will use the veiled threat as leverage to
win concession after concession from the Trump White House.
What are the key policy differences that motivate congressional opposition to the Trump agenda?
There are at least four Trump campaign promises which, if not dropped or severely compromised, could
generate Republican support for impeachment: Trump's Supreme Court appointments, abandoning the Trans
Pacific Partnership, radical rollback of Obama regulatory projects, and real enforcement of our nation's
immigration laws.
On regulatory rollback, Congress can legitimately insist on negotiating the details with Trump.
But on the other three, immigration, the TPP, and Supreme Court nominees, Trump's campaign promises
were so specific - and so popular - that he need not accept congressional foot-dragging.
Yet, while the President-elect 's transition teams at the EPA, State Department and Education
Department are busy mapping ambitious changes in direction, Congress's Republican leadership is busy
doubling down on dissonance and disloyalty.
Senate Republican leader Mitch McConnell announced this week he will oppose Trump's tax reforms.
Senator Lindsey Graham is joining Democrats in sponsoring new legislation to protect the "Dreamers"
from deportation after their unlawfully granted legal status and work permits expire. Senator Susan
Collins will oppose any restrictions on Muslim refugees, no matter how weak and inadequate the vetting
to weed out jihadists. Senator Lamar Alexander aims to protect major parts of Obamacare, despite
five years of voluminous Republican promises to "repeal and replace" it if they ever had the power
to do so.
And then, on the House side, we have the naysayer-in-chief, Speaker Paul Ryan, who refused to
campaign with Donald Trump in Wisconsin, and who has vowed to obstruct Trump's most important and
most popular campaign promise - an end to open borders and vigorous immigration law enforcement.
It is no exaggeration to say that Trump's success or failure in overcoming the opposition to immigration
enforcement will determine the success or failure of his presidency. If he cannot deliver on his
most prominent and most popular campaign promise, nothing else will matter very much.
So, the bad news for President Trump is this: If he keeps faith with his campaign promises on
immigration, for example to limit Muslim immigration from terrorism afflicted regions, which is within
his legitimate constitutional powers as President, he will risk impeachment. However, his congressional
critics will face one enormous hurdle in bringing impeachment charges related to immigration enforcement:
about 90 percent of what Trump plans to do is within current law and would require no new legislation
in Congress. Obama disregarded immigration laws he did not like, so all Trump has to do is enforce
those laws.
Now, if you think talk of impeachment is ridiculous because Republicans control Congress, you
are underestimating the depth of Establishment Republican support for open borders.
The first effort in the 21st century at a general amnesty for all 20 million illegal aliens came
in January 2005 from newly re-elected President George Bush. The "Gang of Eight" amnesty bill passed
by the US Senate in 2013 did not have the support of the majority of Republican senators, and now
they are faced with a Republican president pledged to the exact opposite agenda, immigration enforcement.
And yet, do not doubt the establishment will sacrifice a Republican president to protect the globalist,
open borders status quo.
The leader and spokesman for that establishment open borders agenda is not some obscure backbencher,
it is the Republican Speaker of the House. Because the Speaker controls the rules and the legislative
calendar, if he chooses to play hardball against Trump on immigration he can block any of Trump's
other policy initiatives until Trump abandons his immigration enforcement goals.
What all this points to is a bloody civil war within the Republican Party fought on the battlefield
of congressional committee votes.
Donald Trump won a electoral mandate to change direction and put American interests first, beginning
with border security. If the congressional Republican establishment chooses to block the implementation
of that electoral mandate, it would destroy not only Trump's agenda, it would destroy the Republican
Party.
"... "Earlier this week, I met separately with FBI [Director] James Comey and DNI Jim Clapper, and there is strong consensus among us on the scope, nature, and intent of Russian interference in our presidential election," the message said, according to officials who have seen it. ..."
"... Comment: The FBI now flip-flops from its previous assessment: FBI rejects CIA assessment that Russia influenced presidential election ..."
FBI and National Intelligence chiefs both agree with the CIA assessment that Russia interfered with
the 2016 US presidential elections partly in an effort to help Donald Trump win the White House,
US media report.
FBI Director James B. Comey and Director of National Intelligence James R. Clapper are both convinced
that Russia was behind cyberattacks that targeted Democratic presidential candidate Hillary Clinton
and her campaign chairman, John Podesta,
The Washington Post and reported Friday, citing a message sent by CIA Director John Brennan
to his employees.
"Earlier this week, I met separately with FBI [Director] James Comey and DNI Jim Clapper,
and there is strong consensus among us on the scope, nature, and intent of Russian interference in
our presidential election," the message said, according to officials who have seen it.
"The three of us also agree that our organizations, along with others, need to focus on completing
the thorough review of this issue that has been directed by President Obama and which is being led
by the DNI," it continued.
"... Brother Feltner is right. Corporations are moving offshore to cut their wage bills. But they are not using that money to reinvest in their companies to improve the product and train the workforce. Instead, they are offshoring to gain cash flow to finance their fix. They want more stock buybacks which in turn enrich top executives and Wall Street investors. Automation and technology have nothing to do with this perilous addiction. ..."
"... emissions ..."
"... "The Anti-Corn Law League was a successful political movement in Great Britain aimed at the abolition of the unpopular Corn Laws, which protected landowners' interests by levying taxes on imported wheat, thus raising the price of bread at a time when factory-owners were trying to cut wages to be internationally competitive." ..."
"... Our backwards free fall from stable middle class growth and access and attainment to higher education has been precipitated and pushed by a broadcasting system and cyber platforms that have excluded the VOICE OF WORKERS ever since the first newspaper carried a BUSINESS section with no ..."
"... from being forced to compete against cheaper off-shore or south-of-the-border slave labor that formed the same COMPETITIVE ADVANTAGE now taken for granted when a subsidized start-up like NIKE decides to pursue a business model that relentlessly exploits North American running shoe and sports wear market needs by cheaply manufacturing such products off-shore via contracting agents exploiting captive Indonesian (substitute other Latin American, African or Asian ENTERPRISE aka FREE TRADE ZONES) slave laborers. ..."
"... If we aren't worth hiring at a sustainable SOCIALLY CONTRACTED WAGE aimed at developing our national resources, we should reject buying from such nationally suicidal business models and corporate LLC fictions even if they can pay-2-play legislation that removes the PROTECTIONS. We vow to never sacrifice NATIONAL SECURITY, so why have we allowed the PRIVATIZATION of our NATIONAL SECURITY STATE by corporate legal fictions? A revealing if not all-encompassing historical answer to that question is another corporate-captured and regulatory-captured Mass Media Taboo discussed one time to my knowledge on the PEOPLE'S AIRWAVES. Search Bill Moyers panel discussing the LEWIS POWELL MEMO TO THE NATIONAL CHAMBER OF COMMERCE and the Nixon appointment of LEWIS POWELL to the Supreme Court, despite his total lack of judicial experience. ..."
"... {Creative Commons Copyright} Mitch Ritter Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion List ..."
American manufacturers have chosen a different path. Their CEOs grow wealthy by financially strip-mining
their own companies, aided and abetted by elite financiers who have only one goal: extracting as
much wealth as possible from the company while putting back as little as possible into production
and workers.
The heroin driving their addiction is stock buybacks-a company using its own profits (or borrowed
money) to buy back the company's own shares. This directly adds more wealth to the super-rich because
stock buybacks inevitably increase the value of the shares owned by top executives and rich investors.
Since top executives receive the vast majority of their income (often up to 95%) through stock incentives,
stock buybacks are pure gold. The stock price goes up and the CEOs get richer. In this they are in
harmony with top Wall Street private equity/hedge fund investors who incessantly clamor for more
stock buybacks, impatient for their next fix.
For the few, this addiction is the path to vast riches. It also is the path to annihilating the
manufacturing sector. (For a definitive yet accessible account see "
Profits without Prosperity
" by William Lazonick in the Harvard Business Review .)
Wait, wait, isn't this stock manipulation? Well, before the Reagan administration deregulated
them in 1982, stock buybacks indeed were considered stock manipulation and one of the causes of the
1929 crash. Now they are so ubiquitous that upwards of 75% of all corporate profits go to stock buybacks.
Over the last year, 37 companies in the S&P 500 actually spent more on buybacks than they generated
in profits, according to
Buyback
Quarterly .
Little wonder that stock buybacks are a major driver of
runaway inequality . In 1980 before the
stock buyback era, the ratio of compensation between the top 100 CEOs and the average worker was
45 to 1. Today it is a whopping 844 to 1. (The German CEO gap is closer to 150 to 1.)
Germany holds down its wage gap, in part, by discouraging stock buybacks. Through its system of
co-determination, workers and their unions have seats on the boards of directors and make sure profits
are used to invest in productive employment. As a result, in Germany stock buybacks account for a
much smaller percentage of corporate profits.
Between 2000 and 2015, 419 U.S. companies (on the S&P 500 index) spent a total of $4.7 trillion
on stock buybacks (annual average of $701 million per firm). During the same period, only 33 German
firms in the S&P350 Europe index conducted buybacks for a total of $111 billion (annual average of
$211 million per firm). (Many thanks to Mustafa Erdem Sakinη from the
Academic-Industry Research Network for
providing this excellent data.)
Let's do the math: U.S. firms as a whole spent 42 times more on stock buybacks than German firms!
Little wonder that our manufacturing sector is a withering appendage of Wall Street, while German
manufacturing leads the global economy.
So why does the media consistently use automation/technology to explain the loss of well-paying
manufacturing jobs?
To be fair, Poppy is not alone. Virtually every elite broadcaster, journalist, pundit and columnist
claims that the loss of good-paying, blue-collar jobs is somehow connected to new technologies. How
can they ignore the fact that in Germany advanced technologies and good-paying jobs go hand in hand?
Part of the answer is that it is reassuring for elites to believe that job loss stems from complex
"forces of production" that are far removed from human control. The inevitability of broad economic
trends makes a pundit sound more sophisticated than the unschooled factory worker who thinks the
company is moving to Mexico just because labor costs one-tenth as much.
Technological inevitability also fits neatly into the idea that runaway inequality in our economy
is akin to an act of God, that globalization and technology move forward and no one can stop the
process from anointing winners and losers. The winners-the richest of the rich-are those who have
the skills needed to succeed in the international technological race. The losers-most of the rest
of us without the new skills-see our jobs vaporized by technology and automation.
Too bad. Nothing to be done about it. Stop whining. Move on.
In other words, rising inequality can't be fundamentally altered.
Sinclair's Law of Human Nature
Or maybe there's another explanation suggested by Upton Sinclair's famous adage: "It is difficult
to get a man to understand something, when his salary depends on his not understanding it."
The newscasters, the pundits, the top columnists and recidivist TV commentators-nearly all of
them are doing very well. They may not be billionaires, but they live in a rarefied world far removed
form the worries felt by Mr. Feltner and his brothers and sisters at Rexnord. From their elite vantage
point, the status quo may have problems, but it is treating them remarkably well. So quite naturally
they are drawn to narratives that justify their elite positions; that altering runaway inequality
and its privileges would be futile at best and even harmful to society as a whole. How convenient.
Then again, American media firms are no strangers to stock buybacks. Time Warner, which owns CNN,
Poppy's employer, instituted a $5 billion stock buyback in 2016. That's $5 billion that, for example,
didn't go to news investigations about the perils of stock buybacks. We don't know if Poppy Harlow
receives stock incentives, but her top bosses certainly do.
What about NBC/MSNBC? Comcast is the parent company which also instituted a $5 billion stock buyback
in 2016.
Brother Feltner is right. Corporations are moving offshore to cut their wage bills. But they
are not using that money to reinvest in their companies to improve the product and train the workforce.
Instead, they are offshoring to gain cash flow to finance their fix. They want more stock buybacks
which in turn enrich top executives and Wall Street investors. Automation and technology have nothing
to do with this perilous addiction.
So, I'll stop yelling at Poppy, once she starts covering stock buybacks.
Lambert Strether has been blogging, managing online communities, and doing system administration
24/7 since 2003, in Drupal and WordPress. Besides political economy and the political scene, he blogs
about rhetoric, software engineering, permaculture, history, literature, local politics, international
travel, food, and fixing stuff around the house. The nom de plume "Lambert Strether" comes from Henry
James's The Ambassadors: "Live all you can. It's a mistake not to." You can follow him on Twitter
at @lambertstrether. http://www.correntewire.com
View all posts by
Lambert Strether → John ,
December 18, 2016 at 6:33 am
Now I understand. Companies off-shore their manufacturing because Mexico, as an example, has
the latest in automation and the highest of high technology. Another example of the "Move alone.
Nothing to see here." mantra.
Yes, does moving to Mexico, or China, somehow enable more automation? If you are going to automate,
why not automate in place and forget unnecessary long supply chains.
There's an endless supply of Mexicans that can work cheap, can be trained and who cost far
less than complicated machinery. They also have another utilitarian value: driving down wages
in America.
I'm glad I'm not the only one yelling at the TV ..
;)
"HARLOW: But you agree it won't save all of them, because of automation, because of technology."
SO .does it occur to this reported to ask how many jobs are moving from the US to Mexico? If
so many jobs are lost to automation at this factory, why is it worthwhile to move to Mexico. HOW
MANY jobs lost in the US and HOW MANY jobs gained in Mexico from this plant??? I wouldn't be surprised
that there is a gain in Mexico beyond the number directly moved from Carrier .(extra maintenance,
etc.)
And its a bizarre thing 99% of "news" is in fact "analysis" and they are remarkably wrong
yet NONE of them are ever fired
What Mexico offers for some segments of the steel industry is the ability to bypass emissions
controls. This, much more than labour, is a primary attraction for process industries like
steel/petrochemical, where the goods are all most never touched by human hand.
While it also offers proximity to market that building a similar, high emissions plant further
south into Central/South America (or further west into Asia) can't compete, even with labour cheaper
than Mexico's. Because NAFTA does not require economic impact equivalents, industries with high
costs of compliance will go where there is nothing to comply too.
Environmental regulations in general are lower in the off-shore areas. Those countries are
where we were 50 years ago with polluted air, water, and land. However, as the citizens have better
and more stable lives. they will insist on improved conditions. We are already seeing some of
that start in China and other countries. We had to invent many of the technologies in the 70s-90s,
so those countries will be able to improve their lot much faster if they want to because they
will be able to buy off the shelf technologies.
Countries like China are moving forward with renewable energy, as much because it means clean
air and water, as it does reduced reliance on the cantankerous Middle East and greenhouse gas
emissions. It will be interesting to see what happens when US voters figure out that the goal
of the current Republican party is to return the US environmental condition to a Third World country.
Keep in mind that nearly all of the major environmental laws were signed by Republican presidents.
Every buyback returns cash to the investor who then has to re-invest in something else to
continue getting returns, so to some extent equity buybacks of one company result in new investment
in some other company. To the extent that a company's growth prospects are dim, there are many
many situations in which buybacks make complete sense as that company simply needs less and
less capital for a shrinking industry. So why should they be heavily capitalized with low growth
prospects?
It is still stock manipulation, plain and simple. And the decision to do it is made by the
executives who benefit the most from it. And it was illegal for a good reason, and it was made
legal for another good reason.
If the executives have so much retained earnings that they do not know how to invest them properly
then they are incompetent in their jobs and should be replaced. They should not be allowed to
use corporate funds to manipulate the stock price up to their own benefit.
Even worse, in some cases the company borrows money, at today's low interest rates, to buy back
stock.
When this occurs pervasively, as it has been for some time now in the US, it is a sign of stagnation
of the corporate sector.
@ dwayne, In which class were you "accidentally" born into. Not hard to make a guess is it.
Don't bother with your already anticipated tesponse. Since I know fairwell the answer. The child
of a poor substistance farmer who was made to walk five miles in knee deep snow to learn all that
you now do.
Buy backs are not manipulation any more than increasing the dividend is. In both cases, the
corporation is saying it has more money than it needs, and that that money should be returned
to the company's stockholders, allowing them to choose how that money will be invested instead
of having corporate management do it for them.
The concern over stock buy backs is simply people focusing on part of a larger transaction
instead of seeing the whole thing. It is the difference between micro thinking and macro thinking,
otherwise known as failing to see the bigger picture.
Benedict you are spot on. Sounds like a lot of the other responders are either bitter shorts
that have been burned by buybacks just generally shallow thinkers. They will be giving their same
economically baseless arguments for the rest of their lives unless they learn to open their minds.
Those who are arguing for a dividend instead of a buyback are making a foolish argument as
if a significant dividend increase wouldn't see a significant rise in the stock and hence a similar
effect as a buyback. Of course a dividend increase would see a significant rise in the stock price
just like the buyback.
As to those whining about workers at-risk and executives with pay tied to the stock price
they mention nothing about the fact that workers risked no capital and can head for the door whenever
they like, and that executives risked having part of their pay go to $0 in the event of an industry
or economic downturn, and locked them into staying at that company for a period of time (if they
leave, their options get taken away). The risk profile of a salaried worker and an executive are
far different and hence their economic outcomes are rightfully different depending on the financial
performance of a company.
. . . Of course a dividend increase would see a significant rise in the stock price just
like the buyback.
Why is that almost never the option taken?
As to those whining about workers at-risk and executives with pay tied to the stock price
they mention nothing about the fact that workers risked no capital and can head for the door
whenever they like, and that executives risked having part of their pay go to $0 in the event
of an industry or economic downturn . . .
In the event of an industry or economic downturn those workers risk all of their pay going
to $0
Your argument reminds me that a rich person has just as much right to sleep under the bridge
on a freezing night as the poor person.
Executives of publicly traded companies are not the owners, but act with impunity as if they
are, and they risked no capital either.
Do you guys live in the real world? The company hires (from among their friends) a CEO, COO,
whatever. These people are "granted stock options" ok, those stocks don't even exist so basically
they just dilute the holdings of everybody who was working there. After a few years they "cash
out" where money comes from basically the worker's pockets.
How's that for "shallow thinking"?
> that executives risked having part of their pay go to $0 in the event of an industry or economic
downturn, and locked them into staying at that company for a period of time (if they leave, their
options get taken away).
Sigh. How many links can NakCap readers come up with that shows that this is exactly what *doesn't*
happen. Lemme guess, Dwayne, economic major?
Why do share buy backs if growth prospects are dim?
Why not return the money as a special dividend or pay down debt?
I'd like to see share buyback proposal prefaced with a statement such as:
"We scoured the world looking for a suitable investment for our excess cash, there was no additional
business enhancing technology we could justify purchasing, no additional R&D into product development
we could justify, no additional investment in plant or equipment upgrades we could justify, no
additional training for our employees we could justify, no prepayment of debt we could justify,
no funding of university research we could justify."
"We don't see a way to use our excess cash to grow/improve our business".
"Surprisingly, from the global list of corporate securities we could find no financial security
that is at a more attractive price level than our own stock."
"So we are buying back our company's stock."
"Take our word for it, it will be a great investment for the future."
"Note: our senior executives will be exercising options but not holding onto their option purchased
stock."
"Personal financial diversification is important to them."
Excuse me, but isn't one of the main factors driving the buybacks contractual executive bonus
payouts?
As in, if the stock price increases by X%, the CEO gets a maximum bonus Y. The people in the
finance wing of these companies are simply solving for how many stocks they need to buyback in
order to achieve X. Because they can spend other people's money to meet that goal, there is no
technical or legal barrier to them doing this.
So, since we can't mandate more ethical and longer term thinking people become CEO's, can't
we put a rule into place that no one in the organization performing the buyback is allowed to
benefit from a buyback directly? That would make a buyback more like an option of last resort.
Which is what it should be, given how corrosive it is to future development of a company.
" Stock buybacks inevitably increase the value of the shares owned by top executives and
rich investors. "
While this is true as far as it goes, buybacks increase the value of ALL shares - including
the roughly one quarter of outstanding shares owned by pension plans.
Pension plans are an important asset of the middle class. Cut their investment returns, and
real people take a hit.
Jim's argument also applies to 401k and other defined-contribution plans, of course. You do
still have a point, though a lot of people who are eligible for such plans can't contribute
to them because they don't have any surplus income to stash away which is, of course, because
wages are too low .
It's called "talking one's book," and working whenever possible to keep the flow of discourse
going in the direction that supports one's wealth and interests
Goosing investment returns in the short term with buybacks to benefit stock-option insiders,
at the expense of underinvestment in productive measures like R&D and training, eventually leads
to corporate decline which does no favors for the few middle class people who still have pensions.
Buybacks increase the price of shares of stock, not the value. If a pension plan owns stock
which has been inflated by buy-backs, the dividends paid to the pension plan won't increase. The
only way that the pension plan can benefit is by selling the stock. Then the pension plan will
need to use the proceeds of the sale to buy something else. But if most companies are inflating
the price of their stocks with buy-backs, how does the pension plan find an appropriate stock
to buy? If they buy another inflated stock, the value of the pension plan is in the same place
as it was before it sold the previous stock.
It seems to me that buy-backs just cause a bubble. Short term "investors" such as executives
can benefit from the bubble, but long term investors such as pension plans aren't able to benefit
in that way.
It's a huge problem of principle agent. The other is that every dollar used to buy back for
the company is then one less available for capital costs, R&D, employee training, etc.
The overwhelming majority of the gains to investors will go to the wealthy as well. Workers
get nothing and often worse than nothing when their job security is under attack.
Things were a lot more straight forward in the 18th and 19th centuries and there was far less
complication to obscure the reality. In 18th and 19th century they had small state, raw capitalism
when there was little Government interference to cloud the issue.
The Corn Laws and Laissez-Faire, the requirements of free trade, a historical lesson:
"The Anti-Corn Law League was a successful political movement in Great Britain aimed at
the abolition of the unpopular Corn Laws, which protected landowners' interests by levying taxes
on imported wheat, thus raising the price of bread at a time when factory-owners were trying to
cut wages to be internationally competitive."
The landowners wanted to maintain their profit, charging a high price for corn, but this posed
a barrier to international free trade in making UK wage labour uncompetitive raising the cost
of living for workers and as a consequence, wages.
The anti-corn law league had to fight the vested interests of the landowners to get the UK
in a position where it could engage in free trade. They had to get the cost of living down to
a point where they could pay their workers internationally competitive wages.
Opposing national interests, productive industry and landowner rentiers.
It's always been that way, we just forgot.
Workers have been priced out of international markets by the high cost of living in the West
and now we try and tell them that is their fault. It is the elite who do not understand the first
thing about free trade unlike their 19th century predecessors.
The US has probably been the most successful in making its labour force internationally uncompetitive
with soaring costs of housing, healthcare and student loan repayments. These all have to be covered
by wages and US businesses are now squealing about the high minimum wage.
US investors and companies have little interest in investing in the US due to its high labour
costs caused by its own national rentier interests. There are opposing national interests within
the US just as there were in the UK in the 19th Century.
Most of the UK now dreams of giving up work and living off the "unearned" income from a BTL
portfolio, extracting the "earned" income of generation rent. The UK dream is to be like the idle
rich, rentier, living off "unearned" income and doing nothing productive.
The UK is itself atrocious and has encouraged rentier interests which oppose the interests
of those who want free trade. The UK is now ramping up student loans to make things worse. High
housing costs and student loan repayments will have to be covered by wages pricing UK labour out
of international markets.
Things were a lot more straight forward in the 18th and 19th centuries and there was far less
complication to obscure the reality. In 18th and 19th century they had small state, raw capitalism
when there was little Government interference to cloud the issue.
The Classical Economists observed the situation which was a lot more clear cut in those days.
The Classical Economists thought the cost of living must be kept low with free or subsidised housing,
education and healthcare funded through taxes on "unearned" income. "Earned" income shouldn't
be taxed as this raises the cost of doing business, real productive business that earns real wealth.
Imaginary wealth can be produced by inflating the value of a nations housing stock until the
bubble bursts and all the imaginary wealth disappears (e.g. US 2008, Japan 1989, Ireland, Spain,
etc ..).
Ditto all other financial assets.
The Classical Economists realised capitalism has two sides, the productive side where "earned"
income is generated the unproductive, parasitic side where "unearned" income is generated. The
vested interests of the two sides are opposed to each other.
If you forget you can made fundamental mistakes, like today's ideas on free trade.
Real wealth comes from the real economy where real products and services are traded. This involves
hard work which is something the financial sector is not interested in.
The financial sector is interested in imaginary wealth the wealth effect.
They look for some existing asset they can inflate the price of, like the national housing
stock. They then pour money into this asset to create imaginary wealth, the bubble bursts and
all the imaginary wealth disappears.
1929 US (margin lending into US stocks)
1989 Japan (real estate)
2008 US (real estate bubble leveraged up with derivatives for global contagion)
2010 Ireland (real estate)
2012 Spain (real estate)
2015 China (margin lending into Chinese stocks)
Central Banks have now got in on the act with QE and have gone for an "inflate all financial
asset prices" strategy to generate a wealth effect (imaginary wealth). The bubble bursts and all
the imaginary wealth disappears.
The wealth effect it's like real wealth but it's only temporary.
The markets are high but there is a lot of imaginary wealth there after all that QE. Get ready
for when the imaginary wealth starts to evaporate, its only temporary. Refer to the "fundamentals"
to gauge the imaginary wealth in the markets; it's what "fundamentals" are for.
Canadian, Australian, Swedish and Norwegian housing markets are full of imaginary wealth. Get
ready for when the imaginary wealth starts to evaporate, its only temporary. Refer to the "fundamentals"
to gauge the imaginary wealth in these housing markets; it's what "fundamentals" are for.
Remember when we were panicking about the Chinese stock markets falling last year?
Have a look at it on any web-site with the scale set to max. you can see the ridiculous bubble
as clear as day.
The Chinese stock markets were artificially inflated creating imaginary wealth in Chinese stocks,
it was only temporary and it evaporated.
Did the Chinese who used the "money" they got from inflation of stock prices to buy real estate
and other tangible assets, with that "money," continue to have legal ownership of said assets
after the market collapsed?
If they did, it's amazing how "wealth" gets created
I gave up TV 6 years ago and I am old. TV is awful for so many reasons. One of them is the
fact that it dictates lifestyle and values. I hate it for children.
Harlow is just using what I call the 3-legged stool approach which is to blunt any argument
by introducing rotating facets. You see it in arguments about the West Bank. If you mention Zionist,
they rebut with Israeli. If you say Israeli, they introduce Jewish. Round and round you go until
the point is lost.
Aside: I'd pay money to see Lambert yelling at a TV. The way he carves some people up on this
site makes my toes curl. No matter how much they deserve it, I feel really sorry for them.
Silver lining time. Without TV to emote to, my blood pressure is lower overall. This trade
off is very beneficial to me.
Also germane is that a hundred years ago, the cheap labour was pouring into America from offshore.
Now that population has stabilized, the labour is no longer as cheap, (it is still too cheap,
but,) in America. Companies are generally about the "bottom line." Socially conscious corporate
management is feted and lionized for a reason; it's rare.
Regulation and enforcement is the key. Buy local, shop local, govern local.
Yup. Unfortunately that can't be applied to the environment, where everybody is downstream
and downwind of everybody else. I don't believe in God, but if you do then you can claim that's
why he made planets spherical. :)
While I do have a tv I don't get CNN. Thank gawd. In fact the indignity of paying for CNN with
its inane announcers and endless commercial interruptions was a big motivator for "cutting the
cord."
Count me as another who doesn't have tv. The Jimmy Dore Show and various online videos make
up our viewing. In fact, it's difficult to read NC and other sites and then see the drivel that
passes for tv news. But just keep it up, guys (MSM); you're one of the main reasons we have a
huge alienated population of have-nots, and the unwashed masses are becoming restive.
The automation=job loss meme has been picked up in other places.
On the Saturday before the election, I visited the local Democratic headquarters in my Northern
California town to get a Clinton-Kaine bumper sticker for my collection.
As they wanted $1, I wanted to get some entertainment value from the purchase, so I asked one
of the elderly women "What has Hillary ever done?".
She responded with "Financial reform", apparently confusing HRC with Elizabeth Warren.
I mentioned that Hillary supported the TPP, until well into her campaign, and that trade bills
had cost jobs.
Her immediate response was "More jobs have been lost to automation than trade bills".
I was surprised she had this explanation at the ready, perhaps it was given to HRC campaign
workers as a talking point in case someone questioned HRC's commitment to stopping the TPP.
There is a meme being told from the people at the top, to the peasants.
Part of the answer is that it is reassuring for elites to believe that job loss stems from
complex "forces of production" that are far removed from human control. The inevitability of broad
economic trends makes a pundit sound more sophisticated than the unschooled factory worker who
thinks the company is moving to Mexico just because labor costs one-tenth as much.
The other day someone left a link to an article by an economist named Scott Sumner, where at
the end of his article the same meme is put forth, with a twist.
So what's all this really about? Perhaps the "feminization" of America. When farm work was
wiped out by automation, uneducated farmers generally found factory jobs in the city. Now factory
workers are being asked to transition to service sector jobs that have been traditionally seen
as "women's work". Even worse, the culture is pushing back against a lot of traditionally masculine
character traits (especially on campuses). The alt-right is overtly anti-feminist, and Trump ran
a consciously macho themed campaign. This all may seem to be about trade , but it's actually about
automation and low-skilled men who feel emasculated .
Unschooled and low skilled are code words for stupid, and the meme is, men that make stuff
are stupid.
Within his article is an interview of the CEO of United Technologies by Jim Cramer in Business
Insider that he quotes as confirming his reasoning that automation is solely responsible for all
the job loss and that offshoring and globalization caused zero manufacturing jobs to be lost in
the US.
The result of keeping the plant in Indiana open is a $16 million investment to drive down
the cost of production, so as to reduce the cost gap with operating in Mexico.
What does that mean? Automation. What does that mean? Fewer jobs, Hayes acknowledged.
From the transcript (emphasis added):
GREG HAYES: Right. Well, and again, if you think about what we talked about last week, we're
going to make a $16 million investment in that factory in Indianapolis to automate to drive the
cost down so that we can continue to be competitive. Now is it as cheap as moving to Mexico with
lower cost of labor? No. But we will make that plant competitive just because we'll make the capital
investments there.
JIM CRAMER: Right.
GREG HAYES: But what that ultimately means is there will be fewer jobs .
The general theme here is something we've been writing about a lot at Business Insider. Yes,
low-skilled jobs are being lost to other countries, but they're also being lost to technology.
Everyone from liberal, Nobel-winning economist Paul Krugman to Republican Sen. Ben Sasse
has noted that technological developments are a bigger threat to American workers than trade.
Viktor Shvets, a strategist at Macquarie, has called it the "third industrial revolution."
Economists can't add. $16 million in investment, of real goods to improve productivity to the
point where air conditioner production in Indianapolis can compete with Mexican production cost
using existing technologies that are ripped off the shop floor and trucked to Mexico, itself creates
jobs, and the improved more highly automated plant still retains jobs here, along with the technology.
That $16 million investment happened only because Donald Trump either threatened or promised
something for United Technologies, but the number of jobs lost now are not solely due to moving
all production to Mexico, which would have been what happened had he not used his power of persuasion
to pry some money for investment out of the United Technologies bank account.
I wonder what Scott Sumner and the rest of the economists think of the women that work in manufacturing?
Are they stupid too?
In 1980 before the stock buyback era, the ratio of compensation between the top 100 CEOs
and the average worker was 45 to 1. Today it is a whopping 844 to 1. (The German CEO gap is
closer to 150 to 1.)
45 to 1, 150 to 1, 844 to 1 .it's all ridiculous. Just because you wear a suit and have your
own office to work in does not somehow entitle you to make as much in a year (or a month or a
week) as much as someone else does in a lifetime.
Stock buybacks are a problem of such proportions, that it is a subject all by itself. To connect
it to Germany's Industrial policy is a perfect example of ahistorical, faulty, unempirical analysis
at its worst leading to the politics of simpletons. The stock buybacks reference here are recent,
21st Century. The de-industrialization of the US goes back to the immediate post WWII policies
of corporate America as well as the US Government.
Germany's industrial policy has complex contributing factors which has a more important contributing
factor in its military expenditures. This of course is directly related to Germany's history.
It lost WWII and was an occupied territory, eventually split into an East And West Germany. For
many years, even as a NATO member, West Germany spent almost ZERO on military expenditures. This
comes with being an occupied nation that lost a war. Even today, the US Marine Corps alone has
a budget that exceeds all of the re-united Germany's military budget. Germany, for obvious historical
reasons has been deliberately suppressed as a military power, even in meager self defense, back
when a Soviet doppleganger was on its border. Of course, when the US Government stations on your
soil, almost 100,000 or more military personnel, armored tank divisions and US Air Force bases
for decades, you can avoid the cost of national defense.
----------
"German Chancellor Angela Merkel said on Saturday that Europe's largest economy would significantly
boost defense spending in the coming years to move towards the NATO target for member states to
spend 2 percent of their economic output on defense.
But Merkel, addressing a conference of the youth wing of her conservatives, did not specify
by how much defense spending would rise.
Merkel said U.S. President Barack Obama had told her it could no longer be the case that the
U.S. spends 3.4 percent of its gross domestic product (GDP) on security while Germany its close
NATO ally only spends 1.2 percent of GDP on that.
"To get from 1.2 percent to 2 percent, we need to increase it by a huge amount," Merkel said.
In 2016 Germany's budget for defense spending stands at 34.3 billion euros so it would need
to be increased by more than 20 billion euros to reach the 2 percent target."
And for decades, avoid the burden of military expenses it did, to the direct contribution to
its industrial manufacturing center. Chalmers Johnson reviews this critical aspect of America's
Hegemony since WWII in the course of several books. He was a CIA analyst as well academic economist
expert on Japan and China. The US economy suffered disinvestment in its tool and die and metal
working sector to the tune of over $7Trillion while building up the Pentagon into the Global Military
Hegemon that it is today. The platform of the manufacturing center dependent on tool and die to
make the parts of the machinery of factories and weapons of wars was in decline and overtaken
by the Japanese and the Germans. We outspent the Soviet Union and now the rest of the world by
staggering margins. But, to make and maintain the machinery of war, the Great American Killing
Machine, global bases and global industrial skills and equipment replaced the domestic. The US
Naval bases from Boston, Brooklyn, Philadelphia-founding locale of the US Navy and US Marine Corps,
Baltimore, and on and on, all gone. Replacing the base closures, Guam, Okinawa, Rota, Spain, Naples,
Italy Ramstein, Germany, and on and on. And Germany and Japan, played their roles to keep up American
military might in exchange for our nuclear umbrella and military protection. This to the detriment
of jobs in the US.
--------------------------
"After World War II, the US reduced defense spending to 7.2 percent of GDP by 1948, boosting it
to nearly 15 percent during the Korean War. During the height of the Cold War with the Soviet
Union US defense spending fluctuated at around 10 percent of GDP.
At the height of the Vietnam War in 1968 defense spending was 10 percent of GDP. But then it began
a rapid decline to 6 percent of GDP in the mid 1970s and hit a low of 5.5 percent of GDP in 1979
before beginning a large increase to 6.8 percent in 1986.
Starting in 1986 defense spending resumed its decline, bottoming out at 3.5 percent of GDP in
2001. After 2001, the US increased defense spending to a peak of 5.7 percent of GDP in 2010. It
is expected to reduce to 4.5 percent of GDP in 2015 and 3.8 percent by 2020."
For 20 years from the end of WWII, military expenses soaked up about 10% of the annual GNP.
Those amounts dwarf stock buy backs. As you can see from the excerpt above, the military bill
to the US is enormous and as a global military, much of this money is spent outside of the US,
employing people outside of the US, many who are not US citizens. As bad and as large as financialized
capitalism is, the jobs are lost more to wasteful military "Keynesianism". The 10s of $Trillions$
for most of the 2nd half of the 20th Century explains more than stock buybacks, which of course
are more than statistically significant, just not in the same league as Imperial America.
Automation, deindustrialization and run away factories together formed the basis for weakening
organized labor and reducing the amount of good paying working class jobs with their good benefits
and security. Job security comes in the form of unemployment benefits due to the boom/bust business
cycle that has factories operating on 2 or more shifts and then cut back due to saturation and
or slack demand. Mexicans thrown out of work are easier to deal with than unemployed Americans,
not only due to costs but also political fallout. Unemployed Americans can still vote congressmen
out of office every 24 months if they are that unhappy with the economy. You don't need a job
to vote. But alas, that is also another large scale problem, all by itself that deserves focused
analysis and comments.
Soooo it's back to blame the gub'ment and give Capital a pass, eh? I see what you did there
nice work. I particularly enjoyed your fantasy that unhappy workers can vote their congressperson
out every two years ' cause that's empirically true of the US political system.
All this stuff about 'automation' killing jobs is just a distraction. It's not happening, not
overall. That's why productivity figures are going down they should be skyrocketing if automation
was to blame. The number of janitors and maids that have lost their jobs to a Roomba robotic vacuum
cleaner is zero. The number of truck drivers that have lost their jobs to robotic trucks is zero.
Shrimp are still flown to Malaysia, peeled by hand using slave labor, and then flown back, because
it's cheaper than developing and building and maintaining automated shrimp peeling machines. And
so on.
Why are the elites still so set on moving jobs to low wage countries? Why are they still so
set on an open-borders immigration policy? Because they know what they aren't telling us: right
now general robotics is still in its infancy, it's all about cheap labor.
So many otherwise rational and skeptical people have been distracted by the false 'robots are
now making human workers obsolete' meme. Congrats again on such a clearly reasoned piece.
The difference between German and US industrial manufacturing is social, not technological.
It only demonstrates that in the face of the displacement of labor with machines, social measures
are required to address the fact that a smaller percentage of total available labor is required
to produce the necessities of life. One way Germany has addressed this is by targeting high value-added
manufactures. In addition, historically manufacturing exports have always played a more important
part for Germany than for the US, never a big manufacturing exporter unlike (in the 19th C) Britain,
Germany, Japan and now China. US manufacturing was always primarily oriented towards the home
market, beginning with the Midwestern farmers and their McCormick reapers and Montgomery Wards
catalogs in the 19th C. The US has always been a primary products (oil, agri, timber, minerals)
exporter. Plus weapons. Kinda like Russia. Its two biggest trading partners are its continental
neighbors, Mexico and Canada.
The debate over whether job loss is due to automation or offshoring tends to be short on facts.
One almost never see a statistical breakdown that might tell us how much job losses are due to
one factor or another. That includes John Smith's "Imperialism in the Twenty-First Century: Globalization,
Super-exploitation and Capitalism's Final Crisis" (2016), quite big on off-shoring, but never
giving a concrete measure of the relative importance of one or the other.
However I put up a BLS-based chart that shows the decline in manufacturing jobs in the US in
a pretty diagonal straight line down beginning well before off-shoring became a thing, well before
NAFTA. Basically the manufacturing workforce peaked in the 50's. So there is always some pressure
through competition to displace labor with automation. Offshoring is merely a dependent alternative
to automation reduce the labor bill with cheaper labor, not displacement. It's not "one or the
other".
Technological determinism aside, a fetish is made of automation in the media because they know
there is no answer that doesn't conclude with the elimination of capitalism, and that answer is
out of bounds. Hence it is deployed literally as a deus ex machina that ends social debate. But
clearly the question of a living income has become separated from that of productive labor.
One might say that manufacturing employment started declining, when we allowed non-reciprocal
"free-trade"; access to our markets, in order to enable some other geopolitical goal.
Going something like : "Sure, go ahead and let the Japanese and Germans export their cars to
our market. It will help their economies, and we'll never notice the difference. Besides, even
if they didn't have various ways of restricting our exports, the size of their markets aren't
worth exporting to "
Then in the 70-80s, it was "Sure, lets help all of our Allies develop an aerospace industry,
and build their own F-16s. "Offsets"? No problem. No sacrifice by US workers is too much in order
to fight the "Red Menace", and promote "Free Markets" "Democracy", and improve the standard of
living over there.."
Millions of jobs go to Mexico and millions of Mexicans come to usa and send their millions
in wages home to support their families. Meanwhile Politicians continue with Rectal Crainial Inversion
while drawing huge salaries. When will the revolution begin?
Class-hatred has been simmering in the U.S. throughout its entire history, and it manifests
itself today in the anti-Americanism of our greedy elites, who would prefer to profit from the
exploitation of foreign labor over living in a just and equitable society. Germany and Japan benefitted
from losing the War, from Cold War trade policies that allowed them to rebuild on exports to the
U.S. (subsidized in many cases, such as by container ships returning from Vietnam via Yokohama),
and the creation of a manufacturing culture that continued to value workers even as their wages
rose. Americans in the credentialed classes became obsessed with rock-star lifestyles, epitomized
by Slick Willie bragging that his first date with Hill in 1971 involved crossing a union picket
line to scab at the Yale Art Museum in order to gaze at a bunch of vacuous Rothkos. But watch
out - class-hatred is a two-way street
Chicken and egg, Lambert. Stock manipulation increases the power of the 1%. I also yell at
the TV "news" - probably because I didn't have one either between the critical developmental ages
of 18 and 23 - so "news" broadcasts are not allowed in my house.
It's not all roses and unicorns either in Germany. There is outsourcing going on as well
for example both BMW and VW manufacture cars for the US market in the Southeastern US (IIRC both
in Spartanburg, SC).
Yes, Germany does have a better education system for apprentices etc plus it is still socially
acceptable to become an apprentice in a trade and not go to college. BMW is trying to establish
something similar around Spartanburg, but apparently with mixed success. Dan Rather did a segment
on this effort a few years back and interviewed a bunch of parents who said something along the
lines of "nice idea, but it's for other people's kids ours have to go to college".
Another thing to keep in mind is that large German manufacturing companies still tend to have
pretty strong union representation, which of course is sorely missing in the US.
Two words missing from Union Reps and Wage Slaves ourselves as we flail away while falling
backwards, "SOCIAL CONTRACT." Our backwards free fall from stable middle class growth and
access and attainment to higher education has been precipitated and pushed by a broadcasting system
and cyber platforms that have excluded the VOICE OF WORKERS ever since the first newspaper carried
a BUSINESS section with no LABOR section.
Through the various historical attempts to insulate some small sliver of broadcast spectrum
from advertiser pressures and market forces. Those various historical attempts now the strictest
taboo on content, even stricter than sexual predation and violent aberration which comprise much
of the broadcast content. Yet when or where can we find a broadcaster in the U.S. addressing issues
of structural media reform to insulate some national resources from the POLITICAL E-CON-o-my that
grants them to the the highest bidder.
As media scholars Robert McChesney and John Nichols have pointed out in a number of their book-length
studies on this taboo U.S. history of mass media: One of the first national radio networks was
designated for LABOR, there were multiple EDUCATIONAL networks and this has nothing to do with
IDENTITY LABELS used to divide U.S. like Conservative or Liberal, however these shifty terms are
defined. A well-rounded human has both aspects and more within them depending on circumstance,
context and situation being addressed.
Another designated non-commercial broadcaster was the CATHOLIC CHURCH whose leaders were actively
concerned with the use of public airwaves by Advertising Agencies using sales tactics to habituate
dangerous past-times (like alcohol and tobacco) and were driven by seasonal fashions rather than
values and verities such as the bible and catechism's preponderant calls to address the needs
of society's most disadvantaged. Or to beat weapons into plowshares and sit under a fig tree and
reason together (Isaiah) rather than to use fear to keep subsidizing the worlds largest distributor
of weapons and its stealthy and steely profiteers.
Sad day when the few token representatives of U.S. Wage Slaves cannot even be counted on to
voice a DEMAND much less to insert the concept of SOCIAL CONTRACT that extended humane and practical
DEMAND-DRIVEN\SUPPLY LINE insights into our materialistic society's wealthiest distributors of
hate and divisiveness such as Henry Ford, who while stoking anti-Semitism and disparaging independently
organized labor for his MASS PRODUCTION facilities, eventually realized that if his impoverished
work-force was ever to constitute the potential internal markets that became the Post WW II envy
of the world, those workers would have to be paid more than slave wages, be granted access to
long-term capital to purchase big-ticket items and our growing internal markets within the lower
48 states would require careful regulation and controls like tariffs and capital-flight restrictions
that would protect our enviable internal markets. Nowadays whenever PROTECTIONISM is demonized
by both Fair & Balanced Journalists and their Golden Rolodex of E-CON and Bid-Net experts there
is nobody to note how our own late-developing working middle classes grew from the Age of the
Robber Barons in which the U.S. was as feudal a society as Europe's with simple substitution of
the Captains of Industry for the monopolistic and conservative royal Anglo and Euro monarchs whose
crown-chartered legal anti-trust fictions dba EAST INDIA TRADING COMPANY or HUDSON BAY TRADING
CORPORATION.
Our founders rebelled against these Conservative Royal Feudal Monarchs and their Royally Chartered
monopolistic Corporate Legal Fictions by dumping such product into every available cartel-controlled
mercantile harbor. PROTECTIONISM was what allowed our states to form that most enviable of internal
national markets and prevented our SOCIALLY CONTRACTED WORK FORCE from being forced to compete
against cheaper off-shore or south-of-the-border slave labor that formed the same COMPETITIVE
ADVANTAGE now taken for granted when a subsidized start-up like NIKE decides to pursue a business
model that relentlessly exploits North American running shoe and sports wear market needs by cheaply
manufacturing such products off-shore via contracting agents exploiting captive Indonesian (substitute
other Latin American, African or Asian ENTERPRISE aka FREE TRADE ZONES) slave laborers.
If we aren't worth hiring at a sustainable SOCIALLY CONTRACTED WAGE aimed at developing our
national resources, we should reject buying from such nationally suicidal business models and
corporate LLC fictions even if they can pay-2-play legislation that removes the PROTECTIONS. We
vow to never sacrifice NATIONAL SECURITY, so why have we allowed the PRIVATIZATION of our NATIONAL
SECURITY STATE by corporate legal fictions? A revealing if not all-encompassing historical answer
to that question is another corporate-captured and regulatory-captured Mass Media Taboo discussed
one time to my knowledge on the PEOPLE'S AIRWAVES. Search Bill Moyers panel discussing the LEWIS
POWELL MEMO TO THE NATIONAL CHAMBER OF COMMERCE and the Nixon appointment of LEWIS POWELL to the
Supreme Court, despite his total lack of judicial experience.
{Creative Commons Copyright}
Mitch Ritter Paradigm Shifters
Lay-Low Studios, Ore-Wa
Media Discussion List
FELTNER: These companies are leaving to exploit cheap labor. That's plain and simple. If
he can change those trade policies to keep those jobs here in America, that's what we need.
We need American jobs, not just union jobs.
And thus we circle back to finding a way to keep manufacturing jobs in the USA. The comment
by Feltner is correct, but the solution of keep jobs in the USA using more expensive labor simply
means more expensive products. That is fine if you are in the top 10% and can pay anything for
your purchases, but I am on a fixed income and cannot afford to pay more for anything without
a 1:1 drop in my living standards.
The real macroeconomic problem is all, I repeat ALL new income after inflation generated
by the macro economy since Bush II took office has gone to the top 10% of households by wealth.
Why does NOBODY else seem to understand that you cannot run an economy without money? And the
Main Street economy is strapped with 10's of millions having fallen out of the middle class even
as their paper assets like home equity were stolen by the financialization of the USA and the
stockholders that own the Wall Street economy.
The data coming out of the government/fed is a work of total fiction, inflation has been galloping
(at least here in Oregon) at double digits since Jan 2014, rents alone are up 75% since then.
Food at least 40%, both auto and healthcare insurance at least 40%, just to name three items,
even a sandwich at a fast food join is nearly 100% higher than start of 2014 here. Del Taco raised
it's menu prices in July by over 100%. Companies do not do that in disinflationary eras such as
we are assured have existed since 2010. My veteran's disability/SS had it's first COLA increase
in a while for 2017, social security disability went up $3, that is not a typo, my rent has gone
up from 725 in December 2013 to $1,250 in Jan 2017 while my benefit has risen for next year by
THREE dollars.
I considered myself middle class, just barely but above working class/poor, as recently as
2014. Now I am leaving for Australia on a one way ticket in 3 weeks, if I had not been invited
there by a friend I would have had to give notice at this place anyway in order to live in my
vehicle. Inflation is so wildly out of control that anyone taking home less than 40k a year here
now needs a roommate. Is this metro Portland? No, it is far southern semi rural Jackson county
hundreds of miles from the nearest major hub.
So any analysis of economic conditions in the USA have got to start with recognition that the
cost of living has risen OVERALL by as much as 40-50% just in the last very few years.
WHY DO YOU THINK POPULISM RAISED IT'S VIRULENT HEAD THIS ELECTION CYCLE?
People are angry, they are broke, living paycheck to paycheck, using payday loans to feed their
kids, and the entire media and government refuse to recognize price increases because those increases
do not fit the Feds or government's economic models that allowed for negative real interest rates
and the historic borrowing by the congress. Inflation is as bad as it ever was in the 1970's but
we are told there is no inflation and so if we are not making ends meet it simply has to be a
personal failing, bad habits, or profligate spending when I know for my part I have cut back on
absolutely every thing I can including heat. It is not a personal failing, it is being lied to
by the powers that be.
Seriously, until the contributors at Naked Capitalism finally recognize the house on fire inflation
for every item you must purchase (except gasoline and flat screens) there really is nothing here
worth reading.
The answer is that the very rich are waging class warfare and are looking for anything to absolve
them of responsibility.
If automation were responsible for unemployment, then productivity figures would be soaring.
Dean Baker notes that productivity has been rising at half the rate over the past decade at just
1.5% per year, compared to 3% between 1947 and 1973.
http://cepr.net/publications/op-eds-columns/the-job-killing-robot-myth
People need a restitution for the outright looting of society from the rich. That's about it.
You missed some. German companies, but also those of other European countries, generally have
a seat on the board for unions. The adversarial model of management versus unions is not so common.
China has stolen a great deal of technology from Germany because it has (had?) the most advanced
industrial technology in the world. Read the below articles from Der Spiegel and you will understand.
Essentially, Germany is what the U.S. was in the 1980s before the various presidents, both left
and right, starting with Nixon, sold us down the river.
"Product Piracy Goes High-Tech: Nabbing Know-How in China"
"Harmony and Ambition: China's Cut-Throat Railway Revolution"
"Beijing's High-Tech Ambitions: The Dangers of Germany's Dependence on China"
And the following is from CNN/Money, "How to save U.S. manufacturing jobs": "High wages can't
be the culprit, because wages in U.S. manufacturing are not especially high by international standards.
As of 2009, 12 European countries plus Australia had higher average manufacturing wages than the
United States. Norway topped the list with an average manufacturing wage of $53.89 per hour, 60
percent above the U.S. average of $33.53 Moreover, the United States lost manufacturing jobs
at a faster rate since 2000 than several countries that paid manufacturing workers even more.
Among the 10 countries for which the Bureau of Labor Statistics tracks manufacturing employment,
Australia, France, Germany, Italy, the Netherlands and Sweden both had higher manufacturing wages
and lost smaller shares of their manufacturing employment than the United States between 2000
and 2010."
Not to mention Germany's apprentice system, which works really well.
"... Cahal Moran is a member of Rethinking Economics, the worldwide student movement to reform the teaching of economics. He is the co-author, with Joe Earle and Zach Ward-Perkins of the book ..."
"... The Econocracy: The Perils of Leaving Economics to the Experts ..."
"... the authors can be followed on their Twitter account ..."
"... @TheEconocracy ..."
"... . Interview conducted by Philip Pilkington, a macroeconomist working in asset management and author of the new book ..."
"... The Reformation in Economics: A Deconstruction and Reconstruction of Economic Theory ..."
"... . The views expressed in this interview are not those of his employer. ..."
"... In the book we give a formal definition of econocracy as "a society in which political goals are defined in terms of their effect on the economy, which is believed to be a distinct system with its own logic that requires experts to manage it. " ..."
"... Economists are wheeled out to comment on all sorts of public policy issues: in the news, on the TV, online and so forth. The deference to economic expertise is something that permeates our politics and, through the use of jargon, maths and statistics, serves to exclude non-expert citizens from conversations about issues that often have a direct impact on their lives. As you imply, it is something like an ancient priesthood. In fact, in an earlier draft of the book we made a comparison to ancient medical texts, which were only written in Latin and so created a huge asymmetry between experts and non-experts, which could have awful consequences for the latter. In some senses economics in modern times goes even further than this, because it affects policy on everything from incomes and jobs to healthcare and the environment. ..."
"... I suppose that leads us pretty tidily to the title of the second chapter of your book: 'Economics as Indoctrination'. Given that you have this view of economic language one which I concur with in that I have concluded that maybe 60-80% of formal economic language is ideology it pretty naturally follows that there will be some attempt to indoctrinate those who wish to speak the language. I guess the natural place to start is to ask you for a flavour of what this indoctrination looks like and then maybe we will move on to what its purposes are and what ends it serves. ..."
"... We call economics education indoctrination in the book not just because students are presented with only one set of ideas neoclassical economics but because they are taught to accept it in an uncritical manner, as if it is all there is to economics. ..."
"... Keynes said that the real challenge lies in escaping old ways of thinking, and this is something we've all noticed in ourselves after studying economics. ..."
"... This process is indeed the main way that the econocracy reproduces itself: as the economic experts of the present train the economic experts of the future, this shapes the way the latter approach economic problems when they go on to work at powerful institutions. Broadly speaking, this education shapes the perception of economic experts in two ways. Firstly, they tend to have mechanical view of the world, thinking of economic and social problems as clearly defined technical questions. This allows them to produce clear predictions when addressing even complex political issues. Secondly, they see economics as a separate, value-free sphere which does not require ethical and political debate. Their answers to policy questions have the air of objectivity about them. ..."
"... Economists predict disaster where none occurs. They deny the possibility of events that then happen. They oppose the most basic, decent, and sensible reforms, while offering placebos instead. They are always surprised when something untoward (like a recession) actually occurs. And when finally they sense that some position cannot be sustained, they do not re-examine their ideas. Instead, they simply change the subject. ..."
"... Making central banks independent from the political process, staffing them with economists and tasking them with using interest rates to manage inflation and growth, along with a fairly hands-off approach to the financial sector (which itself used economic models such as Black-Scholes) seemed to be working. That was, until the theoretical blind spots economists had in the housing market and financial sector was revealed by the near-collapse of both of them. ..."
"... I suppose this is a variant on the classic 'who governs the governors': who teaches the teachers. ..."
"... substantive ..."
"... If economics is to function as the medium of power than its students must be made to follow blindly. Critical thinking would allow them to undermine it or manipulate it to their own ends. ..."
"... The students must be made into strict adherents before being granted access to the highest levels of information. By erecting barriers at each level (be it specialized language that must be mastered or learning contigent on prior learning) we can separate the weak from the true adherents. ..."
"... Following Adler, economics is not a science, it's a philosophy. At least economics doesn't burn its heretics, it just ignores them. Science is neither immune. Gerald Pollack has written that he was advised to avoid water as a subject of inquiry, or it could kill his career. ..."
"... File under "the creative class" writers ΰ la Toynbee ..."
"... When you think about it economics doesn't really exist. Society does. And when economics is talked about like society doesn't exist it gets pointless. Just like some stupid software language that does basically nothing. What we need is the courage of our human convictions. I think it was Blyth in an early clip who said more or less, "Just do it." Deficit spend as necessary and the solutions will appear. That's very Zen and I love it. I mean, here's the question, What is the worst that can happen? If there is sufficient money. Great interviewer and interviewee. Thanks NC for this post. ..."
"... "Economics doesn't really exist, society does": a super obvious statement that stands in starkest distinction to NeoLib ideology that insists we are all atomistic, isolated individuals. Math and language are epiphenomena to human being that have perverted our self perception nearly to oblivion. ..."
"... Interesting thing I heard the other day, Professor Richard Wolff says he studied economics at three elite universities (Yale, Harvard, and another notable I cannot remember) and never had a course in Karl Marx. Tunnel vision for sure in the field. ..."
"... Answer to question no 2: The jargon that is being used these days by presidents, economists, talk show hosts is beyond my understanding. I have a masters degree. ..."
"... An argot (English pronunciation: /ˈɑːrɡoʊ/; from French argot [aʁˈɡo] 'slang') is a secret language used by various groups-e.g., schoolmates, outlaws, colleagues, among many others-to prevent outsiders from understanding their conversations. The term argot is also used to refer to the informal specialized vocabulary from a particular field of study, occupation, or hobby, in which sense it overlaps with jargon. ..."
"... Is the economics profession simply following the "He who has the gold, makes the rules"? Many other professions service retail customers, such as attorneys and doctors. But how many ordinary citizens ever deal with an economist on any level? ..."
"... If paycheck dependent economists know that powerful politicians, wealthy corporate leaders and wealthy donors in academia are looking over their shoulders, one could expect economists' message to be justify what their "employers" want to do. ..."
"... "Keen was formerly an associate professor of economics at University of Western Sydney, until he applied for voluntary redundancy in 2013, due to the closure of the economics program at the university. ..."
"... You will eat, by and by, when you learn how to bake and how to fry. Chop some wood, It'll do ya good. And you'll eat in that sweet by and by. ..."
"... This interview articulates an extremely important insight when it states that the economy " is believed to be a distinct system with its own logic that requires experts to manage it." ..."
"... This seeming independence of the economic and political systems has largely deceived most of modern social science. This seeming independence is not real, and in fact these spheres are deeply intertwined. ..."
"... As people llike Karl Polyani and Philip Mirowski have maintained, markets are always organized through politics and institutions and one key to understanding this reality is to keep a focus on the promulgation of the rules and regulations of a powerful state that helps to create movements for both regulation and deregulation. ..."
"... It was notable that Cathal failed to mention Marx. I don't think he realizes yet quite how fully indoctrinated he's been as that humdinger of an analogy (gay marriage actually a redefinition to normalize surrogacy, a eugenics-by-stealth agenda, hence it's enormous funding by the plutocracy) indicates. The economic can never be separated from the socio-political. ..."
"... Mirowski describes how the "Neoliberal Economic thought collective" captured and now dominates economic doctrine by controlling what and who can publish in the major economic journals. As a result those aspects of Neoclassical Economics remaining are being re-shaped into a Neoliberal mold. I noticed the word "neoliberal" doesn't show up anywhere in this post yet Neoliberal economic policies and rationales dominate policy in the real world. ..."
"... Mirowski points out that Neoliberal economics designs policy to apply market models to every problem based on the doctrine that markets are the most powerful information processing system available to man - a strong form of the Efficient Markets Hypothesis. The Market is the ultimate epistemological device. If the market solution doesn't satisfy the needs of the common man then satisfying those needs is simply contrary to the wisdom of the market. For other problems like externalities they just need to be properly incorporated into the market model to obtain an optimal solution to whatever problem they present. ..."
"... . Putting fins and flashy hubcaps on Neoclassical economics as it morphs into Neoliberal economics is not the answer. ..."
"... The role of Economics is simple: it should inform people of the consequences of certain decisions we make about who gets what. ..."
"... You are right, that is what it should be, unfortunately neoclassical has failed horribly in that regard. It is based on assumptions that are demonstrably false and they are never revisited to see the effect of relaxing them. You might as well be counting angels on a pin. See Roamer's take down of it for starters. ..."
PP: Your book starts with a quote from Albert Camus that is, in some ways, rather pessimistic.
In it he says that most generations seek to reform the world but that his generation only sought
to ensure that the world does not destroy itself. You and I are both of the same generation broadly
speaking and I do not think it unfair that our generation is subject to some abuse and often portrayed
as narcissistic, video-game obsessed, layabouts. I have always felt that the 'problem generation'
are, in fact, the Baby Boomers who tag us with these clichιs. It is this generation that rules the
world today and this generation that gave birth to The Econocracy. Before we get too much into what
The Econocracy is and how it operates, maybe you could briefly talk about this generational issue.
Is it something that you have given much thought to and do you identify more so with Camus' generation?
CM: We do not focus on the generational issue too much, but it is really at the heart of the book
and of the student movement more generally. Unlike the boomers, we have grown up in a world of economic
and political uncertainty, with the financial crisis being the most extreme example of this (yet).
The disconnect between this uncertainty and at times chaos and what we saw in the classroom really
sowed the seeds for societies like Post-Crash Economics. If the boom had simply continued, perhaps
we would have just shrugged our shoulders and got on with it. But we could not ignore what was going
on outside the lecture theatre. In this sense, Camus' feeling of a call of duty resonated with us
and that's why we chose that quote. However, we try to use this initial pessimism to build a positive
vision later on.
PP: Yeah, I know the feeling. It was very hard for me to not think that something was really,
really wrong with economics as I took undergraduate classes against the backdrop of the 2007-08 crisis.
For me there was a lot of cognitive dissonance. I found it really weird because it seemed to me pretty
obvious that economics was the language of power the language through which our leaders communicated
their plans and goals to the rest of us. But what I was learning in class did not seem up to this
in any way, shape or form. I think that this is a theme in your book too. Could you explain what
you mean by 'The Econocracy' and how it functions?
CM: In the book we give a formal definition of econocracy as "a society in which political goals
are defined in terms of their effect on the economy, which is believed to be a distinct system with
its own logic that requires experts to manage it. " In other words, the idea of 'the
economy' as a separate sphere of life is dominant in politics, and this separate sphere has technical
properties which can only be understood through economic expertise. The results are twofold. First,
public debates about the economy are conducted in a language that most people simply do not speak
we've tried to look at this this through undertaking polling with Yougov and one of the things
we found is that only 12% of respondents said they thought politicians and the media talk about economics
in an accessible language.
Second, many key areas of decision making central banks, international institutions like the
IMF & World Bank, competition authorities are delegated to people with economic expertise on the
grounds that they can find what is in some sense a technically 'right' answer to economic problems
in their respective domains. The rise of this idea of the economy is reflected in the increase in
mentions of 'the economy' in the winning UK political party's manifestos: it was only mentioned once,
for the first time, by the Conservatives in 1950, but 5 years later this rose to 10 and in the most
recent Conservative party manifesto 'the economy' was mentioned 59 times.
PP: I'm getting the sense that this goes beyond a simple criticism of technocracy and bureaucracy,
right? I mean a lot of aspects of society are run based on expertise of some sort or another. But
you seem to be getting at something else. Is this related to the fact that, like the Scholastics
of the Middle Ages, they have concocted an elite language?
CM: That's absolutely right. One could probably write a book critiquing the technocratic and bureaucratic
tendencies of say, lawyers or accountants, but where economics goes one step further is the place
it has in public debate. Economists are wheeled out to comment on all sorts of public policy issues:
in the news, on the TV, online and so forth. The deference to economic expertise is something that
permeates our politics and, through the use of jargon, maths and statistics, serves to exclude non-expert
citizens from conversations about issues that often have a direct impact on their lives. As you imply,
it is something like an ancient priesthood. In fact, in an earlier draft of the book we made a comparison
to ancient medical texts, which were only written in Latin and so created a huge asymmetry between
experts and non-experts, which could have awful consequences for the latter. In some senses economics
in modern times goes even further than this, because it affects policy on everything from incomes
and jobs to healthcare and the environment.
PP: Yes. I've also long thought this. My book is actually about trying to figure out what is pure
ideology and mysticism and what is not within the jargon. I suppose that leads us pretty tidily to
the title of the second chapter of your book: 'Economics as Indoctrination'. Given that you have
this view of economic language one which I concur with in that I have concluded that maybe 60-80%
of formal economic language is ideology it pretty naturally follows that there will be some attempt
to indoctrinate those who wish to speak the language. I guess the natural place to start is to ask
you for a flavour of what this indoctrination looks like and then maybe we will move on to what its
purposes are and what ends it serves.
CM: It sounds like there's some crossover between our books, and this is something I've noticed
with people across the movement. It's great that so many people are independently coming to similar
ideas and, I think, a sign that we may just have a point.
We call economics education indoctrination in the book not just because students are presented
with only one set of ideas neoclassical economics but because they are taught to accept it in
an uncritical manner, as if it is all there is to economics. The idea that there might be criticisms
of neoclassical economics, other schools of thought, and even the real world are evicted to such
an extent that after a while students may find it difficult to think any other way. Keynes
said that the real challenge lies in escaping old ways of thinking, and this is something we've all
noticed in ourselves after studying economics.
PP: I'd tend to agree. But what I found very interesting about the book was that you looked at
how economics education is structured. You paint the picture of a very odd discipline that does not
appear to be taught like other disciplines, whether natural or social science. Do you think that
there is something distinctly different in this regard and could you describe it briefly?
CM: Economics is definitely a law unto itself. In natural sciences, the culture is very much focused
on the empirics: theory has empirical motivations, and you always come back to falsifiable predictions
before too long. In other social sciences, the culture is instead focused on debate and the contested
nature of knowledge. You learn not to take any of your beliefs for granted. But entering an economics
degree feels a bit like being transported to another universe. Students are introduced to a fixed
body of knowledge that is presented as if in the words of one student it "fell from heaven in
an ever-true form". The focus is very much on learning this body of knowledge by rote, building up
the neoclassical world from abstract axioms and solving mathematical problems with at best vague
and stylised references to the real world they are supposed to represent. The commonly used phrase
'thinking like an economist' really captures the effort to indoctrinate students into this framework.
We did a curriculum review of the final exams and course outlines of 174 modules at 7 Russell
Group universities (considered the 'elite' of the UK) to look systematically into how economics students
are educated. Our main aim was to look for evidence of critical thinking, pluralism and real world
application, all of which we would consider vital to educating the experts of the future. The results
were deeply worrying: 76% of final exam questions showed no evidence of critical thinking that
is, formulating an independent, reasoned argument. When only compulsory modules (namely micro and
macroeconomics) were included, this figure increased to a staggering 92%. Instead, the majority of
marks are given for what we call 'operate a model' questions: working through a model mathematically
without asking questions about its applicability. Of those questions which ask students to operate
a model, only 3% even attempted a link to the real world. The remainder of the marks were given for
simple description questions ('what is the Friedman k% rule?') or multiple choice questions, again
neither of which require any critical thinking. All of this is very worrying when you consider the
place economic expertise has in society.
PP: It is really very concerning. Although I would imagine that anyone who has actually taken
an economics class as many of the educated public have at some time or other will not be surprised
at what you have found. If you are correct then it seems to logically follow that the experts of
the future are being trained to think in a highly abstract manner but that these abstractions need
no link to the real world as it exists. What is more, if they are only being given one perspective
and are told that this perspective is as true and infallible as the most rigorous of the sciences
you are going to get a very high level of confidence in these abstractions by these experts. Have
you thought about what this means when these people flow into the elite institutions that control
important aspects of our societies? How do you think that it informs and shapes their judgements
and what implications do you think this has for the rest of us?
CM: This process is indeed the main way that the econocracy reproduces itself: as the economic
experts of the present train the economic experts of the future, this shapes the way the latter approach
economic problems when they go on to work at powerful institutions. Broadly speaking, this education
shapes the perception of economic experts in two ways. Firstly, they tend to have mechanical view
of the world, thinking of economic and social problems as clearly defined technical questions. This
allows them to produce clear predictions when addressing even complex political issues. Secondly,
they see economics as a separate, value-free sphere which does not require ethical and political
debate. Their answers to policy questions have the air of objectivity about them.
To make things more concrete consider cost-benefit analysis, an idea with its roots in economics
that's used extensively by major institutions like the Government Economic Service in the UK. This
calculates the 'costs' and 'benefits' of different policies by assigning a monetary value to each
of them, then provides a clear decision rule: if the benefits outweigh the costs, the policy is a
good one. Cost-benefit analysis is used even when the effects of a policy are not obviously monetary,
such as the number of trees in an area, or mortality rates, transforming what was a multifaceted
problem into a simple, seemingly objective mathematical problem. The result of this is that decisions
which could concern a large range of stakeholders are made in a centralised manner behind closed
doors, often without the consultation of these stakeholders (except in order to retrieve money values
from them, which raises problems in itself).
PP: Right. I see what you mean. So this goes far beyond, say, the blindnesses in the theories
that led to, say, economists largely missing the crisis and thinking, to quote Blanchard, that
the "state of macro was good" even in the face of such problems. Have you given any consideration
to these facts in the book? James Galbraith has a great quote where he says that:
Economists predict disaster where none occurs. They deny the possibility of events that then
happen. They oppose the most basic, decent, and sensible reforms, while offering placebos instead.
They are always surprised when something untoward (like a recession) actually occurs. And when
finally they sense that some position cannot be sustained, they do not re-examine their ideas.
Instead, they simply change the subject.
That seems to be another angle by which you might criticise the profession: namely, that they're
not actually very good at what they claim to be specialists in. Do you and your co-authors have anything
to say about that?
CM: Exactly economics permeates our political process, from seemingly small examples like cost-benefit
analysis to catastrophic events such as the financial crisis. We open the book with the former but
later on we move on to several case studies of the latter, including the financial crisis but also
broadening our argument to other areas where we think neoclassical economics falls short, like the
environment and inequality. The kind of hubris illustrated by economists like Blanchard as well
as Robert Lucas when he claimed "the central problem of depression prevention had been solved" in
2003 seems quite remarkable to us now, but economists really had convinced themselves that they'd
found a simple, technical solution to the business cycle. Making central banks independent from the
political process, staffing them with economists and tasking them with using interest rates to manage
inflation and growth, along with a fairly hands-off approach to the financial sector (which itself
used economic models such as Black-Scholes) seemed to be working. That was, until the theoretical
blind spots economists had in the housing market and financial sector was revealed by the near-collapse
of both of them.
Quite clearly, the profession has yet to find definitive answers to major economic questions like
'what causes financial crises?' This is completely understandable in itself, as these are difficult
questions. But the fact that the profession also has the capacity to convince not only itself but
policymakers and politicians that it has solved these problems, and therefore
that its ideas should guide public policy, is extremely worrying when it can have such terrible consequences
for so many people. And it is worth mentioning those non-neoclassical economists like Hyman Minsky,
Wynne Godley, and Steve Keen who put the financial sector front and centre of their analysis and
made sometimes prescient warnings about crises like the one we've just experienced. Given these examples,
it actually puzzles and saddens me that the profession is not willing to accept more intellectual
diversity. Galbraith's quote touches on this intellectual inertia, and one of the things we discuss
in the book is macroeconomists' attempts to reassert themselves since the financial crisis, some
of which have involved some impressive mental gymnastics. One example is Tom Sargent denying altogether
that macroeconomists failed to foresee the crisis, which is ironic because he wrote a paper just
before the crisis arguing that investors weren't taking enough risk due to their memories of the
Great Depression. This kind of retrospective rewriting of history has to be fought if economics is
not to slip back into old habits.
PP: The mental contortions are absolutely fascinating. I've noticed three key trends in the profession
since the crisis. The first is to talk more about a phenomenon that mainstream economists call 'rational
bubbles'. I mean RATIONAL bubbles. That is manifestly a doublethink word, not unlike Orwell's blackwhite.
The second is to add Bayesian agents into economics models and saying that this will ensure that
these models are robust in future (an absurd claim given the backward-looking nature of Bayesian
agents). Bayesian agents, of course, update their beliefs in line with past events - not a bad allegory
for the how the modellers see themselves! The final, and most pronounced, is to try to sweep under
the carpet the fact that the Efficient Markets Hypothesis makes falsifiable (and falsified!) claims
that markets integrate all relevant information and instead try to draw attention to the fact that
it also states that no one can beat the markets. The idea seems to be to maintain the theory by saying
that it doesn't say what it in fact says and drawing attention to a secondary prediction that it
makes. What do you make of this sorry, but I have to say it dishonesty? And do you think that the
next generation are by and large swallowing it?
CM: I think the issue is that many economists are stuck in their ways. It's clear these economists
have been doing economics a certain way, using a certain framework, for their entire lives, so it's
perhaps unsurprising that they can't think any other way. Max Planck said that science advances one
funeral at a time, but the especially worrying thing given the research we've done for the book is
that the next generation of economic experts are being trained to think in the exact same way. In
fact, evidence we present suggests that economics education has actually become more, not less narrow
over the past few decades, so if things don't change the situation could get even worse in the future.
And as I mentioned earlier, that's nothing against economics students themselves they have exams
to pass, and aren't really given much opportunity to read around and question what they're taught.
The positive thing is that we are seeing these student groups spring up across the world who are
all recognising the limitations of their education: the lack of pluralism, critical thinking and
empiricism come up again and again in students' complaints. What's more is that we have support from
big institutions like the Bank of England, Trade Union Congress and Government Economic Service,
who have voiced similar concerns. If you look at things like the movement for gay marriage in the
United States, it's clear the politicians were the last to change when every other sector of civil
society had been convinced and they had no choice. Perhaps if change comes to economics, academia
will be the last to change when everyone else demands it.
PP: But surely this is somewhat different from a political issue like gay marriage. Political
issues have to do with changing peoples' opinions on some matter or other. That just means putting
forward a persuasive argument and then waiting for it to get accepted. What we are dealing with seems
like something rather different. Sure, you could convince many that some change needs to come about
in the way economics is taught. But that does not produce the means by which to teach it. I think
that we saw what happens there with Wendy Carlin's CORE program (an INET-funded attempt at curriculum
reform). This was the economists' response to demands for a more integrated and pluralistic course
but I saw it - and I think the student movement saw it - as more of the same. Yet I have no doubt
that Carlin really did her best to put together something that she thought would address the concerns
being raised. The problem is that Carlin et al cannot actually put together something that meets
the concerns. I suppose this is a variant on the classic 'who governs the governors': who teaches
the teachers.
CM: You are absolutely right about that and the example of CORE is a good one, as it demonstrates
perfectly the type of limited reform which can serve as a safety valve against more radical opposition.
Carlin and CORE's other proponents view the problem as one with economics education, but not economics
itself she has previously stated that "economics explains our world, economics degrees don't".
Interestingly, this rhetoric is similar to the response to calls for reform in economics graduate
programs in the US in the 1980s, where the need for more real world application was accepted but
it was argued that programs should retain the "core [which] should be regarded as the basic unit
in which those things common to all economists should be taught". We repeatedly see this disconnect
between the critic's idea of reform and the mainstream's, cemented by the fact that many neoclassical
economists simply do not know enough about non-neoclassical ideas to teach them. It is a vicious
circle which is inevitably going to reproduce a fundamentally similar education, even if some internal
attempts at reform are made along the way.
Thus in CORE the calls for history, real world applications and interdisciplinarity are all, to
some degree accepted (even if they are not pursued adequately), while the calls for pluralism and
critical thinking are not. The resulting education is perhaps an improvement, but the outcome is
similar: instead of saying 'here is neoclassical economics, learn and then (maybe) apply it', the
message of CORE is 'here is the real world, here is how neoclassical economics applies to it'. Once
more, the idea that the theory and even the history itself might be contested is thrown out of the
window and the result is still a narrow education. In fact, we reviewed the University College London
exams for the CORE course and found that they showed a slight increase in critical thinking, but
were still primarily about regurgitating models and theories. The need for pluralism is made especially
apparent here, as learning about alternative ideas immediately makes students re-evaluate what they
have already been taught. Students need to know more than one set of ideas if they are to judge which
ideas are best suited to explaining a particular situation.
PP: My impression from the book and please, correct me if I'm wrong is that you want to bypass
this structural constraint by making economics more democratically accessible. Personally, I think
that there is a lot of merit to this idea. In my book, as I said, I try to present an ideology-neutral
economics which I think can be done to some limited extent and what you find with such an economics
is that many different worlds are possible. Economics in this regard can be a helpful guide but it
cannot tell you much about where you want to go. For this reason I would much prefer to see more
democratic input on economic decision-making and much less pontifications from an over-heavy technocracy.
That said, however, economics is still a relatively difficult subject. It cannot be picked up without
some commitment to study it. How do you square this circle by which I mean, how do you try to increase
the accessibility of economics without watering it down so much that it becomes analytically dysfunctional?
And a cheeky, but related question: in the book you rightly draw attention to the fact that economics
jargon is over represented in political discourse how do you ensure that you are not increasing
the volume and weight of this jargon through attempts at popularisation?
CM: We definitely view the democratisation of economics as a necessary part of the renewal of
the discipline and indeed of politics, but your conception of it as a strategic way to bypass the
inertia of the discipline is an interesting idea and something I hadn't thought of explicitly. I
suppose this goes back to what I was saying about bottom-up approaches to reform and the value of
demanding change from different angles. Unfortunately and as we've seen, one of the main response
to Brexit and Trump by elites has simply been to view those who vote for it as ignorant or bigoted.
The simple fact is that many peoples' lived experience of 'the economy' is completely different to
the top-down, statistical and theoretical views of economists and pundits. Many have experienced
huge shifts and declines in their circumstances for decades, neither of which are obvious if you
only look at GDP and inflation statistics, or (worse) if you are completely lost in theory.
In the book we introduce the idea of the public interest economist, who has socially aware research
topics, a commitment to public engagement and education, and who looks to hold powerful public and
private institutions to account. Reconnecting economic experts with the public in this way would
be a great way to temper the former's technocratic, top-down tendencies and encourage the experts
to understand that people may have different, valid views to them and this is a gateway to appreciating
other approaches more generally. Of course, this doesn't eliminate the need for expertise altogether:
our intuition can only go so far, and some things can only be revealed by systematic and empirical
study. Economics is difficult, as you point out. But a world in which economic experts are in touch
with and can be questioned by the public is one where economic expertise will naturally be more responsive
to the needs of said public. We sum it up by saying that we want experts to inform our decisions,
but not necessarily to make them for us.
Illustrating the magnitude of the challenge you raise about teaching economics without jargon,
I'm going to have to introduce some jargon. In the book we distinguish between formal
literacy, where people are taught a fixed body of knowledge; and substantive
literacy, where people are encouraged to question the subject matter and form their own independent
views. This is the basis for the other pillar of our proposals: citizen economists, non-experts who
nevertheless have some baseline level of substantive literacy and are able to engage in economic
debates. The starting point for citizen economics is to make connections between peoples' own lives
and broader economic problems, encouraging their own input from the start. And an important part
of being a citizen economist is not to accept the seeming authority bestowed by the use of jargon
and to ask experts to say what they mean in plain language. As a student movement we have already
started to put this into practice with citizens' crash courses (evening classes for adults), schools
workshops, the public education website ecnmy.org and by supporting the RSA's
Citizens' Economic Council, which is seeking to establish more democratic input into economic policy.
PP: Yeah, I think I see what you're saying. Anyway, I suppose we should wrap this up as it's pretty
long already. Where do you see this whole thing going from here? Are you optimistic about the future,
both in terms of opening up the discipline and in terms of fixing the incredibly serious economic
problems that have emerged in the past 30 years?
CM: I am cautiously optimistic about the future, as I think in many ways the debate has been won
over whether economics should change the question is now what form this change should take. On
top of changes we have already discussed such as CORE and the position of the Bank of England, we
have seen the ESRC put aside a large pot of money for research in new ideas in macroeconomics (the
question is whether this money will be used to support CORE type research or more diverse and radical
ideas); Manchester council involving citizens more in the decision-making process; the director of
the IFS, Paul Johnson, admitting economists' failure to communicate during Brexit; and many more
emerging examples that the message is getting across to various sections of civil society. More must
certainly be done and it is up to everyone to make sure that the changes are fundamental rather than
incremental, but in my eyes it is starting to look possible that economics will evolve from an insular
and esoteric discipline into a vibrant, pluralistic public dialogue and we think that can only
be a good thing
"In other social sciences, the culture is instead focused on debate and the contested nature
of knowledge. You learn not to take any of your beliefs for granted. But entering an economics
degree feels a bit like being transported to another universe. Students are introduced to a
fixed body of knowledge that is presented as if in the words of one student it "fell from
heaven in an ever-true form"."
How on earth did this happen?? Was the teaching of economics always this way? Or did something
happen at some point along the way (say, the influence of a particular school of thought, etc.)
to create a static curriculum where critical thinking is so undervalued?
"The deference to economic expertise is something that permeates our politics and, through
the use of jargon, maths and statistics, serves to exclude non-expert citizens from conversations
about issues that often have a direct impact on their lives."
Doesn't this sound exactly like the Clinton campaign? Technocrats all, who say to people like
me, "Trust us. We're the EXPERTS. Don't even try to stretch your silly little brains. We know
what's best."
If economics is to function as the medium of power than its students must be made to follow
blindly. Critical thinking would allow them to undermine it or manipulate it to their own ends.
The students must be made into strict adherents before being granted access to the highest
levels of information. By erecting barriers at each level (be it specialized language that must
be mastered or learning contigent on prior learning) we can separate the weak from the true adherents.
Following Adler, economics is not a science, it's a philosophy. At least economics doesn't burn its heretics, it just ignores them. Science is neither immune.
Gerald Pollack has written that he was advised to avoid water as a subject of inquiry, or it could
kill his career.
This article highlights why I take what positions Naked Capitalism assert seriously. For instance
getting input from Clive about the difficulty of the mechanics of Greece leaving the Euro. Or
Yves, having knowledge from her father's work about solving problems in the real world. This problem
is not just limited to economics. To get a Phd one must basically agree to what you have been
taught. To get published one must undergo peer review by people who almost always believe the
current mainstream ideas in that field. Remember how the nutrition experts told you margarine
was good for you butter and eggs were bad. Climate science is a good example. Reliance on models
that can never be complete. In almost every conversation I have had as a climate skeptic, the
strongest believers in the alarmist position rely not on their own understanding but that of experts.
And those experts who are alarmist rely almost entirely on computer modeling results to buttress
their position. In fact, as a skeptic I could almost rewrite the above article using climate science.
In your own mind, try that. As a generalist (non climate scientist) I can read and understand
most climate papers if I take the time to learn and understand the jargon as every subfield has
its own. it does take a good while with considerable effort. Climate science proclaims to know
with certainty what the climate future holds so they should be the experts on public policy that
will affect the lives of everyone in the world. "The totally convinced and the totally stupid
have too much in common for the resemblance to be accidental." Robert Anton Wilson
Economists writing about climate change purport to define the optimal reduction in greenhouse
gases by tallying up the avoided damage, or the benefit in the cost-benefit analysis, then saying
that costs of emission reduction should go no higher than this benefit. Not sure if they are still
doing this, but in the past they used the ethically questionable and benefit-lessening assumption
that lives in poor countries, where most people would die, should be valued much less than lives
in rich countries. Worse, the entire exercise is absurd because the result of the calculation
is an emissions reduction that could have no effect on the climate, because emissions don't have
a simple effect as with traditional air pollutants for which the analysis was initially developed.
As a generalist who works for and with a climate scientist who is at the forefront of his field
I am not able to understand essential details of most of his papers because he and his co-authors
are in fact physicists and their analyses involve substantially more than modest calculus. Furthermore
neither he nor any other of his colleagues whose work I am exposed to have proclaimed that they
"know" what the future holds.
At the UI and when I was at Michigan, they simply don't. Anything remotely like that would
be taught in the History department, and then mostly for History grad students.
At Cambridge University it was a compulsory course representing 25% of the first year curriculum
(this was 1991-92). No idea if it has been downsized since then but given the "new blood" I remember
entering the faculty I am pessimistic.
I have to agree that when I studied economics, it was theory and barely any practical exercises.
Lots of maximization and other But I never took this as gospel. I understood that all these economic models were a product
of their time. A framework that would be adapted by those in power to fit their needs.
When my son was born with a disability, I had to turn many 15 minute errands into 2 hour adventures.
It became even more evident that efficiency is relative What are we really maximizing anyway?
THAT is the key question.
I guess many graduate without any critical thinking. But I tend to think that many graduates
of economics like the way the world is set and feel no compulsion to change it.
yes, absolutely. If it is good public policy do it. When you think about it economics doesn't
really exist. Society does. And when economics is talked about like society doesn't exist it gets
pointless. Just like some stupid software language that does basically nothing. What we need is
the courage of our human convictions. I think it was Blyth in an early clip who said more or less,
"Just do it." Deficit spend as necessary and the solutions will appear. That's very Zen and I
love it. I mean, here's the question, What is the worst that can happen? If there is sufficient
money. Great interviewer and interviewee. Thanks NC for this post.
"Economics doesn't really exist, society does": a super obvious statement that stands in starkest
distinction to NeoLib ideology that insists we are all atomistic, isolated individuals. Math and
language are epiphenomena to human being that have perverted our self perception nearly to oblivion.
Bayes allows an entry to qualifying bias and uncertainty in conditional probabilities (tree
diagrams). It allows an indication that the source is b.s., which is currently relevant.
It's unnecessary in terms of fudging models, we've been quite capable of that without Bayesian
modifiers.
The most important bias his theorem clarifies concerns false positives, for example if a drug
test is 95% accurate it can still be wrong more than half the time on a positive response.
Economics wil never progress until it has a clearer grasp on the phenomenon of money. Until
they do it's the same old GIGO using Newtonian metaphors prettied up with math (or let us say
"arithmetic", since it's just basic calculus, linear algebra or probability/statistics).
Not to be demeaning toward Eigenvectors and matrix theory. It's amazing how recent that was
in the history of math - I mean all the way back to the Greeks, Pythagoras, Archimedes, etc. It's
like it's still brand new!
However, you could say a drawing by Rembrandt is just "basic pen and ink". Indeed on one level
it is. On another level it's an entire self-consistent and revelatory conceptualization of infinite
physical reality. That's the kind of holistic and syntheticistic ideation that economics sorely
lacks.
Not only does it lack this, but the economists don't even know it's there!
whoa you guys rock! that was faster than a New Yoarke minite. Whoa Yves would be proud. I hope
you get a bonus! maybe a few million dollars.
They're not this fast in Denver. That's for sure. All those TV people and all that money they
have and they fkk something up so bad they have to apologize. Wow. that really is screwing up.
Not only that, They're stilll pointing a camera straight at a scene and failing to use cinematic
story telling techniques invented , oh, 80 or 90 years ago!
There should be awards for excellence in fake news. The best fake news is news that's true
in the most profound and highest sense of reality. it's news that captures a truth reality only
approximates. It's hard to avoid Plato even when you try. I didn't mention him, OK? he's just
there. He's usually there, but if you mention him every time it gets boring.
The WaPo is an example of largely fake news written and published by individuals who don't
realize what's true and what's fake. You'd like to think they qualify for a fake news award, given
the fakeiness of what they write (except Redskins coverage which is very good, they have some
good spowtswriters for sure), but they don't because they think they're writing real news. That
should be embarrasing.
Well then, how would somebody advise them to better distinguish fake news from real news? Well,
how does a hawk know what to do to hunt rodents? There's no hawk scientist or hawk school or hawk
instruction manual. they can't even read! But they know exactly what to do. It's like that. Everybody
knows but they pretend to themselves they don't know. That's when the faking starts,
[T]he irony is that for many upper-middle-class white gay men, the argument became that
legal and economic (yes, economic) privileges of marriage were being denied. Fortunately, many
people were able to keep the focus on equality and equal protection of the law, which is political
argument.
On the one hand, yes, absolutely, and it remains a point of contention to this day in the gay
community that the one major victory in recent memory was perfectly amenable to a patriarchal,
capitalist order. People like David Brock and what have you, who saw gay liberation not as a means
to transform society, which is the purpose for which the GLF was created, but rather as a means
to help people like themselves become elites like anyone else.
On the other hand, and perhaps it's just the vulgar Marxist in me, but I recoil at the notion
of separating economics from politics. This is why the phrase political economy even exists, to
represent the notion that all decisions regarding distribution of resources are inherently political.
I find it symptomatic of how entirely defanged class rhetoric is in the US (though the interviewee
is British, I presume) that even the well meaning and critical thinking among us can get away
with pretending that "economics" can somehow be sequestered from political decisions.
I realize that's not the point you're making, but there are moments in the interview when the
subject moves in that direction. As for statistics, Mark Twain reminds us there are three kinds
of lies: lies, damned lies, and statisticsor, as my spouse is fond of saying, "70% of all statistics
are made up."
One place where social needs interfere with monetary policy, aka economics, is deficit spending
wherein the underlying economy is not keeping up (because of economic malpractice usually). So
that's a conflict against the oligarchy because they prevented the necessary jobs and so makes
their money worth less. So, depending which side you are on, politics should have a say (force
the government not to devalue the currency by inflation/deficit spending without a proper economy)
or politics should serve the chronically neglected needs of the general public regardless of preliminary
"inflation" the inflation here is the most dreaded form of inflation for the rich, of course,
wage inflation. I think the term 'wage inflation' qualifies as an oxymoron, but that's just me.
probably an apocryphal story;
so a guy is playing regularly in a rigged poker game. a friend asked him, "why do you play, you
know they're cheating you"? the guy shrugs, and replies "i don't have a choice, it's the only
game in town".
Interesting thing I heard the other day, Professor Richard Wolff says he studied economics
at three elite universities (Yale, Harvard, and another notable I cannot remember) and never had
a course in Karl Marx. Tunnel vision for sure in the field.
Yikes. I remember being taught Marx in the early 90s . But that was Cambridge ;-) and it was
clearly a dying course as they were struggling to find faculty members.
As one who is well past university age, I am excited to hear that those in the Millenial generation
are organizing this movement. The (intentional?) failure of K-12 education to develop critical
thinking skills and focus solely on standardized testing of fact knowledge has been deeply upsetting
to me as a parent. To see that others have made it through our education system with a well developed
BS detector and are not afraid to use it is welcome news.
I look forward to reading your books!
Answer to question no 2: The jargon that is being used these days by presidents, economists,
talk show hosts is beyond my understanding. I have a masters degree.
I believe Trump gained some
supporters who were angry about the disconnect with the way they talk and the way they needed
to be talked to. Simple language has its own good. That is what Trump did. Trump is just not a
person. There is more to Trump that what it is. He proved so many of these experts wrong and bought
back the simple language and easy straight talk to the forefront. Saying wrong things is attractive
to me. More people relate to Trump in ways that he can say bad things. I relate to him because
we say bad things in our every day life. We go about having a conversation after to correct them.
Its that simple.
After all we are all human beings with little better instincts and rational than animals. Just
because few people can speak politically correct, few can dress like they are supposed to doesn't
mean that every one has to conform. I am excited to read this book.
An argot
(English pronunciation: /ˈɑːrɡoʊ/; from French argot [aʁˈɡo] 'slang') is a secret language used
by various groups-e.g., schoolmates, outlaws, colleagues, among many others-to prevent outsiders
from understanding their conversations. The term argot is also used to refer to the informal specialized
vocabulary from a particular field of study, occupation, or hobby, in which sense it overlaps
with jargon.
Is the economics profession simply following the "He who has the gold, makes the rules"?
Many other professions service retail customers, such as attorneys and doctors. But how many ordinary citizens ever deal with an economist on any level?
While there may be some economists attached to labor unions, for the most part economists are
employed by government, the financial industry, academia or the media.
If paycheck dependent economists know that powerful politicians, wealthy corporate leaders
and wealthy donors in academia are looking over their shoulders, one could expect economists'
message to be justify what their "employers" want to do.
"Keen was formerly an associate professor of economics at University of Western Sydney, until
he applied for voluntary redundancy in 2013, due to the closure of the economics program at the
university.
But he did find another job. "In autumn 2014 he became a professor and Head of the School of Economics, History and Politics
at Kingston University in London." Is there a large job market for skeptical economists?
Nothing's changed in 100 + years. American Yale Professor Irving Fisher "financial transactions
aren't random": Yale Professor Irving Fisher 1920 2nd edition: "The Purchasing Power of Money"
"If the principles here advocated are correct, the purchasing power of money - or its reciprocal,
the level of prices - depends exclusively on five definite factors:
(1)the volume of money in circulation;
(2) its velocity of circulation;
(3) the volume of bank deposits subject to check;
(4) its velocity; and
(5) the volume of trade.
"Each of these five magnitudes is extremely definite, and their relation to the purchasing
power of money is definitely expressed by an "equation of exchange."
"In my opinion, the branch of economics which treats of these five regulators of purchasing
power ought to be recognized and ultimately will be recognized as an EXACT SCIENCE, capable of
precise formulation, demonstration, and statistical verification."
And the Fed already validated the Fisherian theory: In 1931 a commission was established on
member bank reserve requirements. The commission completed their recommendations after a 7 year
inquiry on Feb. 5, 1938. The study was entitled "Member Bank Reserve Requirements - Analysis of
Committee Proposal"
It's 2nd proposal: "Requirements against debits to deposits"
After a 45 year hiatus, this research paper was "declassified" on March 23, 1983. By the time
this paper was "declassified", required reserves had become a "tax" [sic].
Monetary flows, our means-of-payment money times its transactions velocity of circulation:
Here's my suggestion for educating economists about the fallacy of their assumption that it
is in any way acceptable or even meaningful to put a monetary price on a human life.
Step 1: we ask the economist to place a monetary value on his or her own life in the same way
that they feel so comfortable doing for people who are not them.
Step 2: crowdfund that amount of money.
Step 3: give said money to their next of kin and ask them to kindly follow us out to the woodshed
Ok, so let's call it a thought experiment .but I think that should make clear one
of the many, many things wrong with monetizing the value of everything in existence, as is the
common practice.
Step 1: we ask the economist to place a monetary value on his or her own life . . .
Priceless, or in economist's terms, infinity.
Step 2: crowdfund that amount of money.
Borrow from the Fed. It's fantasy money.
Step 3: give said money to their next of kin and ask them to kindly follow us out to the
woodshed
That would be cruel. They always claim they are the smartest guys in the room, while also claiming
men in manufacturing are low skill or put bluntly, stupid. Can we put them all on an uninhabited
island with a few shovels so they can live the civilized life and dig their own latrine, after
which they can bootstrap themselves to imagined wealth by inventing their own can opener? They
can get there by recycling the shovels, but they would need fire for that.
This interview articulates an extremely important insight when it states that the economy " is
believed to be a distinct system with its own logic that requires experts to manage it."
This seeming independence of the economic and political systems has largely deceived most of
modern social science. This seeming independence is not real, and in fact these spheres are deeply
intertwined.
As people llike Karl Polyani and Philip Mirowski have maintained, markets are always organized
through politics and institutions and one key to understanding this reality is to keep a focus
on the promulgation of the rules and regulations of a powerful state that helps to create movements
for both regulation and deregulation.
It is now imperative that an alternative political movement finally take the time to carefully
examine the nature and role of the State in political and economic life.
As a pre-med student of the mid 1970s, I never took an economics course. Professionally, I
tried to fight the same kind of jargon that baffles the lay public in medicine. And I watched
in horror how my profession became captured.
I struggle to read NC when reading jargon-filled posts. For example, I read about economic
cycles and wonder why that is an acceptable concept.
But I do so because I know that ignorance is not bliss. I know the economy is rigged. Orwellian
economics-speak allows the elite to configure human and social capital in their favor.
Is it time to throw this baby out with the bath water? If so, how do we conceive a baby that
doesn't eventually suckle at the wrong teat?
It was notable that Cathal failed to mention Marx. I don't think he realizes yet quite how fully indoctrinated he's been as that humdinger of
an analogy (gay marriage actually a redefinition to normalize surrogacy, a eugenics-by-stealth
agenda, hence it's enormous funding by the plutocracy) indicates. The economic can never be separated from the socio-political.
I think its more general than that. Those that have been airbrushed out of the history of economic
thought are those who never thought of economics as a separate, largely technocratic, discipline
but always as political economy. Marx was just one of these following the tradition of Smith,
Ricardo, Mill etc. Veblen and, to a large extent, Keynes were also following this tradition.
So sad that they lost and Walrasian physics envy ended up splitting economics from its political
context.
."how do you try to increase the accessibility of economics without watering it down so much
that it becomes analytically dysfunctional?"
This question makes no sense in the context of this discussion around the fact that modern
"economics" (theory, courses and practice) is an ideological construct. The suggestion being the
discipline as currently manifested would only become "analytically dysfunctional" if it were "watered
down" ??????
This simplistic, patently failed dogma has become an almost totalitarian "pensee unique" simply
because in coincided perfectly with the interests of the rich and powerful (and therefore those
of their lackeys)
It`s politics stupid!!!!!
Sorry, I realise the (exceptional!) core NC community knows all this as well as anyone
Another quibble. ?technocrats? At the height of the crisis, Italy, for example, had a govt
of "technocrats" foisted on the it. Monti, connections with Goldman?. Technocratic indeed!!!
The last couple of days I've been listening to a series of lectures by Philip Mirowski available
on youtube. When I place Mirowski's ideas in opposition to the ideas expressed in this interview
- the result is very different from the trend I see in the other comments here.
Mirowski describes how the "Neoliberal Economic thought collective" captured and now dominates
economic doctrine by controlling what and who can publish in the major economic journals. As a
result those aspects of Neoclassical Economics remaining are being re-shaped into a Neoliberal
mold. I noticed the word "neoliberal" doesn't show up anywhere in this post yet Neoliberal economic
policies and rationales dominate policy in the real world.
The discussion in the post makes several statements about how economics fails to make predictions
about the real world and fails in designing economic policies to help the common man. Mirowski
points out that Neoliberal economics designs policy to apply market models to every problem based
on the doctrine that markets are the most powerful information processing system available to
man - a strong form of the Efficient Markets Hypothesis. The Market is the ultimate epistemological
device. If the market solution doesn't satisfy the needs of the common man then satisfying those
needs is simply contrary to the wisdom of the market. For other problems like externalities they
just need to be properly incorporated into the market model to obtain an optimal solution to whatever
problem they present.
I don't see how "democratization" of economics teaching or eliminating jargon or deprecating
experts or more emphasis on critical thinking or pointing out the abject failure of economics
in solving economic problems will do much to counter the Neoliberal attack on the economics discipline.
Putting fins and flashy hubcaps on Neoclassical economics as it morphs into Neoliberal economics
is not the answer.
Its a hair ball that needs untangling and not a blowtorch thingy . If you are familiar with Philips past contributions to NC, his blog, social democracy blog
and other media portals you would have a better understanding of the perspective forwarded.
Disheveled . Mirowski does do service here wrt the fundamental methodology and how that frames
the topic, wrt base assumptions [human descriptors] and the extension of them.
The role of Economics is simple: it should inform people of the consequences of certain decisions
we make about who gets what. So if you have a problem with classical economics, you really have
a more fundamental problem. Economics provides many good answers; but don't expect it to also
provide the right questions. A comment above asked 'maximising what?'. Good question, but not
an economics question.
You are right, that is what it should be, unfortunately neoclassical has failed horribly in
that regard. It is based on assumptions that are demonstrably false and they are never revisited
to see the effect of relaxing them. You might as well be counting angels on a pin. See Roamer's
take down of it for starters. https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf
First Bush II bankrupted the country by cutting taxes for rich and unleashing Iraq war. Then
Republicans want to cut Social Securty to pay for it
Notable quotes:
"... His nominee to run the Department of Health and Human Services, Tom Price, a Republican congressman from Georgia, has been a champion of cuts to all three of the nation's large social programs - Medicare, Medicaid and Social Security. When discussing reforms to Social Security, he has ignored ways to bring new revenue into the system while emphasizing possible benefit cuts through means-testing, private accounts and raising the retirement age. ..."
"... But Mr. Price, who currently heads the House Budget Committee, has found a way to cut Social Security deeply without Congress and the president ever having to enact specific benefit cuts, like raising the retirement age. ..."
"... Mr. Trump's hands-off approach to Social Security during the campaign was partly a strategic gesture to separate him from other Republican contenders who stuck to the party line on cutting Social Security. But he also noted the basic fairness of a system in which people who dutifully contribute while they are working receive promised benefits when they retire. Unfortunately, he has not surrounded himself with people who will help him follow those instincts. ..."
Donald Trump campaigned on a promise not to cut Social Security, which puts him at odds with the
Republican Party's historical antipathy to the program and the aims of today's Republican leadership.
So it should come as no surprise that congressional Republicans are already testing Mr. Trump's hands-off
pledge.
... ... ...
As Congress drew to a close this month, Sam Johnson, the chairman of the House Social Security
subcommittee, introduced a bill that would slash Social Security benefits for all but the very poorest
beneficiaries. To name just two of the bill's benefit cuts, it would raise the retirement age to
69 and reduce the annual cost-of-living adjustment, while asking nothing in the way of higher taxes
to bolster the program; on the contrary, it would cut taxes that high earners now pay on a portion
of their benefits. Last week, Mark Meadows, the Republican chairman of the conservative House Freedom
Caucus, said the group would push for an overhaul of Social Security and Medicare in the early days
of the next Congress.
... ... ...
Another sensible reform would be to bring more tax revenue into the system by raising the level
of wages subject to Social Security taxes, currently $118,500. In recent decades, the wage cap has
not kept pace with the income gains of high earners; if it had, it would be about $250,000 today.
The next move on Social Security is Mr. Trump's. He can remind Republicans in Congress that his
pledge would lead him to veto benefit cuts to Social Security if such legislation ever reached his
desk. When he nominates the next commissioner of Social Security, he can choose a competent manager,
rather than someone who has taken sides in political and ideological debates over the program.
What Mr. Trump actually will do is unknown, but his actions so far don't inspire confidence. By law,
the secretaries of labor, the Treasury and health and human services are trustees of Social Security.
Mr. Trump's nominees to head two of these departments, Labor and Treasury - Andrew Puzder, a fast-food
executive, and Steve Mnuchin, a Wall Street trader and hedge fund manager turned Hollywood producer
- have no government experience and no known expertise on Social Security.
His nominee to run the Department of Health and Human Services, Tom Price, a Republican congressman
from Georgia, has been a champion of cuts to all three of the nation's large social programs - Medicare,
Medicaid and Social Security. When discussing reforms to Social Security, he has ignored ways to
bring new revenue into the system while emphasizing possible benefit cuts through means-testing,
private accounts and raising the retirement age.
There is no way to mesh those ideas with Mr. Trump's pledge. But Mr. Price, who currently
heads the House Budget Committee, has found a way to cut Social Security deeply without Congress
and the president ever having to enact specific benefit cuts, like raising the retirement age.
Recently, he put forth a proposal to reform the budget process by imposing automatic spending
cuts on most federal programs if the national debt exceeds specified levels in a given year. If Congress
passed Mr. Trump's proposed tax cut, for example, the ensuing rise in debt would trigger automatic
spending cuts that would slash Social Security by $1.7 trillion over 10 years, according to an analysis
by the Center for American Progress, a liberal think tank. This works out to a cut of $168 a month
on the average monthly benefit of $1,240. If other Trump priorities were enacted, including tax credits
for private real estate development and increases in military spending, the program cuts would be
even deeper.
Mr. Trump's hands-off approach to Social Security during the campaign was partly a strategic
gesture to separate him from other Republican contenders who stuck to the party line on cutting Social
Security. But he also noted the basic fairness of a system in which people who dutifully contribute
while they are working receive promised benefits when they retire. Unfortunately, he has not surrounded
himself with people who will help him follow those instincts.
Susan Anderson is a trusted commenter Boston 1 hour ago
There is a simple solution to Social Security.
Remove the cap, so it is not a regressive tax. After all, Republicans appear to be all for
a "flat" tax. Then lower the rate for everyone.
There is no reason why it should only be charged on the part of income that is needed to pay
for necessary expenses should as housing, food, medical care, transportation, school, communications,
and such. Anyone making more than the current "cap" is actually able to afford all this.
There is no reason the costs should be born only by those at the bottom of the income pyramid.
As for Republican looting, that's just despicable, and we'll hope they are wise enough to realize
that they shouldn't let government mess with people's Social Security!
Thomas Zaslavsky is a trusted commenter Binghamton, N.Y. 1 hour ago
The idea hinted in the editorial that Trump has any principle or instinct that would lead him
to protect benefits for people who are not himself or his ultra-wealthy class is not worthy of
consideration. No, Trump has none such and he will act accordingly. (Test my prediction at the
end of 2017 or even sooner; it seems the Republicans are champing at the bit to loot the government
and the country fro their backers.)
Christine McM is a trusted commenter Massachusetts 2 hours ago
I wouldn't hold Trump to any of his campaign promises, given how often he changes positions, backtracks,
changes subjects, or whatever. His biggest promise of all was to "drain the swamp" and we know
how that turned out.
He might have a cabinet of outsiders, but they are still creatures from outside swamps. That
said, if there is even the barest of hints that this is on the agenda, I can pretty much bet that
in two years, Congress will completely change parties.
Imagine: cutting benefits for people who worked all their lives and depend on that money in
older age, all in order to give the wealthiest Americans another huge tax cut. For a fake populist
like Trump, that might sound like a great idea (he has no fixed beliefs or principles) but to
his most ardent supporters, that might be the moment they finally get it: they fell for one of
the biggest cons in the universe.
Rita is a trusted commenter California 2 hours ago
Given the Republican desire to shut down Medicare and Social Security, it is not hard to predict
that they will do so a little at a time so that people will not notice until its too late.
But since the Republicans have been very upfront with hostility towards the social safety net,
one can conclude that their supporters want to eliminate social safety net.
Mary Ann Donahue is a trusted commenter NYS 2 hours ago
RE: "To name just two of the bill's benefit cuts, it would raise the retirement age to 69 and
reduce the annual cost-of-living adjustment..."
The COLA for 2017 is .03% a paltry average increase of $5 per month. There was no increase in
2016.
The formula for how the COLA is calculated needs to be changed to allow for fair increases
not reductions.
Mary Scott is a trusted commenter NY 4 hours ago
Republicans have been promising to "fix" Social Security for years and now we are seeing exactly
what they mean. We can see how low they're willing to stoop by their plan to cut the taxes that
high earners now pay on a portion of their benefits and decimate the program for everybody else.
I wouldn't be surprised if they raised SS taxes on low and middle income earners.
There has been an easy fix for Social Security for years. Simply raise the tax on income to
$250,000 thousand and retirees both present and future would be on much firmer footing. Many future
retirees will be moving on to Social Security without the benefit of defined pension plans and
will need a more robust SS benefit in the future, not a weaker one.
Don't count on Donald Trump to come to the rescue. He seems to hate any tax more than even
the most fervent anti-tax freak like Paul Ryan. Mr. Trump admitted throughout the campaign that
he avoids paying any tax at all.
The Times seems to want to give Mr. Trump limitless chances to do the right thing. "Will Donald
Trump Cave on Social Security" it asks. Of course he will. One has only to look at his cabinet
choices and his embrace of the Ryan budget to know the answer to that question. Better to ask,
"How Long Will It Take Trump To Destroy Social Security?"
At least it would be an honest question and one that would put Mr. Trump in the center of a
question that will affect the economic security of millions of Americans.
serban is a trusted commenter Miller Place 4 hours ago
Cutting benefits for upper income solves nothing since by definition upper incomes are a small
percentage of the population. The obvious way to solve any problem with SS is to raise taxes on
upper incomes, the present cap is preposterous. People so wealthy that SS is a pittance can show
their concern by simply donating the money they get from SS to charities.
david is a trusted commenter ny 4 hours ago
We can get some perspective on what Social Security privatization schemes would mean to the
average SSS recipient from Roger Lowenstein' analysis of Bush's privatization scheme.
Roger Lowenstein's Times article discusses the CBO's analysis of how the Bush privatization
scheme for Social Security would reduce benefits.
"The C.B.O. assumes that the typical worker would invest half of his allocation in stocks
and the rest in bonds. The C.B.O. projects the average return, after inflation and expenses,
at 4.9 percent. This compares with the 6 percent rate (about 3.5 percent after inflation) that
the trust fund is earning now.
The second feature of the plan would link future benefit increases
to inflation rather than to wages. Because wages typically grow faster, this would mean a rather
substantial benefit cut. In other words, absent a sustained roaring bull market, the private
accounts would not fully make up for the benefit cuts. According to the C.B.O.'s analysis,
which, like all projections of this sort should be regarded as a best guess, a low-income retiree
in 2035 would receive annual benefits (including the annuity from his private account) of $9,100,
down from the $9,500 forecast under the present program. A median retiree would be cut severely,
from $17,700 to $13,600. "
"... Shorter Paul Krugman: nobody acted more irresponsibly in the last election than the New York Times. ..."
"... Looks like Putin recruited the NYT, the FBI and the DNC. ..."
"... Dr. Krugman is feeding this "shoot first, ask questions later" mentality. He comes across as increasingly shrill and even unhinged - it's a slide he's been taking for years IMO, which is a big shame. ..."
"... It is downright irresponsible and dangerous for a major public intellectual with so little information to cast the shadow of legitimacy on a president ("And it means not acting as if this was a normal election whose result gives the winner any kind of a mandate, or indeed any legitimacy beyond the bare legal requirements.") This kind of behavior is EXACTLY what TRUMP and other authoritarians exhibit - using pieces of information to discredit institutions and individuals. Since foreign governments have and will continue to try to influence U.S. policy through increasingly sophisticated means, this opens the door for anyone to declare our elections and policies as illegitimate in the future. ..."
"... Any influence Russian hacking had was entirely a consequence of U.S. media obsession with celebrity, gotcha and horse race trivia and two-party red state/blue state tribalism. ..."
"... Without the preceding, neither Trump nor Clinton would have been contenders in the first place. Putin didn't invent super delegates, Citizens United, Fox News, talk radio, Goldman-Sachs, etc. etc. etc. If Putin exploited vulnerabilities, it is because preserving those vulnerabilities was more important to the elites than fostering a democratic political culture. ..."
"... It's not a "coup". It's an election result that didn't go the way a lot of people want. That's it. It's probably not optimal, but I'm pretty sure that democracy isn't supposed to produce optimal results. ..."
"... All this talk about "coups" and "illegitimacy" is nuts, and -- true to Dem practice -- incredibly short-sighted. For many, voting for Trump was an available way to say to those people, "We don't believe you any more. At all." Seen in that light, it is a profoundly democratic (small 'd') response to elites that have most consistently served only themselves. ..."
"... Post Truth is Pre-Fascism. The party that thinks your loyalty is suspect unless you wear a flag pin fuels itself on Post Truth. Isnt't this absurdity the gist of Obama's Russia comments today!?! ..."
"... Unless the Russians or someone else hacked the ballot box machines, it is our own damn fault. ..."
"... The ship of neo-liberal trade sailed in the mid-2000's. That you don't get that is sad. You can only milk that so far the cow had been milked. ..."
"... The people of the United States did not have much to choose between: Either a servant of the Plutocrats or a member of the Plutocratic class. The Dems brought this on us when they refused to play fair with Bernie. (Hillary would almost certainly have won the nomination anyway.) ..."
"... The Repubs brought this on, by refusing to govern. The media brought this on: I seem to remember Hillary's misfeasances, once nominated, festering in the media, while Trump's were mentioned, and then disappeared. (Correct me if I'm wrong in this.) Also, the media downplayed Bernie until he had no real chance. ..."
"... The government brought this on, by failing to pursue justice against the bankers, and failing to represent the people, especially the majority who have been screwed by trade and the plutocratic elite and their apologists. ..."
"... The educational system brought this on, by failing to educate the people to critical thought. For instance: 1) The wealthy run the country. 2) The wealthy have been doing very well. 3) Everybody else has not. It seems most people cannot draw the obvious conclusion. ..."
"... Krugman is himself one of those most useful idiots. I do not recall his clarion call to Democrats last spring that "FBI investigation" and "party Presidential nominee" was bound to be an ugly combination. Some did; right here as I recall. Or his part in the official "don't vote for third party" week in the Clinton media machine....thanks, hundreds of thousands of Trump votes got the message. ..."
"... It's too rich to complain about Russia and Wikileaks as if those elements in anyway justified Clinton becoming President. Leaks mess with our democracy? Then for darn sure do not vote for a former Sec. of State willing to use a home server for her official business. Russia is menacing? Just who has been managing US-Russia relations the past 8 years? I voted for her anyway, but the heck if I think some tragic fate has befell the nation here. Republicans picked a better candidate to win this thing than we Democrats did. ..."
"... The truth of the matter is that Clinton was a very weak candidate with nothing to offer but narcissism ("I'm with her"). It's notable that Clinton has still not accepted responsibility for her campaign, preferring to throw the blame for the loss anywhere but herself. Sociopathy much? ..."
[ I find it terrifying, simply terrifying, to refer to people as "useful idiots" after all
the personal destruction that has followed when the expression was specifically used in the past.
To me, using such an expression is an honored economist intent on becoming Joseph McCarthy.
]
To demean a person as though the person were a communist or a fool of communists or the like,
with all the personal harm that has historically brought in this country, is cruel beyond my understanding
or imagining.
Well, not really. For example he referred to "the close relationship between Wikileaks and Russian
intelligence." But Wikileaks is a channel. They don't seek out material. They rely on people to
bring material to them. They supposedly make an effort to verify that the material is not a forgery,
but aside from that what they release is what people bring to them. Incidentally, like so many
people you seem to not care whether the material is accurate or not -- Podesta and the DNC have
not claimed that any of the emails are different from what they sent.
ZURICH - If Putin the Thug gets away with crushing Ukraine's new democratic experiment and
unilaterally redrawing the borders of Europe, every pro-Western country around Russia will be
in danger....
Yup, like the other elections, the bases stayed solvent and current events factored into the turnout
and voting patterns which spurred the independent vote.
When people were claiming Clinton was going to win big, I thought no Republican and Democratic
voters are going to pull the lever like a trained monkey as usual. Only difference in this election
was Hillary's huge negatives due entirely by her and Bill Clinton's support for moving manufacturing
jobs to Mexico and China in the 90s.
To Understand Trump, Learn Russian http://nyti.ms/2hLcrB1
NYT - Andrew Rosenthal - December 15
The Russian language has two words for truth - a linguistic quirk that seems relevant to our
current political climate, especially because of all the disturbing ties between the newly elected
president and the Kremlin.
The word for truth in Russian that most Americans know is "pravda" - the truth that seems evident
on the surface. It's subjective and infinitely malleable, which is why the Soviet Communists called
their party newspaper "Pravda." Despots, autocrats and other cynical politicians are adept at
manipulating pravda to their own ends.
But the real truth, the underlying, cosmic, unshakable truth of things is called "istina" in
Russian. You can fiddle with the pravda all you want, but you can't change the istina.
For the Trump team, the pravda of the 2016 election is that not all Trump voters are explicitly
racist. But the istina of the 2016 campaign is that Trump's base was heavily dependent on racists
and xenophobes, Trump basked in and stoked their anger and hatred, and all those who voted for
him cast a ballot for a man they knew to be a racist, sexist xenophobe. That was an act of racism.
Trump's team took to Twitter with lightning speed recently to sneer at the conclusion by all
17 intelligence agencies that the Kremlin hacked Democratic Party emails for the specific purpose
of helping Trump and hurting Hillary Clinton. Trump said the intelligence agencies got it wrong
about Iraq, and that someone else could have been responsible for the hack and that the Democrats
were just finding another excuse for losing.
The istina of this mess is that powerful evidence suggests that the Russians set out to interfere
in American politics, and that Trump, with his rejection of Western European alliances and embrace
of Russia's invasion of Ukraine, was their chosen candidate.
The pravda of Trump's selection of Rex Tillerson, head of Exxon Mobil, as secretary of state
is that by choosing an oil baron who has made billions for his company by collaborating with Russia,
Trump will make American foreign policy beholden to American corporate interests.
That's bad enough, but the istina is far worse. For one thing, American foreign policy has
been in thrall to American corporate interests since, well, since there were American corporations.
Just look at the mess this country created in Latin America, the Caribbean, Southeast Asia and
the Middle East to serve American companies.
Yes, Tillerson has ignored American interests repeatedly, including in Russia and Iraq, and
has been trying to remove sanctions imposed after Russia's seizure of Crimea because they interfered
with one of his many business deals. But take him out of the equation in the Trump cabinet and
nothing changes. Trump has made it plain, with every action he takes, that he is going to put
every facet of policy, domestic and foreign, at the service of corporate America. The istina here
is that Tillerson is just a symptom of a much bigger problem.
The pravda is that Trump was right in saying that the intelligence agencies got it wrong about
Saddam Hussein and weapons of mass destruction.
But the istina is that Trump's contempt for the intelligence services is profound and dangerous.
He's not getting daily intelligence briefings anymore, apparently because they are just too dull
to hold his attention.
And now we know that Condoleezza Rice was instrumental in bringing Tillerson to Trump's attention.
As national security adviser and then secretary of state for president George W. Bush, Rice was
not just wrong about Iraq, she helped fabricate the story that Hussein had nuclear weapons.
Trump and Tillerson clearly think they are a match for the wily and infinitely dangerous Putin,
but as they move foward with their plan to collaborate with Russia instead of opposing its imperialist
tendencies, they might keep in mind another Russian saying, this one from Lenin.
"There are no morals in politics; there is only expedience," he wrote. "A scoundrel may be
of use to us just because he is a scoundrel."
Putin has that philosophy hard-wired into his political soul. When it comes to using scoundrels
to get what he wants, he is a professional, and Trump is only an amateur. That is the istina of
the matter.
If nothing else, Russia - with a notably un-free press - has shrewdly used our own 'free press'
against US.
RUSSIA'S UNFREE PRESS
The Boston Globe - Marshall Goldman - January 29, 2001
AS THE BUSH ADMINISTRATION DEBATES ITS POLICY TOWARD RUSSIA, FREEDOM OF THE PRESS SHOULD BE
ONE OF ITS MAJOR CONCERNS. UNDER PRESIDENT VLADIMIR PUTIN THE PRESS IS FREE ONLY AS LONG AS IT
DOES NOT CRITICIZE PUTIN OR HIS POLICIES. WHEN NTV, THE TELEVISION NETWORK OF THE MEDIA GIANT
MEDIA MOST, REFUSED TO PULL ITS PUNCHES, MEDIA MOST'S OWNER, VLADIMIR GUSINSKY, FOUND HIMSELF
IN JAIL, AND GAZPROM, A COMPANY DOMINATED BY THE STATE, BEGAN TO CALL IN LOANS TO MEDIA MOST.
Unfortunately, Putin's actions are applauded by more than 70 percent of the Russian people. They
crave a strong and forceful leader; his KGB past and conditioned KGB responses are just what they
seem to want after what many regard as the social, political, and economic chaos of the last decade.
But what to the Russians is law and order (the "dictatorship of the law," as Putin has so accurately
put it) looks more and more like an old Soviet clampdown to many Western observers.
There is no complaint about Putin's promises. He tells everyone he wants freedom of the press.
But in the context of his KGB heritage, his notion of freedom of the press is something very different.
In an interview with the Toronto Globe and Mail, he said that that press freedom excludes the
"hooliganism" or "uncivilized" reporting he has to deal with in Moscow. By that he means criticism,
especially of his conduct of the war in Chechnya, his belated response to the sinking of the Kursk,
and the heavy-handed way in which he has pushed aside candidates for governor in regional elections
if they are not to Putin's liking.
He does not take well to criticism. When asked by the relatives of those lost in the Kursk
why he seemed so unresponsive, Putin tried to shift the blame for the disaster onto the media
barons, or at least those who had criticized him. They were the ones, he insisted, who had pressed
for reduced funding for the Navy while they were building villas in Spain and France. As for their
criticism of his behavior, They lie! They lie! They lie!
Our Western press has provided good coverage of the dogged way Putin and his aides have tried
to muscle Gusinsky out of the Media Most press conglomerate he created. But those on the Putin
enemies list now include even Boris Berezovsky, originally one of Putin's most enthusiastic promoters
who after the sinking of the Kursk also became a critic and thus an opponent.
Gusinsky would have a hard time winning a merit badge for trustworthiness (Berezovsky shouldn't
even apply), but in the late Yeltsin and Putin years, Gusinsky has earned enormous credit for
his consistently objective news coverage, including a spotlight on malfeasance at the very top.
More than that, he has supported his programmers when they have subjected Yeltsin and now Putin
to bitter satire on Kukly, his Sunday evening prime-time puppet show.
What we hear less of, though, is what is happening to individual reporters, especially those
engaged in investigative work. Almost monthly now there are cases of violence and intimidation.
Among those brutalized since Putin assumed power are a reporter for Radio Liberty who dared to
write negative reports about the Russian Army's role in Chechnia and four reporters for Novaya
Gazeta. Two of them were investigating misdeeds by the FSB (today's equivalent of the KGB), including
the possibility that it rather than Chechins had blown up a series of apartment buildings. Another
was pursuing reports of money-laundering by Yeltsin family members and senior staff in Switzerland.
Although these journalists were very much in the public eye, they were all physically assaulted.
Those working for provincial papers labor under even more pressure with less visibility. There
are numerous instances where regional bosses such as the governor of Vladivostok operate as little
dictators, and as a growing number of journalists have discovered, challenges are met with threats,
physical intimidation, and, if need be, murder.
True, freedom of the press in Russia is still less than 15 years old, and not all the country's
journalists or their bosses have always used that freedom responsibly. During the 1996 election
campaign, for example, the media owners, including Gusinsky conspired to denigrate or ignore every
viable candidate other than Yeltsin. But attempts to muffle if not silence criticism have multiplied
since Putin and his fellow KGB veterans have come to power. Criticism from any source, be it an
individual journalist or a corporate entity, invites retaliation.
When Media Most persisted in its criticism, Putin sat by approvingly as his subordinates sent
in masked and armed tax police and prosecutors. When that didn't work, they jailed Gusinsky on
charges that were later dropped, although they are seeking to extradite and jail him again. along
with his treasurer, on a new set of charges. Yesterday the prosecutor general summoned Tatyana
Mitkova, the anchor of NTV's evening news program, for questioning. Putin's aides are also doing
all they can to prevent Gusinsky from refinancing his debt-ridden operation with Ted Turner or
anyone else in or outside of the country.
According to one report, Putin told one official, You deal with the shares, debts, and management
and I will deal with the journalists. His goal simply is to end to independent TV coverage in
Russia. ...
"Unfortunately, Putin's actions are applauded by more than 70 percent of the Russian people"
Exactly; the majority of people are so stupid and/or lazy that they cannot be bothered understanding
what is going on; and how their hard won democracy is being subjugated. But thank God that is
in Russia not here in the US - right?
"Pravda" is etymologically derived from "prav-" which means "right" (as opposed to "left", other
connotations are "proper", "correct", "rightful", also legal right). It designates the social-construct
aspect of "righteousness/truthfulness/correctness" as opposed to "objective reality" (conceptually
independent of social standards, in reality anything but). In formal logic, "istina" is used to
designate truth. Logical falsity is designated a "lie".
It is a feature common to most European languages that rightfulness, righteousness, correctness,
and legal rights are identified with the designation for the right side. "Sinister" is Latin for
"left".
If you believe 911 was a Zionist conspiracy, so where the Paris attacks of November 2015, when
Trump was failing in the polls as the race was moving toward as you would expect, toward other
candidates. After the Paris attacks, his numbers reaccelerated.
If "ZOG" created the "false flag" of the Paris attacks to start a anti-Muslim fervor, they
succeeded, much like 911. Bastille day attacks were likewise, a false flag. This is not new, this
goes back to when the aristocracy merged with the merchant caste, creating the "bourgeois". They
have been running a parallel government in the shadows to effect what is seen.
There used to be something called Usenet News, where at the protocol level reader software could
fetch meta data (headers containing author, (stated) origin, title, etc.) independently from comment
bodies. This was largely owed to limited download bandwidth. Basically all readers had "kill files"
i.e. filters where one could configure that comments with certain header parameters should not
be downloaded, or even hidden.
The main application was that the reader would download comments in the background when headers
were already shown, or on demand when you open a comment.
Now you get the whole thing (or in units of 100) by the megabyte.
A major problem is signal extraction out of the massive amounts of noise generated by the media,
social media, parties, and pundits.
It's easy enough to highlight this thread of information here, but in real time people are
being bombarded by so many other stories.
In particular, the Clinton Foundation was also regularly being highlighted for its questionable
ties to foreign influence. And HRC's extravagant ties to Wall St. And so much more.
The media's job was to sell Trump and denounce Clinton. The mistake a lot of people make is thinking
the global elite are the "status quo". They are not. They are generally the ones that break the
status quo more often than not.
The bulk of them wanted Trump/Republican President and made damn sure it was President. Buffering
the campaign against criticism while overly focusing on Clinton's "crap". It took away from the
issues which of course would have low key'd the election.
Not much bullying has to be applied when there are "economic incentives". The media attention
economy and ratings system thrive on controversy and emotional engagement. This was known a century
ago as "only bad news is good news". As long as I have lived, the non-commercial media not subject
(or not as much) to these dynamics have always been perceived as dry and boring.
I heard from a number of people that they followed the campaign "coverage" (in particular Trump)
as gossip/entertainment, and those were people who had no sympathies for him. And even media coverage
by outlets generally critical of Trump's unbelievable scandals and outrageous performances catered
to this sentiment.
First, let me disclose that I detest TRUMP and that the Russian meddling has me deeply concerned.
Yet...
We only have assertions that the Russian hacking had some influence. We do not know whether
it likely had *material* influence that could have reasonably led to a swing state(s) going to
TRUMP that otherwise would have gone to HRC.
Dr. Krugman is feeding this "shoot first, ask questions later" mentality. He comes across
as increasingly shrill and even unhinged - it's a slide he's been taking for years IMO, which
is a big shame.
It is downright irresponsible and dangerous for a major public intellectual with so little
information to cast the shadow of legitimacy on a president ("And it means not acting as if this
was a normal election whose result gives the winner any kind of a mandate, or indeed any legitimacy
beyond the bare legal requirements.") This kind of behavior is EXACTLY what TRUMP and other authoritarians
exhibit - using pieces of information to discredit institutions and individuals. Since foreign
governments have and will continue to try to influence U.S. policy through increasingly sophisticated
means, this opens the door for anyone to declare our elections and policies as illegitimate in
the future.
It is quite clear that the Russians intervened on Trump's behalf and that this intervention had
an impact. The problem is that we cannot actually quantify that impact.
"We only have assertions that the Russian hacking had some influence."
Any influence Russian hacking had was entirely a consequence of U.S. media obsession with
celebrity, gotcha and horse race trivia and two-party red state/blue state tribalism.
Without the preceding, neither Trump nor Clinton would have been contenders in the first
place. Putin didn't invent super delegates, Citizens United, Fox News, talk radio, Goldman-Sachs,
etc. etc. etc. If Putin exploited vulnerabilities, it is because preserving those vulnerabilities
was more important to the elites than fostering a democratic political culture.
But this is how influence is exerted - by using the dynamics of the adversary's/targets organization
as an amplifier. Hierarchical organizations are approached through their management or oversight
bodies, social networks through key influencers, etc.
I see this so much and it's so right wing cheap: I hate Trump, but assertions that Russia intervened
are unproven.
First, Trump openly invited Russia to hack DNC emails. That is on its face treason and sedition.
It's freaking on video. If HRC did that there would be calls of the right for her execution.
Second, a NYT story showed that the FBI knew about the hacking but did not alert the DNC properly
- they didn't even show up, they sent a note to a help desk.
This was a serious national security breach that was not addressed properly. This is criminal
negligence.
This was a hacked election by collusion of the FBI and the Russian hackers and it totally discredits
the FBI as it throwed out chum and then denied at the last minute. Now the CIA comes in and says
PUTIN, Trump's bff, was directly involved in manipulating the timetable that the hacked emails
were released in drip drip form to cater to the media - creating story after story about emails.
It was a perfect storm for a coup. Putin played us. And he will play Trump. And God knows how
it ends. But it doesn't matter b/c we're all screwed with climate change anyway.
"It was a perfect storm for a coup. Putin played us. And he will play Trump. And God knows how
it ends. But it doesn't matter b/c we're all screwed with climate change anyway."
It's not a "coup". It's an election result that didn't go the way a lot of people want.
That's it. It's probably not optimal, but I'm pretty sure that democracy isn't supposed to produce
optimal results.
All this talk about "coups" and "illegitimacy" is nuts, and -- true to Dem practice --
incredibly short-sighted. For many, voting for Trump was an available way to say to those people,
"We don't believe you any more. At all." Seen in that light, it is a profoundly democratic (small
'd') response to elites that have most consistently served only themselves.
Trump and his gang will be deeply grateful if the left follows Krugman's "wisdom", and clings
to his ever-changing excuses. (I thought it was the evil Greens who deprived Clinton of her due?)
Post Truth is Pre-Fascism. The party that thinks your loyalty is suspect unless you wear a
flag pin fuels itself on Post Truth. Isnt't this absurdity the gist of Obama's Russia comments
today!?!
"On Wednesday an editorial in The Times described Donald Trump as a "useful idiot" serving Russian
interests." I think that is beyond the pale. Yes, I realize that Adolph Hitler was democratically
elected. I agree that Trump seems like a scary monster under the bed. That doesn't mean we have
too pee our pants, Paul. He's a bully, tough guy, maybe, the kind of kid that tortured you before
you kicked the shit out of them with your brilliance. That's not what is needed now.
What really is needed, is a watchdog, like Dean Baker, that alerts we dolts of pending bills and
their ramifications. The ship of neo-liberal trade bullshit has sailed. Hell, you don't believe
it yourself, you've said as much. Be gracious, and tell the truth. We can handle it.
The experience of voting for the Hill was painful, vs Donald Trump.
The Hill seemed like the least likely aristocrat, given two choices, to finish off all government
focus on the folks that actually built this society. Two Titans of Hubris, Hillary vs Donald,
each ridiculous in the concept of representing the interests of the common man.
At the end of the day. the American people decided that the struggle with the unknown monster
Donald was worth deposing the great deplorable, Clinton.
The real argument is whether the correct plan of action is the way of FDR, or the way of the industrialists,
the Waltons, the Kochs, the Trumps, the Bushes and the outright cowards like the Cheneys and the
Clintons, people that never spent a day defending this country in combat. What do they call it,
the Commander in Chief.
My father was awarded a silver and a bronze star for his efforts in battle during WW2. He was
shot in the face while driving a tank destroyer by a German sniper in a place called Schmitten
Germany.
He told me once, that he looked over at the guy next to him on the plane to the hospital in
England, and his intestines were splayed on his chest. It was awful.
What was he fighting for ? Freedom, America. Then the Republicans, Ronald Reagan, who spent the
war stateside began the real war, garnering the wealth of the nation to the entitled like him.
Ronald Reagan was a life guard.
Anthony Weiner
Podesta
Biden (for not running)
Tim Kaine (for accepting the nomination instead of deferring to a latino)
CNN and other TV news media (for giving trump so much coverage- even an empty podium)
Donna Brazile
etc.
The people of the United States did not have much to choose between: Either a servant of the
Plutocrats or a member of the Plutocratic class. The Dems brought this on us when they refused
to play fair with Bernie. (Hillary would almost certainly have won the nomination anyway.)
The Repubs brought this on, by refusing to govern. The media brought this on: I seem to
remember Hillary's misfeasances, once nominated, festering in the media, while Trump's were mentioned,
and then disappeared. (Correct me if I'm wrong in this.) Also, the media downplayed Bernie until
he had no real chance.
The government brought this on, by failing to pursue justice against the bankers, and failing
to represent the people, especially the majority who have been screwed by trade and the plutocratic
elite and their apologists.
The educational system brought this on, by failing to educate the people to critical thought.
For instance: 1) The wealthy run the country. 2) The wealthy have been doing very well. 3) Everybody
else has not. It seems most people cannot draw the obvious conclusion.
The wealthy brought this on. For 230 years they have, essentially run this country. They are
too stupid to be satisfied with enough, but always want more.
The economics profession brought this on, by excusing treasonous behavior as efficient, and
failing to understand the underlying principles of their profession, and the limits of their understanding.
(They don't even know what money is, or how a trade deficit destroys productive capacity, and
thus the very ability of a nation to pay back the debts it incurs.)
The people brought this on, by neglecting their duty to be informed, to be educated, and to
be thoughtful.
Anybody else care for their share of blame? I myself deserve some, but for reasons I cannot
say.
What amazes me now is, the bird having shown its feathers, there is no howl of outrage from
the people who voted for him. Do they imagine that the Plutocrats who will soon monopolize the
White House will take their interests to heart?
As far as I can tell, not one person of 'the people' has been appointed to his cabinet. Not
one. But the oppressed masses who turned to Mr Trump seem to be OK with this.
I can only wonder, how much crap will have to be rubbed in their faces, before they awaken to
the taste of what it is?
Eric377 : , -1
Krugman is himself one of those most useful idiots. I do not recall his clarion call to Democrats
last spring that "FBI investigation" and "party Presidential nominee" was bound to be an ugly
combination. Some did; right here as I recall. Or his part in the official "don't vote for third
party" week in the Clinton media machine....thanks, hundreds of thousands of Trump votes got the
message.
It's too rich to complain about Russia and Wikileaks as if those elements in anyway justified
Clinton becoming President. Leaks mess with our democracy? Then for darn sure do not vote for
a former Sec. of State willing to use a home server for her official business. Russia is menacing?
Just who has been managing US-Russia relations the past 8 years? I voted for her anyway, but the
heck if I think some tragic fate has befell the nation here. Republicans picked a better candidate
to win this thing than we Democrats did.
The truth of the matter is that Clinton was a very weak candidate with nothing to offer
but narcissism ("I'm with her"). It's notable that Clinton has still not accepted responsibility
for her campaign, preferring to throw the blame for the loss anywhere but herself. Sociopathy
much?
This has made me cynical. I used to think that at least *some* members of the US political
elite had the best interests of ordinary households in mind, but now I see that it's just ego
vs. ego, whatever the party.
As for democracy being on the edge: I believe Adam Smith over Krugman: "there is a lot of ruin
in a nation". It takes more than this to overturn an entrenched institution.
I think American democracy will survive a decade of authoritarianism, and if it does not, then
H. L. Mencken said it best: "The American people know what they want, and they deserve to get
it -- good and hard."
Donald Trump won the electoral college at least in part by promising to bring coal jobs
back to Appalachia and manufacturing jobs back to the Rust Belt. Neither promise can be honored
for the most part we're talking about jobs lost, not to unfair foreign competition, but to
technological change. But a funny thing happens when people like me try to point that out:
we get enraged responses from economists who feel an affinity for the working people of the
afflicted regions responses that assume that trying to do the numbers must reflect contempt
for regional cultures, or something.
Is this the right narrative? I am no longer comfortable with this line:
for the most part we're talking about jobs lost, not to unfair foreign competition, but
to technological change.
Try to place that line in context with this from
Noah Smith:
Then, in the 1990s and 2000s, the U.S opened its markets to Chinese goods, first with Most
Favored Nation trading status, and then by supporting China's accession to the WTO. The resulting
competition from cheap Chinese goods contributed to vast inequality in the United States, reversing
many of the employment gains of the 1990s and holding down U.S. wages. But this sacrifice on
the part of 90% of the American populace enabled China to lift its enormous population out
of abject poverty and become a middle-income country.
Was this "fair" trade? I think not. Let me suggest this narrative: Sometime during the
Clinton Administration, it was decided that an economically strong China was good for both the
globe and the U.S. Fair enough. To enable that outcome, U.S. policy deliberately sacrificed manufacturing
workers on the theory that a.) the marginal global benefit from the job gain to a Chinese worker
exceeded the marginal global cost from a lost US manufacturing job, b.) the U.S. was shifting
toward a service sector economy anyway and needed to reposition its workforce accordingly and
c.) the transition costs of shifting workers across sectors in the U.S. were minimal.
As a consequence and through a succession of administrations the US tolerated implicit
subsidies of Chinese industries, including national industrial policy designed to strip production
from the US.
And then there was the currency manipulation. I am always shocked when international economists
claim "fair trade," pretending that the financial side of the international accounts is irrelevant.
As if that wasn't a big, fat thumb on the scale. Sure, "currency manipulation" is running the
other way these days. After, of course, a portion of manufacturing was absorbed overseas. After
the damage is done.
Yes, technological change is happening. But the impact, and the costs, were certainly accelerated
by U.S. policy.
It was a great plan. On paper, at least. And I would argue that in fact points a and b above
were correct.
But point c. Point c was a bad call. Point c was a disastrous call. Point c helped deliver
Donald Trump to the Oval Office. To be sure, the FBI played its role, as did the Russians. But
even allowing for the poor choice of Hilary Clinton as the Democratic nominee (the lack of contact
with rural and semi-rural voters blinded the Democrats to the deep animosity toward their candidate),
it should never have come to this.
As the opioid epidemic sweeps through rural America, an ever-greater number of drug-dependent
newborns are straining hospital neonatal units and draining precious medical resources.
The problem has grown more quickly than realized and shows no signs of abating, researchers
reported on Monday. Their study, published in JAMA Pediatrics, concludes for the first time
that the increase in drug-dependent newborns has been disproportionately larger in rural areas.
The latest causalities in the opioid epidemic are newborns.
The transition costs were not minimal.
My take is that "fair trade" as practiced since the late 1990s created another disenfranchised
class of citizens. As if we hadn't done enough of that already. Then we weaponized those newly
disenfranchised citizens with the rhetoric of identity politics. That's coming back to bite us.
We didn't really need a white nationalist movement, did we?
Now comes the big challenge: What can we do to make amends? Can we change the narrative? And
here is where I agree with Paul Krugman:
Now, if we want to have a discussion of regional policies an argument to the effect that
my pessimism is unwarranted fine. As someone who is generally a supporter of government activism,
I'd actually like to be convinced that a judicious program of subsidies, relocating government
departments, whatever, really can sustain communities whose traditional industry has eroded.
The damage done is largely irreversible. In medium-size regions, lower relative housing
costs may help attract overflow from the east and west coast urban areas. And maybe a program
of guaranteed jobs for small- to medium-size regions combined with relocation subsidies for very
small-size regions could help. But it won't happen overnight, if ever. And even if you could reverse
the patterns of trade which wouldn't be easy given the intertwining of global supply chains
the winners wouldn't be the same current losers. Tough nut to crack.
Bottom Line: I don't know how to fix this either. But I don't absolve the policy community
from their role in this disaster. I think you can easily tell a story that this was one big policy
experiment gone terribly wrong.
Basic point is that when interest rates are rising, longer-term bonds
suffer capital losses. Duration (a weighted average of when the coupon
payments and the final principal payment are received) allows comparing
the interest rate sensitivity of different bonds.
An example of "shedding duration" would be selling 10-year Treasuries
and buying 2-year Treasuries. For a graphic example of how much harder
the 10-year has been hit than the 2-year, check the charts for IEF (7-10
year Treasuries) and SHY (1-3 year Treasuries).
IEF has lost about 9 percent since last July, while SHY fell a little
over 1 percent. Both funds pay monthly dividends, which added about 0.7%
to IEF's total return over the period, while SHY's dividends added about
0.35% to its total return.
IEF's capital loss since July represents 4-1/2 years of interest
earnings.
Well, it's a new month. And Treasuries are getting their daily
ritual beating, as the 10-year T-note - at 2.46% - seems pulled
upward toward the 2.50% round number strange attractor. Ten-year
yield chart:
Despite having an instinctive feeling that this bond bashing is
overdone, my bond model says "Take shelter in the short end"
(meaning T-bills and the like).
Well here's the problem, now regulatory issues prevent The Street from
warehousing any large inventories, so how is a poor asset manager going to
shed their duration?
Not a complete story in my professional experience. Most of the really
long stuff is held by institutions (pensions, supranationals, and insurance
companies) with the capability to hedge and interest rate hedges are
generally cheap and efficient. These players don't have hair triggers on
their underlying holdings, particularly corporates that have value if the
economy is expected to pick up. And lots of institutions and retail
investors stayed short because the rise in rates has been telegraphed. Now,
after rates have risen, some of those investors are extending and buying
longer bonds with higher yields; so there is a two way market in that longer
paper. All this said, it is likely that the Street would struggle mightily
to digest real institutional selling, particularly in the event of a genuine
credit event ala World Com. A symptom of indigestion would be some degree of
divergence between ETF trading prices and NAV's.
Staying short compared to duration bogeys is one thing, actually being
short bonds or UST is perhaps a little different.
You allocate benefit of the doubt to retail investors more than i
might. Waitll they get their year end reports, paying on distributions
whilst the fund lost NAV.
Instead of switch to
hybrids and smaller cars as well as using nat gas for local city tranport they are trying to comsume
as much as possible. Without high tax of SUVs and opther "oil waisting" personal tranporation
veiches it is impossible to sustain the US economy. the only question is when it falls from the
cliff.
I've never understood the urgency of using up US oil so quickly. Better to buy someone else's at
a cheap price and save ours for a time when it is depleted elsewhere.
Its' not only the USA. KAS, Iran and Russia are doing
the same. There are a lot of short termism obsessed
politicians besides Obama administration
Especially KAS in 2014-2016. Who were instrumental
in the current oil price crash.
But behavior of the Iran and Russia was also
deplorable. Iran decided to get back its former market
share at all costs. But they like KAS are governed by
religious fanatics, so what we can expect?
At the same time Russia, which theoretically should
be a rational player and have enough space and steel to
build huge national oil reserves, using it as
alternative currency reserves, did nothing. Instead
Russia also increased oil production selling its
national treasure left and right, while prices were
hovering below $50.
Another bunch of short termism obsessed suckers. So
much about Putin as a great statesman. And what he got
in return for his stupidity - only additional sanctions
and allegations that he fixed elections for Trump. Such
a huge payoff.
IMHO of big oil producing nations only China behaved
rationally.
Oil is not renewable resource and burning it in
large SUVs and small trucks carrying one person to
commute to work is a suicide. That's what the USA is
doing on the national scale. Add to this all those wars
for the expansion of the US neoliberal empire, the USA
is fighting, which also consume large amount of oil and
it looks even worse. See
http://www.ucsusa.org/clean_vehicles/smart-transportation-solutions/us-military-oil-use.html
The U.S. military is the largest institutional
consumer of oil in the world. Every year, our armed
forces consume more than 100 million barrels of oil
to power ships, vehicles, aircraft, and ground
operations-enough for over 4 million trips around
the Earth, assuming 25 mpg.
So out of the total US oil consumption (let's say 20
MB/day) around 0.3 MB/day is consumed by military. I
think that the figure in reality might be twice larger
that cited as it is not clear how consumption of planes
operating in Iran, Syria, Libya, Yemen (and generally
outside the USA) is counted. But even 0.3 Mb/day is
approximately the same amount that Greece, or Sweden,
or Philippines are consuming. The latter is a country
with over 100 million people.
In twenty-forty years this period would probably be
viewed as really crazy.
"... Social Security has succeeded because Roosevelt insisted it be paid for by the workers who would get the benefits, "so no damn politician can take it away from them." ..."
"... "These who pant after the very dust of the earth on the head of the helpless also turn aside the way of the humble; " ..."
The trouble with Sneed's article is that she does not appear to know what she is talking about.
She just wrote down what some "experts" told her with no idea what the words mean.
For example, she says,
"A 65 year-old at the top of the scale, a $118,500 average earner, would see his benefits cut
by 25% when he retired, compared to the current law, and that reduction would grow to 55 percent
compared to current law by the time the retiree was 85 years old."
Well, which is he, "at the top of the scale" or an "average earner"?
The point is probably trivial but I point it out so you will be on your guard if you read her
article.
Additionally she quotes Paul Van de Water, who is someone who actually knows that Social
Security can be fixed entirely and forever by simply raising the payrolll tax one tenth of one percent
per year until the balance between wage growth and growth in the cost of retirement is restored.
But somehow she doesn't bother to mention this, or maybe Van De Water forgot to mention it
because he favors a "tax the rich" solution without understanding that that will turn Social
Security into welfare as we knew it, and lead to its ultimate destruction by those rich who would
then be paying for it.
Social Security has succeeded because Roosevelt insisted it be paid for by the workers who would
get the benefits, "so no damn politician can take it away from them."
But the damn politicians keep lying and journalists keep repeating the lies without spending ten
minutes thinking about them. The basic "facts" about the Republican proposal, introduced by Texas Congressman Sam Johnson appear
to be :
gradually raise the retirement age from 67 to 69.
This amounts to a benefit cut of about 10%, but that's not the worst of it. Raising
the retirement age is simply a death sentence for people whose health is not up to working another
two years, or won't live to collect benefits for more than a few years after they retire.
change the cost of living adjustment to reduce real benefits as the retiree gets older .
This is called a "technical adjustment." They can pretend that the CPI is too generous and
know that most people won't understand the scam.
the size of initial benefits will be cut for most workers by catastrophic amounts .
This turns Social Security into a straight welfare plan. Most people will be paying for
benefits they will never get. The very poorest are promised a larger benefit for awhile until
the bogus cost of living adjustment, and increased retirement age do their work. Moreover it
is not clear what happens to "the rich" who lose their "side income" as they get older.
And of course there is always the fun of going to the welfare office every month to prove that
you don't have any hidden assets.
Meanwhile, the CRFB (Committee for a Responsible Federal Budget). an organization dedicated
to the destruction of Social Security by misrepresenting the facts, is playing cute games like "use
our calculator to find out how old you will be when SS runs out of funds."
But SS will never run out of funds as long as the workers are allowed to pay in advance for their
own benefits. With no change at all in SS, SS will pay 80% of "scheduled benefits," but this
is 80% of scheduled benefits which meanwhile have grown 25% in real value. So the GOP "plan
to save SS" is out and out theft.
CRFB has another cute game: "use our calculator to design your own plan to save social security."
But when I used their calculator it did not allow "increase the payroll contribution by one
tenth percent (for each the worker and the employer) per year for twenty years.
There are other ways to accomplish the same end, but this seemed to be the simplest way to fit
the CRFB "calculator." Someone with more time and a newer browser might want to try seeing
what they get. But look at small per year increases in payroll contribution. For example,
I think a 0.4% increase (combined), about two dollars per week for each the worker and the employer,
should solve the problem in ten years, but I haven't done the numbers on that myself.
Meanwhile, something that calls itself "the Bipartisan Policy Center, says "Ultimately, we are
going to need something that's a little more balanced between benefits saving and revenue changes
in order to get a proposal that could pass Congress and get approved by the president," said Shai
Akabas, director fiscal policy at the Bipartisan Policy Center."
It's hard to see how much cuts ("benefit savings") make sense to balance a dollar a week increase
in the payroll tax (revenue changes), but that's the kind of thinking that "Bipartisan" gets
you. "Hey folks, we can save you a dollar a week just by gutting Social Security so it
becomes meaningless as insurance so workers can retire at a reasonable age."
I am getting too discouraged. As long as no one is working to tell the people how this will
work for them, we are just going to stand around like sheep and watch them cut our throats.
As someone who grew up with the promise of Social Security as a minimal income support system
for my old age I can attest to the fact that when the "average" retiree, who has almost no individual
savings accrued, steps in the pile of Social Security "reforms," there will be not just a wailing
and gnashing of teeth.
Modern age old people no longer can rely on extended families for support. Those extended families
have been fragmented by the pressures of "modern" socio-economics. This is prime territory for
a demagogue.
The Twentieth Century had World War 1.0 and a subsequent "Lost Generation." It's increasingly
looking like the Twentyfirst Century will have the GFC, Social Support 'Reforms' and a subsequent
"Euthanized Generation."
Remember, this process will not affect just oldsters. It will suck in those closest to said
oldsters as emergency support resources. It won't be only oldesters who will be watching elites
"over iron sights."
Perhaps someone will enlighten me, but this is one thing that really puzzles me about the Republican
determination over many years to gut social security. I can understand their ideological fixation
with it what I can't understand is why they are so willing to play electoral fire with it. Surely
this directly attacks millions of core Republican voters?
They may be able to fool many of them with deceptive slogans, but surely when the prospect
of finding their pensions slashed faces them, even the most supine and gullible middle American
Republican voter in their middle to late years is going to realise they've been had. The backlash
could be enormous. I find it hard to see how any rational politician would want to go near it.
They will find a way to blame it on the Democrats, and more importantly, on Blacks, Hispanics
and other minorities. They will sell the cuts and privatizations as the only way to save the system
that has been so badly damage by the fore mentioned, and as long as their base gets their beliefs
from Faux News, Bretbart, etc; it's quite probably the Republicans will succeed in getting what
they want while screwing down the ever hapless Democratic party.
I've met more than a few who'd almost be pleased to suffer as long as they thought blacks were
being made to suffer even more. There's no logic when hate gets this strong.
Exactly, the same way they have mortally wounded our once stellar public education system,
(a system once good enough to educate our "Greatest Generation) is now a shell, death by a thousand
cuts
Also, if you think income disparity is bad now? hang on to your wallet, because after 4 years
of Trump and his prospective cabinet picks, it will hit the stratosphere.
"There's no logic when hate gets this strong" so true.
Smart to point at the educational system.
I have not found many youths who can tell me what they want to do. I find this really weird.
It is true that if you know what you want to do the library will do.
Thanks to Ben Franklin, inventors, engineers had a place to hang out and collect information they
could use.
Maybe you had to live in NYC to have a NYCity library card, but it is a big city.
Meantime Charter schools, which sounded great to us when at Kenwood on the Southside, are gaining
ground and collecting tax money regardless of results.
They are said now in Not Conscious to be handing out diplomas same as Public Schools did to get
some bodies out the door.
I was a graduate, but denied attendance at the diploma hand out thing, cause I refused to pay,
for my public school diploma. Public education, supposed to be free to citizens.
People think I didn't graduate.
The Union believed in Trump. I get sick about lots of things. It will be worse than they think.
Education & Defense are what the government is for.
Twelve years ago the Republicans needed the Democrats to actually plunge the knife on the back.
Democrats like Joe Lieberman dearly wanted to lend a bipartisan hand but Pelosi and Reid actually
rallied to prevent it. Talking Points Memo was all over it then. Now they're on top of Paul Ryan's
machinations to privatize Medicare and this Social Security scam. Kind of raised some old feelings
for TPM, but they're also heavily flogging the CIA Russian hacking dembot campaign.
About the only thing I knew about Hillary's agenda is that she wanted to means test Social
Security and Medicare and start new wars. Obama wanted to do many of the cuts in Sam Johnson's
bill but was foiled by Tea Partiers who couldn't take yes for an answer or were smarter than they
seemed.
Both Schumer and Pelosi said the Democrats would oppose any of these current plans. We'll see.
I would hope they would realize that Social Security and Medicare are issues where the only
winning move is to expand them. IOW, they need to realize this is an area where the campaign donors
need to be told to pound sand, shut up and expect to pony up as in you ARE going to be paying
more into the system.
But these are people who thought there was no way that Clinton could lose, that this Russia nonsense
is a winning strategy and that ACA was going to be good for Democrats once people got to know
it. IOW, their grasp of reality outside their bubble might as well not exist it is so broken.
So while my fingers are crossed they still want their jobs AND aren't completely delusional, I
also know we better put the fear of the voters into every member of Congress about grannies and
wannabe grannies with canes beating them to a pulp any time they leave their house.
And by grannies I mean anyone on SS, and wanna be grannies everyone who someday might be able
to retire or at least only work part time after retirement age because of SS.
IF they cannot win an election they will not have any donors, and they are rapidly getting
to the point where a Democrat getting elected to a national office is the exception. Not to mention
there are a large number of states where that is pretty much the case. There is no reason to try
to bribe people so you can have them in your pocket if they are powerless.
They are terrible at strategy, but eventually they may figure out they need voters. You do
NOT alienate seniors as seniors are the most reliable voters around. Oh, and most of those seniors
have grandchildren they think deserve Social Security and Medicare as well. The only winning strategy
is to protect and expand.
I forgot to mention the consultant class. Absent a hostile takeover the Democrats may not be
fixable. Their disdain for and disconnect from the voters will do them in.
Would love to see this repeated and repeated, because although it's hard, we need to grasp
this fact:
their grasp of reality outside their bubble might as well not exist it is so broken.
their grasp of reality outside their bubble might as well not exist it is so broken.
their grasp of reality outside their bubble might as well not exist it is so broken.
their grasp of reality outside their bubble might as well not exist it is so broken.
their grasp of reality outside their bubble might as well not exist it is so broken.
Sam Johnson the same Sam Johnson who wrote "I spent seven years in the Hanoy Hilton. The Hanoy
Hilton is no Trump hotel." back in July ? Who milks his Vietnam tour of duty like a rabid milkmaid Who
says "I do not feel like a hero, and I do not call myself one" in the tones of one who thinks
the exact opposite? Who is constant cahoots with McCain (who is currently trying to sink a Trump
presidency) why am I not surprised that a neoliberal faction of the senatorial republican party
in seeking to weaken a populist president-elect is reaching for the third rail with both hands
and smearing all republicans with the same brush. I doubt very much Trump will weaken social security
since he knows it is the only thing his rebellious base of Deplorables can depend on call me simple
but Trump won this election against practically everyone and he knows his base is the only sure
recourse he has.
I don't count on that (Trump knowing not to touch Social Security). I wouldn't be surprised
if he went for privatization. HE will never ever need Social Security so why concern himself over
it? He's already throwing his electoral base under the bus with his cabinet picks. Every single
one of them is a direct violation of his pre-election promises.
I think Hillary also wanted to increase the payroll tax by 3% (an enormous amount of money)
and use it to privatize 3% of the SS funds to make up for shortfalls, ostensibly. They better
have a good insurance policy so that'll be another 3%. All this nonsense because we refuse to
admit we need social policies and social funding of the basic things. We are committing suicide
24/7 these days. Why don't we just call it all insurance?
The financial (rentier) crowd want to get their claws on the SS funds. They'll achieve their
goal unless we kick their puppets out of Congress.
They already have their teeth into your IRA funds, student loans, home mortgages and your bank
funds, It won't be too long before a Trojan Horse Prez signs away your SS. Beware!
We'll see if the Dems stand firm and fight back OR go for the old "bipartisanship!" bullcrap
and instead agree to a lessor CUT. They would then promote it as the two sides working together.
Typical neoliberal Dem establishment move.
Or are the progressive forces ascendant and ready to fight absolutely?
We'll see. In any case, the House will pass it, no question. The test is in the senate where
the Dems still have some teeth available (whether they USE those teeth is another thing altogether).
The Democratic Party must be made to defend Social Security as they rallied
against Bush's privatization plan. They will do so for political advantage, but they
too have attacked Social Security. Obama attacked it on three occasionsthe Deficit Commission,
the chained CPI added to a budget proposal, and the timing of married couples claiming benefitsand,
were it not for Monica Lewinsky distracting
Bill Clinton, Bill Clinton would have been attempting to privatize Social Security, not Bush.
Now it the time to contact your senators and representatives: NO CUTS.
As things stand, what you recommend is the best action to take as of right now. It is not enough,
but when letters come in to Dems and Repubs stating the senders will NEVER vote for anyone who
votes to mess with Social Security, Medicare, Medicaid, there might be some reactions.
BUT it needs to be many, many, many people writing, calling, and meaning it when stating "Representative/Senator
XXX, you mess with this and you will never, ever get a vote from me."
Humm, if you are depending on Bernie or any one politician to save you, then you've lost the
point of Democracy. It's all of you forcing them to do the right thing.
Bernie Sanders has said it himself, even FDR said to Black Activist asking for an anti-discrimination
executive order to the defense industry: "I agree with you, I want to do it, now make me do it."
They did do it, by threatening a strike during WWII, for which some were sent to jail. That's
what it's going to take, because voting once every 2 or 4 years isn't going to cut it.
They will never attack current beneficiaries. This is a lesson they have learnt over the years.
This is why they changed tack in the 1980s and keep raising the eligibility age which is a very
soft target. One thing the GOPers understand really well is, GOPer Seniors ALWAYS vote and some
Dem Seniors vote sometimes. So they will leave current beneficiaries alone. GOPer Seniors almost
all of them are driven by the conviction (Tea Party types) that Social Security and Medicare are
under jeopardy because of illegal immigration and because Social Security funds are being raided
and handed over to other beneficiaries like those on Disability etc. They have plenty of traction
on this because if you go ask the average 25 year old or even a 40 year old today whether they
can count on Social Security, most of them being morons and having swallowed the MSM propaganda
will tell you, 'I don't think it will be around when I get to 65'. I am fairly certain there are
polls to back this up. This is what the Greenspan Blue Ribbon Commission cleverly did under Reagan.
The people who are in their 50s today were in their late 20s in the 1980s and clueless about what
exactly Greenspan did to the eligibility age. So telling current beneficiaries that its good to
cut benefits for future beneficiaries makes a lot of sense to current beneficiaries. In any case
SS is toast. I think we will have to wait for the entire cycle of Old Age poverty to take root
again in another 50-60 years and for the tide to turn. It was wide spread old age poverty that
prompted FDR and also Trueman into action for SS and Medicare respectively.
Sewer species like Pete Peterson and the Hedge Funders target SS because it is a very productive
way to create mass unemployment and lower wages. They don't want people removed from the labor
market by SS when they become 65. Their secret longing is to drive down wages to the point where
the per hour rate will equal the human mules you see pulling overloaded hand carts in Mumbai,
India or Shangai, China. This is really the agenda. This is basically the psychology of monopoly
thinking. When you have captured markets up to a 95% level then you start looking like an idiot
because you have closed off growth altogether. Monopolies do not grow because there are no more
markets left. So the next thing to do is increase profits via driving labor costs down standard
Michael Porter Harvard Business School trick. This is what they have been doing in the last 40
years.
It's how they are selling every sort of deregulation. it destroys the future, but who gives
a damn about their children and grand-kids, the ungrateful snots. Shipping the old folks off to
the retirement home has divorced them from both the care and of caring about their descendants.
Your comment about the old folks home is right on target. The better class of senior housing
establishments are often the most fortified of bubble worlds, and the Seniors there spend hours
ranting to each other about how the younger generation has screwed them over somehow. I've witnessed
it first hand. They've been carefully taught not to give a crap about future generations, including
their own kids and grandkids. It's all about MEEEEEEEEEEE .
Thank you, I think a lot of us have noticed the veracity of this, especially over the last
four decades. Show of hands who else out there is sufficiently paranoid, to consider signing-up
a year early & simply absorbing the hit, with some silly fantasy of being grandfathered-in?
Thanks! I was dizzy from a bad head cold, working in very bagger-ridden environs (a quite literally
Dikensian hell-hole in Pennsyltucky), applying for Medicare and fishing through obfuscatory pleonasm,
picking Plan D & N insurers the 2nd or 3rd page in, they ask you if you're applying for "benefits"
at this time! Jesus Anybody ANYBODY??? I have some meager equity (at least, last time I looked?)
sufficient for a decade or so. But with Republicans dying young?
Increasing the retirement age while the average life expectancy is decreasing seams especially
crewel. Combine that with that piece from the times that showed people like me, born in the 80's
only have a 50% chance of earning more than our parents and that we are already drowning in student
debt and that is a full on assault on the youth of this country. Screw the national debt burdening
future generations, this will actually burden us. This really is the worst country in the world.
Fuck Patriotism.
Anyone who has a chance of affecting the behavior of AARP when it comes to SS and Medicare
needs to step up and apply whatever pressure they can to get that thing to return to its origins
and "work the issue" for their members, present and future. I know, it's mostly just another front
for insurance and other sales pitches and scams and "cruise packages" and other lifestyle crap,
but at least there has to be some skeletal remains of the original bones of the organization in
there somewhere.
Or failing that, is there another entity that might be worth supporting and joining with, to
go on the offensive and fight back? I would hate to think it's all futility and "47%" from here
on out.
AARP's origins? It was founded by an insurance salesman as a slick way to sell, yep you guessed
it, the industry's interests to a powerful bank of less than bright voters.
Some of us question if there won't be mass human extinction before then. Maybe there will be
no old age for many people alive today including yours truly. But nonetheless, if by some miracle
the worst doesn't happen then Social Security is important.
Prez Hope and Change's support for chained-CPI will certainly complicate the fight against
this. If Obama and his Rubinite stable of bean-counting butt-boys were for it then it must be
okay?
They're banking on getting some Democratic support, to make it bipartisan. With weasels like
Mark Warner in the Senate, they might get some Democrats to sign on to this.
Eh? Democrats will line up with their Republican BFFs to screw over the proles. Given how Democrats
are now a very Rump party in this nation, what have they got to lose? Why take of their alleged
"constituents" in the 99% What a laugh. The constituents of the Dem pols are, have always been,
and will continue to be the .01%. So the Dems will happily oblige their real constituents by screwing
over the proles. Anyone who expects a different outcome is not living in reality.
Perhaps it's because "the banks own this place." Also the Republicans, like the Dems, are running
on the fumes of past ideological obsessions and Social Security was always seen as a prime Dem
vote getter and flagship of the hated New Deal. Remember Karl Rove wanted to take the country
back to the McKinley administration. But mostly it's probably because people like Paul Ryan are
creatures of their funders.
Plenty are stupid, but the Democrats are in complete disarray. The GOP will face push back
from their voters, but the Democrats as they are now are not a threat to win any time soon. AARP
recognizing the interests of its members can shake Washington, but right now, the GOP sees no
threat to its rule.
Many of the not so weathy Repubs are 'rich wannabes'. So they'll gladly toe the line on cut
social security cuts and free market memes. They think that they have noting to worry about because
they'll be wealthy before they retire and they won't need SS. Boy, do I have a few bridges and
lots of swamp land to sell them!
One can note the Social Security "reform" is usually pushed by wealthy individuals who feign
concern about saving a system for the future of less well off Americans.
Also, Social Security is a system that is of little import to the wealthy as they will not
be depending on it for basic living expenses.
The wealthy's real fears are of a raising of the income cap that will hit them directly or
of an effort to support higher wages for the citizens currently paying into Social Security, hitting
their business profits.
While it may seem unexpected they can get help from Democrats in this effort (Obama, Bill Clinton )
but I suspect this is so because wealthy donors support the effort and the Democrats can pitch
the "saving" aspect while collecting campaign cash.
If a politician is not re-elected as a result, they might have a more lucrative career at a
think tank or as a lobbyist.
Of course, if the wealthy are so concerned about the alleged Social Security problem that is
looming in the future, where were far sighted wealthy Americans when it came to questioning the
Iraq War, the drug war, the lack of financial reform, and all the USA military/covert actions
that have done great harm to public finances?
Strangely, Social Security "reform" is a big concern of theirs, and the other USA efforts that
have caused much harm, are not.
Then there is climate change, again, wealthy individuals are more concerned about "saving social
security" than saving the planet.
Also the "reform minded" politicians do not appear to allow that current social security benefits
probably are used by many entire low income families. So cutting grandma's benefits also could
immediately hit her kids/grandkids financially.
A secondary effect is that lowering SS benefits means the wages of current workers can be lowered
in concert as their SS payments, which flow to current recipients, can be lowered, perhaps even
allowing another Social Security reform effort to be promoted.
The ability of TPTB to sell this to the American public should not be underestimated as the
advertising/public relations/MSM has been successful in promoting/maintaining many bad ideas.
The wealthy are not concerned about saving anything unless they can make money off it. They
are already getting richer from the endless wars on terror and drugs, and taking planetary resources
for themselves. The only reason they talk about "reforming" Social Security and Medicare is to
get their hands on that money as well. And please do not expect the corporate media to explain
any of this to the dumbed-down masses.
The Republicans can afford to play with potential policial backlash for two reasons: First,
they relentlessly beat out false narratives about the demise of SS and its inadequacies so that
their flase story becomes a part of the consciousness of citizens. (This is the same thing done
to attack teachers, unions, the post office, government, etc. You put out the lie long enough,
it becomes the truth.) Second, they have been engaged in not one knife to the heart of the program
but an attempt to promote its demise by a thousand cuts, little by little, until the program is
no longer viable. I know for a fact that young people have bought into the lies put forth by them
and do not think the program will be there for them because they too have bought the lie. Those
pushing to kill the most effective program in US history, one that has kept the elderly from complete
poverty, are nothing more than evil. They want no public programs, and all revenue funnelled into
corporate models that enrich the 1%.
Conservatives love destruction for its own sake. Smashing the Alaska Wildlife Refuge, smashing
the ancient city of Baghdad, spilling oil all over North Dakota, wrecking Social Security, all
these things have a political component, but it is the destruction itself that makes them absolutely
adorable to Conservatives. Bear in mind this pervasive love of destruction, and many Conservative
initiatives will become more clear.
And the "base" goes along with it, because many of them have been inculcated with the theory
that it is more pleasurable to do someone else harm than to do one's self good. Given a choice
to make, they will always pick the former. Hope this helps.
Me, I find NC's alarm and amazement at the Republican plans to wreck Social Security ingenuous.
What did you think would happen? God knows you were warned.
Who warned us? Not the media. Not Obama. Who? I'm thinking naked capitalism.com, best Paul
Revere substitute I can come up with at the moment.
Nobody here needed warning. Nobody is alarmed or amazed. And nobody stuck their heads in the
sand and figured everything is going to be peachy. What we did need was a well written reminder.
People drunk a whole lot of Koolaid like "it takes a Democrat to cut social security". Koolaid
was spilled all over in drunken Koolaid orgies at one point toward the end of election silly season.
But the party is over and all that is left is the wreckage. Of course Hillary may have done the
same thing as we weren't exactly getting any encouragement from her that she wouldn't and rather
in fact got hints that she might (support for Peterson committee, her retirement plans for private
investment etc. to supplement Social Security of course). None of which were absolute certainty
that she would cut it of course, but they aren't always honest about that are they, so not encouraging
either.
It's best seen as an all out effort to wreck any good that the government does for common people
so that they can beat the war drum of government failure. This then serves as the smoke screen
to hide just how much ultra rich directly benefit from government support through bailouts, privatization,
tax cuts, subsidies, and out right theft and fraud. And just how much more they will get when
Social Security and Medicare are privatized and benefits are shrunk. Those are large streams of
government controlled funds, and they want it.
Social Security and Medicare work extremely well, and should be expanded. But don't delude
yourself into thinking this is obvious to most people. Both political parties are dedicated to
killing Social Security and Medicare and are extremely adept at spouting the " we must kill it
to save it" BS.
Ds movement to the right and their continuation of R policies, no matter how vile, actually
redeems the R party for the next election. If they take turns governing only on behalf of the
.9, .09 and .01% they take turns redeeming the other branch of the money party. The colluding
media will propagandize every bit of corruption and sleazebaggery as 'no other option' trot out
imaginary deficits.
The voted out politicians will enthusiastically do it because they enter office looking for
the big sellout as they will receive the only objective they ever had in achieving elected office .
lucrative appointments and sinecures at parasitizing corporations, think tanks, scam foundations
and presidential libraries.
Exactly. But not everyone has a reflex sight or scope. And a lot of people who do have such
a very wrong notion of who the targets ought to be, the ones that actually pose the greater=st
immediate threat
Though 4,000 veterans appearing at Cannon Ball with the #NoDAPL presence probably have or are
developing a correct "sight picture" and target designation
Oh H-! Where is my 3-9X40 when I need it?
The late lamented science fiction writer Mack Reynolds penned a screed along these line a ways
back about a pissed off ageing Lord Greystoke and the fate of the old in America called "Relic."
The plan will be structured to only hurt future retirees. The solution to this political problem
is to have anyone who will be affected demand that they be allowed to opt out from now on and
to receive a refund, with interest, of all of their previous contributions to the system because
the "earned benefits" have been taken away. Ownership in America is a sure winner politically.
I don't expect Democrats to have the balls to actually propose this, but it would leave the
plans in tatters because without the tax stream and the already contributed taxes it won't be
able to pay current retirees. Now that would get the current retirees attention!
Not only can old people no longer depend on their extended families for support I'm afraid
many young people in that extended family have had to rely on the older people for support. My
young adult children are not doing terribly well in the new economy and I don't see things improving
for them any time soon - if at all. I've had to step in and help a little here and little there
more and more as the costs for those unplanned surprise expenses keep blindsiding my children.
And maybe that is what the author thought, but it doesn't work. Wages above the SS max don't
get taxed and don't add to the final benefit, so people who have an average salary equal to the
max have a benefit that is below the max. The difference would depend on how much the salary fluctuates,
year by year.
Perhaps a serious attack on welfare for the rich would persuade the enemies of Social Security
that those who live in glass houses should not throw stones?
To make such an attack, one needs must take over the "reins of power." In short, your suggestion
is revolutionary. (I'm not averse to such, just observing.)
I mean an ideological attack since much welfare for the rich is not yet recognized as such
(e.g. government provided deposit insurance instead of a Postal Checking Service or equivalent,
e.g. interest on reserves, e.g. other positive yeilding sovereign debt).
Yes it is. It is part of the means by which the poor, the least so-called creditworthy, are
forced to loan to depository institutions to lower the borrowing costs of the rich, the most so-called
credit worthy.
The ethical alternative is an inherently risk-free Postal Checking Service or equivalent for
all citizens, their businesses, etc. Then the poor need no longer lend (a deposit is legally a
loan) to banks, credit unions, etc or else be limited to unsafe, inconvenient physical fiat, aka
"cash."
Interesting that maybe 4,000 veterans showed up and formed up at Cannonball/DAPL, to stand
against the thugs and "government" and with the Native Americans who seem to have found a set
of honest and attractive memes to present to the rest of us. The Bonus Marchers got the MacArthur
Fist way back when, but I'm wondering how all those troops trained in maneuver-and-fire would
take to further (planned) assaults on their livelihoods and families, while they are ever more
being "deployed" to protect the as-s-ets and post-national "interests" of the Few
Not to worry. Organization is taking place. In New York State the Bernie delegates have kept
in touch since the convention. They have organized into 25 affiliates state wide. We have had
a conference already. The Lower Hudson Valley affiliate may be able to defeat the Trump agenda
all by itself. We tuned into the Our Revolution call and decided to do our own thing.
https://twitter.com/NYPANetwork
Any similar initiative in Massachusetts? The last time the Republicans tried to gut SS under
Bush, the Democrats came out in force and held meetings on weekends around Rhode Island (where
I was living at the time) to fire up opposition to the plan. I'm anticipating Elizabeth Warren
and other MA democrats will oppose this, but want to be ahead of that by looking for other avenues
of opposition like Bernie's coalition, such that it is.
I seriously doubt anyone would be enthused by a Democrat party still headed by that Super Frisco
Water Carrier Pelosi. I know I would not for one. The bell tolls for Bernie but the man has been
struck dumb.
If you already have an OR local or state group and you want to be affiliated with national,
or at least talk to national DM me on twitter and I can get you in touch, I have a friend who
works for them. https://twitter.com/UserFrIENDlyyy
Social security has already been cut over the last several years without a peep out of anyone.
No cost of living adjustments in 3 of the last 8 years. Actual inflation is at least 2 points
higher than the reported figures. Social security has been cut 15-20% since the financial crisis.
Yep. And I have elderly friends who are suffering bc of it. But everyone is very passive having
bought into the propaganda that this is "just the way it is," and "there's just not enough money"
to provide anymore via SS. So we have a very passive population, who've mostly all bought the
propaganda about how "broke" Soc Sec is we proles, yet again, have to suck it up bc the wealthy
certainly cannot be expected to have the income cap raised heave forfend.
Just got my Soc Security statement. My net gain, for 2017, after an increased deduction for
MediCare, is .nothing. See, there's no inflation (except my car insurance, home insurance, health
insurance, food, etc have all gone up). And to add insult to injury, our benefits (derived from
involuntary deductions from our paychecks) are called "entitlements."
As our elected "representatives" are so adamantly opposed to these programs, and would like to
reduce them to table scraps, I am eagerly awaiting the announcement that Congressional pensions
and healthcare benefits are going to be discontinued.
Same here. Any small gain was offset by increase in deduction for Medicare. In addition to
the rising costs you cite, I find I am paying increased local taxes, among other things. So, like
most people, we must contend with stagnant income to pay rising cost of living (and I mean the
necessities).
I started paying into the system in 1965. Medicare used to be no cost and cover all medical expenses,
so that is a cut in itself. I knew that I could not rely on SS in my old age, and I live modestly.
I agree with your last comment. I have never seen why our representatives in Congress should receive
any different coverage than the citizens they are elected to represent. As individuals, they can
supplement it, just as we have to.
I was notified yesterday via letter that my SS benefits will increase 4.00 / mo next year.
This will be a great help because my rent went up 7.00 / mo to 1600.00 for my studio apt.
Current law says that in approximately 13 years all benefits will be cut across the board
by 20-25%.
That is an unacceptable outcome.
What to do with this reality? The answer is "Something" must get done. The wrong answer is,
"Don't do anything, wait 13 years, and then fall off a cliff".
The proposal that in the author's words "Guts" SS actually increases benefits by 9% for the
bottom 20% of beneficiaries. The cost of the proposal falls on those who have high incomes before
AND after reaching age 65. The proposal stabilizes SS for the next 75 years, and there are no
new taxes required. Exactly what is wrong with that?
In the post pension plan age, I think the 20%-90% bracket needs it. Maybe up to the 99% bracket
once our current 401K bubble bursts and Housing Bubble II bursts.
So the only option are things that actually punish today's working class and weaken the system
by eliminating the all in/all the same position? No, it isn't. The problem is that the answer
is to slowly raise the payroll tax AND eliminate the cap something that should have been done
decades ago once it became clear that the people who lived the longest on SS were largely those
who stopped paying payroll taxes at some point throughout the year. But we cannot consider those.
Nope we have to talk about raising the retirement age when life expectancy for most is dropping
and we have to go with things that mean that you need to start living like you have to choose
between drugs and eating cat food from day one because your benefit will never increase regardless
of how much more your food, housing or medicare premium increase, or there even if they allow
cost of living they write off things because you can give up steak for chicken over and over.
Instead of a expanding to a more universal program, you support turning SS farther into a program
that categorizes individuals, assigns a hierarchy and then ranks them according to some random
definition of human and who is most deserving.
There's nothing wrong at all with having nothing but contempt for others and hiding behind
some made up term of 'cost'. It's perfectly reasonable to deny the means to the dignity of housing
and food to others.
The fact the last two Dim-o-crat presidents (Clinton and Obama) and not a few Dim-o-crat Senators
and Congressmen are in agreement about "saving" Social Security doesn't help either. Clinton's
plan was derailed by the Lewinski thing and Obama's because the Republicans wouldn't take yes
for an answer (didn't want him to get credit for it but don't mind doing it themselves)
In case anyone has not noticed, they are already cutting SS benefits by stealth means. There
have been no cost of living increases in 3 of the last 5 years, and for my personal SS benefits,
the measly .3% increase next year goes away entirely with the increase in medicare payments. I
suspect many folks, like my sister who is 78 and still working full time, do not realize that
the increases they are receiving are due entirely to their still being in the work force. In addition,
with the cutbacks that have been forced on the administrative side of SS, more mistakes are being
made. A friend of mine was declared "dead" by SS (something that also happened to me with my tiny
pension plan). When she attempted to correct the error, the SS employee discovered that "thousands"
of people had been similarly affected. This happened last summer and my friend is finally receiving
her benefits, but a month late and for some reason the agency cannot issue that catch-up check.
She is still working and so not completely bereft, but what in the world are the folks doing who
have no other income??? I suppose our overlords will be most pleased that the constant annoyances
they are causing us will result in our passing away from sheer anger and frustration.
That's interesting. I have a friend, who is still in her 50s, who was working on her will,
etc, and discovered that she was no longer "alive" as far as Soc Sec was concerned. She got it
rectified, and it didn't have a negative impact on her (she's still comparatively young and working).
But it's decidedly odd about how all these citizens are suddenly dead as far as Soc Sec is concerned.
And yes, it takes some effort to get back on the database of the living. For those who are really
elderly, this could be a very difficult thing to do.
It boggles my mind why any one would ever want to gut social security. Companies already push
people out at 55 and then you have a good 8 to 12 years of somehow managing until social security
comes to your rescue. Younger people do think social security will not be in place when they are
in their 60s which makes them angry. And who can ultimately rely on the stock market etc. to give
them the money they will need when older shivers. Is the economy that sound? Plus many people
cannot manage to work so long due to health reasons which do start creeping up on people in their
late 50s or the work they do is too labor intensive for them to imagine keeping at it until 69
or even 67. Bodies give out at some point. That is reality. Everyone wants to work until 70 but
the companies don't want older workers they want young, fresh, vital. If anything, social security
should start at 60.
Two reasons come to my mind, a desire to reduce or eliminate the employer half of payroll taxes
AND the pool of money that the financial industry thinks should be theirs to rape and pillage.
But I'm sure there are others.
Recent posts and comments have noted both more billionaires and a rapid concentration of wealth
amongst them. But it's mo' po', too, what Turchin calls 'popular immiseration'. To decrease the
effects of 'interelite competition' the wealthiest cannot just bestow unto their favorites, they
must tend to the rich on the downslope. Those are the ones with resources to engage in attrition.
So there is a long history of shoving the costs onto those who can't fight back, and the unlanded
are easier to slap down.
A personal case: Pearl was a delightful very elderly lady a few doors down. Her house was in
trust until she died, and she had a daughter and a grandaughter living with her. When she died,
one of her (all over-55) children had medical debt needing paid and so he vetoed keeping the house.
It sold, the land was lost to the family, and daughter and grandaughter were homeless.
That interelite competition was apparent in the election. Our choice of two New York billionaires
was a choice over which aspect of the FIRE sector would dominate, Finance or Real Estate. But
those differences seem to get averaged out below a scale of 10^8 or so dollars.
Re Companies that push people out at 55 and don't want older workers and prefer younger ones,
this leaves a lot of people in that 55-70 age bracket in a difficult (and in some cases, a terrible)
situation if they're not in the minority of those who have a secure gig until they retire (usually
people that I know that have government gigs w/ pensions.) The Presidency nor the Congress have
no solution for older workers who get pushed out and face discrimination due to their age when
they seek employment. They would prefer to not hear about it and if they're sleeping in cars or
in tents under bridges, that's their problem.
continuing what's been going on for the past 8 years, ever heard of quantitative easing, the
ACA, or chained CPI? Foam the runway with HAMP, maybe, or endless war as the only jobs guarantee
available. Sorry, but trump is just more of the same, only a little more forthright. You should
be used to it by now.
No argument here. Put the Dems in control and they will find all kinds of excuses for doing
the same thing, all bight more subtlety. Clinton was going to privatize Social Security and Obama
proposed chained CPI. Not to mention the effects of TPP.
Another columnist whose "answers" are predicated on the assumption that taxes provision government
programs. Just one question: Where do tax payers get the dollars to pay taxes with if government
doesn't spend them out into the economy first?
If that's too much thinking: Where was all this "we're out of money" talk when the Fed, according
to its own audit, pushed $16 $29 trillion out the door to save the financial sector from its
own frauds? Yet government routinely denies it makes the money when the orders-of-magnitude demands
of safety net programs appear. Taxes make the money valuable; they do not, and obviously cannot,
provision government.
As long as this isn't common knowledge, we're all condemned to austerity. Even public policy
makers sympathetic to workers (e.g. Dilma Rousseff) are in peril if they adopt the "inevitable
austerity" routine.
Unfortunate that I had to scroll this far down to find the first person with a correct understanding
of government finance. I've explained MMT point blank to people multiple times and they still
cannot grasp it. Until people start caring and get a general understanding of how this thing works
we are in a lot of trouble. I am hoping that Trump will be godawful enough to bring about such
a conviction for revolution to the average American
As the Henry Ford saying goes (oft-quoted by Ellen Brown):
"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."
Exactly right and if the powers that be were really concerned about funding SS from those who
will receive it all they have to do is raise the income cap to cover total income for everyone
- not just middle income workers. Problem solved and no need to worry about the fact that the
government can't run out of dollars.
I see the Trust Fund as having been accumulated over the decades by my generation - by paying
higher FICA tax to purchase fed bonds with. TF running out now supposed to be the big to do? Wasn't
it supposed to run out? Aren't we supposed to use what we saved?
I like to say: have an SS retirement shortfall today? Do it all over again: hike FICA, lower
income tax and accumulate bonds. Mmm.
But, just yesterday I had a brainstorm. If Repubs want to cut benefits so FICA shortfall doesn't
have to made up by income tax cashing bonds (covering about 25% of outgo just before our bonds
run out, then, Repubs want to steal our savings that we forgave immediate gratification to accumulate
all those long years.
Always suspected income tax payers who are hit for as much as 39% would balk at cashing the
bonds when the time came - but on the basis of the usual world run for the haves idea. Never thought
of it in terms of outright theft - before yesterday.
PS. Really shouldn't use up all bonds. Right now there are about four years of full replacement
in the TF. Legal solvency is defined as one year - needed to cover temporary shortfall while Congress
moves to fill in - happened couple of times.
No. Defined benefit plans are supposed to be funded so that the assets earn enough to pay promised
benefits. If the assets run out, the plan is not only mismanaged, it's bankrupt.
Seriously, if your checking account were emptied by a hacker, would you ask "Wasn't it supposed
to run out?" You are a crime victim.
Educate, Agitate, Organize, yup, expanding on cry shop's comment above, it's more than breitbart
and Fox these days. The mainstream media may be (usually) more polite and more subtle, but they
will not report the basic info accurately like Yves and Lambert do here. Our Revolution is a good
start. There need to be alternative sources of information such that education can happen. That
is why the "fake news" attacks on alternative media are such a big deal. The founders of the US
understood the importance of information too, one reason the postal service was established with
low rates for all periodicals. "Knowledge will forever govern ignorance; and a people who mean
to be their own governors must arm themselves with the power which knowledge gives", wrote Madison.
We really are sheep without knowledge. Some like it that way .
Donald Trump, at his rallies, consistently lied to his fervent fans that he was going to save
Soc Sec & Medicare. What a laugh.
I've been blogging and telling people throughout the election process that Trump made a very
public DEAL with Paul Ryan that he, Trump, was totally behind cutting and gutting SS & Medicare.
That is the main (possibly only) reason why Ryan gave Trump his very tepid "endorsement." But
this was very public knowledge and not hidden.
But of course, Trump lies constantly, so his fans were mainly enthralled with what a bully
he is and believed what they wanted to believe. Made up fantasies. Some of his fans are waking
up to the fact that they've been screwed over royally. Of course the M$M will happily oblige by
somehow finding a way to blame it all on Obama, Clinton, the Democrats, whatever (not that the
Dems aren't equally happy to cut and gut SS & Medicare, as well) and the proles will buy it.
Although various states have now passed laws to legalize what's called "assisted suicide,"
there's still a lot of resistance to it, esp from those of various religious persuasions. Also
assisted death in these cases is only available for those already in the latter stages of terminal
illnesses, and generally extreme poverty doesn't fall under that definition. So sucks to be you.
I guess dying from hunger and exposure, due to extreme poverty, is our just deserts. No rest
for the wicked. When you die, you have to die as painfully and slowly as possible just to impress
upon you how worthless and awful you truly are. The punishments will continue until morale improves.
This was posted hours ago. How many readers have taken the time to email their congressmen?
Please do! You don't have to be lengthy or learned. You can simply state a couple of talking points
you all know and intimate that tampering with benefits is not going to be accepted. This is definitely
one of those "if you're not with us you're against us" issues, and the sooner your elected representatives
understand you mean that the better.
"I think a 0.4% increase (combined), about two dollars per week for each the worker and
the employer, should solve the problem in ten years, but I haven't done the numbers on that
myself. "
WHUT? Why are space cadets like this even allowed on the internet?
Trying to patch Soc Sec's $10 trillion hole with an 0.4% FICA tax hike is like trying to empty
the Atlantic Ocean with a teaspoon.
Net present value, Dale - I'm afraid you cut class that day. Now it's too late.
The attempt by the right to "fix" Social Security is nothing more than an attempt to make the
trust fund disappear, and to mark all the obligations that fund was supposed to have met null
and void.
If this sounds like they are trying to steal the trust fund, that is not the case. They have
already stolen it. Now they just have to fix the accounting to say they didn't, which they will
do by setting the system to never need to cash a bond from the trust fund.
Tin foil hat, you say? Fine, but do me a favor. Whenever a bill is introduced to "fix" Social
Security, do the accounting for how it will play out. The trust fund will no longer be needed?
Something about this strikes me as a hilarious farce of unintended consequences. People worried
about "government debt" and demanding its reduction are getting exactly what they wished
for.
I'm not quite sure of your meaning here. It sounds like you are mocking people for not being
able to get out from under a propagandist educational/media system and a corrupt government. Then
again, it also seems to be gloating and that people deserve to be immiserated.
This is called a "technical adjustment." They can pretend that the CPI is too generous and
know that most people won't understand the scam.
I am a 100% disabled veteran and several years back they tied our COLA to the SS COLA.
The result is that since mid 2013 in this region we have lost about 40% of our purchasing power.
Our standards of living have dropped by that much.
Of course there is NO INFLATION, the letters I have been getting actually claimed that because
of this DISINFALTIONARY economic environment . That is no inflation so no raise this year.
Now, I am going to be 59 this spring, I worked at a lot of things between 1973 and 2005 when
a judge ruled in my favor regarding my disability and awarded me SSD. But, because I spent so
many years fighting SS and did not have the quarters of income recent enough my SSD amounts to
$1,013 per month.
Now for all the republicans out there who think SS is too generous, I would ask you to stick
your filthy little brains, or rather pull them out of your exhaust holes. You can claim it is
too generous when you have spent a lifetime paying in and then someone tells you that 12 grand
a year is too generous.
MY RENT IS MORE THAN THAT and this place s a hovel in the sticks. The only way I can have a
roof over my head for less is to live in my vehicle.
Fortunately I also have a bit in VA disability and between the two I thought of myself as middle
class if just barely only 36 months ago, now I would consider myself in dire poverty at 20k a
year, anything less and we are talking eating at the mission and sleeping in shelters. Vehicle?
Right. The fact that they refuse to acknowledge inflation and use quite literally half a dozen
tricks to disappear it from the headlines does NOT mean it does not exist. If you can eat gasoline
and flat screen TV's you are certainly doing great, otherwise you are experiencing something never
known in the USA, structural downward mobility for 90% of us.
And it is these facts that drove the angry and the stupid to vote for Trump, they were not
the majority of voters, but between them and antiquated laws giving voters in small states far
more power than in urban areas (where people actually live) that Orange Hitler dude got in, and
so did the GOP majority of fascists who have as a holy mission class warfare and getting rid of
diversity of any kind, racial, sexual, or gender.
They are going to gut every bit of progress since Teddy Roosevelt. They are going to bring
back segregation, this time though via school vouchers. They are not going to FORCE non white
non middle class kids into slum condition schools, so they will plausibly claim HEY it is NOT
segregation and those parents have an equal right to move their kids to private schools also.
No, instead these kids will be abandoned in schools that the government will slash funding to
as white upper and middle class people are partially paid the tuition to send their kids to private
schools which are exempt from federal discrimination laws. I am NOT holding my breath for this,
I have a one way ticket to Australia for the first week of January.
THAT is going to be the story of all government for a while, social security is just one of
MANY functions of government they are going to kill off. If you think people were angry in 2016
just you wait till 2020.
It is already so bad that unless the GOP grows a conscience and a heart in the next 2-4 years
the USA will break up the way the Soviet Union did. The nation now has what so many married couples
cite in divorce proceedings, IRRECONCILABLE differences.
And the worst of it is that no matter if you like it or hate it the USA is the rock of stability
that has keep civilization working since the end of WWII. You break up the USA and bingo there
is no uni in the unipolar geopolitical world. What we will have is chaos and war and humanity
will fail. USA FAIL=Humanity FAIL.
Thank you. Thank you. Thank you. For your plainspoken honesty. This should be copied and posted
everywhere, starting with senators and representatives.
They should have an option for an opt out of social security, medicare/Medicaid, Affordable
Health Care. Not having that kind of freedom to me is not worth it. I am not buying any other
excuses such as I am not shrewd to invest my money. Taking money is the easy part. Getting back
is always laborious if you are lucky to get.
right. many people opt out of "mandantory" auto insurance by just not
getting it. it's been estimated that in FL at different times as many as
one third of the drivers on the road are not insured. and really, if they
get injured, they get treated in an emergency room until they are stabilized
(the law) and if they were sued for damages, what could be recovered?
but, let's remember, while they are on their "ride" they are "free." Yep.
a lot of people think like that.
Social Security, let's lay it to rest once and for all Social security has nothing to do
with the deficit. Social Security is totally funded by the payroll tax leviedon employer and
employee. If you reduce the outgo of Social Security, that money would not go into the general
fund or reduce the deficit. It would go into to the Social Security Trust Fund. So Social Security
has nothing to do with balancing a budget or lowering the deficit.
would someone explain why the greenspan changes , which were supposed to keep social security
solvent, did not, I've googled the history and the only answers seem to be that the trust had
trillions in surplus that were used to pay off other obligations, , which I do know that the funds
were used to lower the deficits in previous years, but wouldn't the surplus still be there? Explanation
please by someone knowledgeable about the history and why the problems now
"Well, which is he, "at the top of the scale" or an "average earner"?"
Oops. Even I understand that one. It means he earned an AVERAGE of $118,500, the maximum that
SS taxes.
Next question: what kind of idiot actually introduces a bill to cut Social Security? One who
plans on a lucrative retirement from politics, that's what kind.
Protesting the proposed policies of President who owns real properties of value in media-drenched
major cities that require the labor of lower income workers on a daily basis might be more effective
than protesting a President whose wealth is almost entirely stored in secret, offshore bank accounts.
"The trouble with Sneed's article is that she does not appear to know what she is talking about.
She just wrote down what some "experts" told her with no idea what the words mean."
You missed the question, is it the writer or the policy of the site?
The IEA's estimate from its Oil Market Report shows an even bigger growth: by 300 kb/d to 34.20 mb/d,
led by increases from Angola along with Libya and Saudi Arabia. The group's output stood 1.4 mb/d
higher than a year ago.
https://www.iea.org/oilmarketreport/omrpublic/
China's crude oil production increased 3.6% in November from the previous month to about 3,915
kb/d, the highest since July.
Output was down 382 kb/d (8.9%) from the same month last year.
Crude production has fallen 294 kb/d (6.9%) in the first 11 months of 2016 to 3,984 kb/d.
Comment
from Bloomberg:
"China's output has declined this year as state-owned firms shut wells at mature fields that
are too expensive to operate at current prices. The country needs oil above $50 a barrel to stabilize
production, according to analysts at Sanford C. Bernstein, as well asFu Chengyu, the former chairman
of both Cnooc Ltd. and China Petroleum & Chemical Corp. Production is forecast to drop 335,000
barrels a day this year, followed by a further slide next year of 240,000 barrel a day, the International
Energy Agency said Tuesday.
"November's output pickup is probably just a blip, which won't likely persist," said Gao Jian,
an analyst with Shandong-based industry consultant SCI International. "For the next six months,
unless oil prices stay above $50 a barrel, we we won't see solid recovery."
The rise in production last month was in anticipation of higher crude prices amid OPEC meetings,
said Amy Sun, an analyst with Shanghai-based commodities researcher ICIS-China.
China's annual crude output is seen falling to 200 million tons this year (about 4 million
barrels a day), down roughly 7 percent from nearly 215 million tons last year, according to estimates
from SCI International and ICIS-China."
Yes, the US clearly needs some kind of energy policy, and I think one thing that highlights
how badly this is needed is the ability of anyone who can raise the money to be able
to drill 96 horizontal wells in one section of land (two if the laterals are the two
mile variety).
But, I guess any mention of conservation in the US industry these days
is heresy.
I would not be too critical of Chinese production falling. Seems to me they are buying
up all the cheap oil they can from overproducing nations, and storing it. Makes sense
to me.
Vladimir Putin's Valdai Speech at the XIII Meeting (Final Plenary Session) of the Valdai International
Discussion Club (Sochi, 27 October 2016)
As is his usual custom, Russian President Vladimir Putin delivered a speech at the final session
of the annual Valdai International Discussion Club's 13th meeting, held this year in Sochi, before
an audience that included the President of Finland Tarja Halonen and former President of South Africa
Thabo Mbeki. The theme for the 2016 meeting and its discussion forums was "The Future in Progress:
Shaping the World of Tomorrow" which as Putin noted was very topical and relevant to current developments
and trends in global politics, economic and social affairs.
Putin noted that the previous year's Valdai Club discussions centred on global problems and crises,
in particular the ongoing wars in the Middle East; this fact gave him the opportunity to summarise
global political developments over the past half-century, beginning with the United States' presumption
of having won the Cold War and subsequently reshaping the international political, economic and social
order to conform to its expectations based on neoliberal capitalist assumptions. To that end, the
US and its allies across western Europe, North America and the western Pacific have co-operated in
pressing economic and political restructuring including regime change in many parts of the world:
in eastern Europe and the Balkans, in western Asia (particularly Afghanistan and Iraq) and in northern
Africa (Libya). In achieving these goals, the West has either ignored at best or at worst exploited
international political, military and economic structures, agencies and alliances to the detriment
of these institutions' reputations and credibility around the world. The West also has not hesitated
to dredge and drum up imaginary threats to the security of the world, most notably the threat of
Russian aggression and desire to recreate the Soviet Union on former Soviet territories and beyond,
the supposed Russian meddling in the US Presidential elections, and apparent Russian hacking and
leaking of emails related to failed US Presidential candidate Hillary Rodham Clinton's conduct as
US Secretary of State from 2008 to 2012.
After his observation of current world trends as they have developed since 1991, Putin queries
what kind of future we face if political elites in Washington and elsewhere focus on non-existent
problems and threats, or on problems of their own making, and ignore the very real issues and problems
affecting ordinary people everywhere: issues of stability, security and sustainable economic development.
The US alone has problems of police violence against minority groups, high levels of public and private
debt measured in trillions of dollars, failing transport infrastructure across most states, massive
unemployment that either goes undocumented or is deliberately under-reported, high prison incarceration
rates and other problems and issues indicative of a highly dysfunctional society. In societies that
are ostensibly liberal democracies where the public enjoys political freedoms, there is an ever-growing
and vast gap between what people perceive as major problems needing solutions and the political establishment's
perceptions of what the problems are, and all too often the public view and the elite view are at
polar opposites. The result is that when referenda and elections are held, predictions and assurances
of victory one way or another are smashed by actual results showing public preference for the other
way, and polling organisations, corporate media with their self-styled "pundits" and "analysts" and
governments are caught scrambling to make sense of what just happened.
Putin points out that the only way forward is for all countries to acknowledge and work together
on the problems that challenge all humans today, the resolution of which should make the world more
stable, more secure and more sustaining of human existence. Globalisation should not just benefit
a small plutocratic elite but should be demonstrated in concrete ways to benefit all. Only by adhering
to international law and legal arrangements, through the charter of the United Nations and its agencies,
can all countries hope to achieve security and stability and achieve a better future for their peoples.
To this end, the sovereignty of Middle Eastern countries like Iraq, Syria and Yemen should be
respected and the wars in those countries should be brought to an end, replaced by long-term plans
and programs of economic and social reconstruction and development. Global economic development and
progress that will reduce disparities between First World and Third World countries, eliminate notions
of "winning" and "losing", and end grinding poverty and the problems that go with it should be a
major priority. Economic co-operation should be mutually beneficial for all parties that engage in
it.
Putin also briefly mentioned in passing the development of human potential and creativity, environmental
protection and climate change, and global healthcare as important goals that all countries should
strive for.
While there's not much in Putin's speech that he hasn't said before, what he says is typical of
his worldview, the breadth and depth of his understanding of current world events (which very, very
few Western politicians can match), and his preferred approach of nations working together on common
problems and coming to solutions that benefit all and which don't advantage one party's interests
to the detriment of others and their needs. Putin's approach is a typically pragmatic and cautious
one, neutral with regards to political or economic ideology, but one focused on goals and results,
and the best way and methods to achieve those goals.
One interesting aspect of Putin's speech comes near the end where he says that only a world with
opportunities for everyone, with access to knowledge to all and many ways to realise creative potential,
can be considered truly free. Putin's understanding of freedom would appear to be very different
from what the West (and Americans in particular) understand to be "freedom", that is, being free
of restraints on one's behaviour. Putin's understanding of freedom would be closer to what 20th-century
Russian-born British philosopher Isaiah Berlin would consider to be "positive freedom", the freedom
that comes with self-mastery, being able to think and behave freely and being able to choose the
government of the society in which one lives.
The most outstanding point in Putin's speech, which unfortunately he does not elaborate on further,
given the context of the venue, is the disconnect between the political establishment and the public
in most developed countries, the role of the mass media industry in reducing or widening it, and
the dangers that this disconnect poses to societies if it continues. If elites continue to pursue
their own fantasies and lies, and neglect the needs of the public on whom they rely for support (yet
abuse by diminishing their security through offshoring jobs, weakening and eliminating worker protection,
privatising education, health and energy, and encouraging housing and other debt bubbles), the invisible
bonds of society what might collectively be called "the social contract" between the ruler and
the ruled will disintegrate and people may turn to violence or other extreme activities to get
what they want.
An English-language transcript of the speech can be found at
this link .
The OPEC production agreement, which we called correctly, has already helped hoist the profitable
oil stocks we held, but what about 2017? One way I've looked at oil and oil stocks is by looking at
the crude curve the differentials between monthly contract prices. And a recent big move in the
curve makes 2017 look very positive indeed.
I've seen all kinds of futures curves in my 30+ years of trading oil, and many analysts believe that
the crude curve is really predictive of the future but more often than not, it is merely an outline
of what traders and hedgers are thinking.
here's a look at Thursday's curve:
... ... ...
These numbers represent an enormous change from the numbers we saw even two weeks ago, before the
big OPEC deal in Vienna. Since 2014, we had been seeing a deep contango market, where oil prices in
the future were a lot higher than where they were trading in the front (present) months. But what
does a contango market mean?
Many like to look at contango markets as a signal of crude storage, and that has merit but I like
to look at the curve through the eyes of its participants: when the oil market is collapsing, as it
has been since 2014, players in the futures markets know that the costs of oil recovery fall well
above the trading price, and will buy future oil contracts banking on a recovery. This drives buying
interest away from the present and into the future and creates our contango. This kind of market is
dominated by the speculators, who are willing to buy (bet) on higher prices later on.
In contrast, the hedging players are in retreat in busting markets, dropping capex and working wells
and trying merely to survive to see the next boom. It's when prices begin to recover and they gain
confidence in future prices that they try to hedge and plan for the coming up-cycle. This is when
speculators, if they are buying, are likely to move closer to the front months if they're buying
while producers (commercials) are looking to sell futures 12-24 months out. Suddenly, you have a
curve that is being more dominated by commercial players, selling back months and creating the
backwardation we're starting to see right now.
You may remember that I was able to nearly predict this year's bottom in oil prices by looking
for that flattening move of the crude curve in February. This latest move from a discount to a
premium curve has moved more than two dollars in the last week alone. This gives me added confidence
in oil prices for 2017:
Let's look, as a practical matter, why a premium (backwardated) market is absolutely REQUIRED to
see a long-term recovery in oil.
Imagine you're a shale producer and you've seen prices move from $45 to $52. You've been waiting for
a move like this to restart some non-core acreage that you could have working by the middle of 2017.
With a deep contango market, you might have gotten $55 or even more for a hedged barrel of crude in
June of 2017.
But you're not alone in looking to come out of your bunker, hedge some forward production and
restart some idle wells every other producer is trying to do the same thing. If all of you could
depend on a future premium, every producer would hedge out new production and ultimately add to the
gluts that have been already slow to disappear.
Related: The OPEC Effect? U.S. Rig Count Spikes Most In 31 Months
If you think about it, a premium market works to DISCOURAGE fast restarts and quick restoration of
gluts that a two-year rebalancing process has only slowly managed to fix and this is a good thing.
Producers have to be wary of adding wells so quickly, even in a market that is clearly ready to
again rise in price. In a truly backwardated market, the futures work to keep the rebalancing
process on track and production increases slow. That governor on production is the key to keeping a
rallying market strong, and the frantic addition of wells at a minimum.
The proof of all this is in the type of curves we see depending on how the markets are trading.
Now, take another look at the December-December spread chart I put up and you'll see that a Contango
market was a critical component to the bull markets we saw in oil prior to 2014. Unless something
very strange is happening, a Contango curve is indicative of a strong market, while a backwardated
one indicates a market under pressure. It's something I've watched closely for more than 30 years to
help me find major trends.
And convinces me today that oil will have a constructive 2017.
"... its amazing to me, given how many times we have caught the shale oil industry lying thru its teeth, how many people (EIA and the NDIC) still believe everything it says about itself: http://www.worldoil.com/news/2016/9/22/analyst-touts-industry-s-cost-reductions-in-us-shale-plays ..."
"... "Technically" recoverable reserves is a wild ass guess based on volumetric calculations of shale OOIP over a hypothetical homogeneous area in all the producing basins throughout the country that has absolutely nothing to do with reality. Reality is that only about 5-6% of that oil is recoverable thru primary means, not 74%. ..."
"... as we have seen in the past, poor economics did not deter sharp growth in LTO production. It seems that financial markets are ready to resume funding of the shale sector, although more cautiously than in 2011-14. And shale companies are already announcing their growth plans for next year. ..."
"... I expect growth in LTO production to resume next year and accelerate in 2018. This growth will be much slower than during the years of the shale boom, but the U.S. LTO production may reach a new peak in the beginning of the next decade. ..."
"... When the EIA states we can recover 70 plus percent of TRR shale oil in America that is a grave disservice to the public. As is "undiscovered TRR," whatever the hell that is. ..."
"... If you were to poll most Americans I believe the vast majority would say we no longer have a hydrocarbon problem in America, that we have 150 years of shale oil and more than that in natural gas and that we should, and can, isolate ourselves from the rest of the energy world and become energy independent. That is a mistake. ..."
"... The shale industry, and its "groupies," has deceived many people over the past 14 years and that pisses me off, big time. ..."
Alex S is mostly talking about the short term forecast. I agree that the long term forecast
in the EIA's AEO for LTO is much too optimistic and that Hughes' estimates are quite good.
Note that one mistake Hughes makes is confusing the undiscovered TRR with TRR, he needs to
account for 2P reserves and add those to UTRR for the Bakken/Three Forks. His estimates for Bakken/Three
Forks are a bit low. Maybe a couple of Gb.
Dennis, what in the hell is the difference in undiscovered TRR and TRR? What shale oil resources
are out there left to be discovered, do you reckon? "Technically" recoverable reserves is a wild
ass guess based on volumetric calculations of shale OOIP over a hypothetical homogeneous area
in all the producing basins throughout the country that has absolutely nothing to do with reality.
Reality is that only about 5-6% of that oil is recoverable thru primary means, not 74%. Lordy.
As Dennis says, I was talking about the EIA's short-term forecasts, which are the initial topic
of this thread. The fact is that the EIA was generally too conservative in its forecasts for U.S. C+C production,
which my charts above show. I think their forecast for 2017 is still too low and will be revised
upwards, especially as oil prices will likely be higher than the EIA was assuming in December
STEO ($51 average).
Long-term forecasts in the Annual Energy Outlook are a different story.
AEO-2012, 2013 and 2014 had too conservative projections.
AEO-2015 was more realistic, in my view, although it failed to predict the extent of the 2015-16
oil price slump and its impact on LTO production. Finally, projections in the AEO-2016 indeed look speculative, especially as they did not provide
detailed assumptions.
Note, that I totally agree with your view on shale economics. But as we have seen in the
past, poor economics did not deter sharp growth in LTO production. It seems that financial markets
are ready to resume funding of the shale sector, although more cautiously than in 2011-14. And
shale companies are already announcing their growth plans for next year.
I expect growth in LTO production to resume next year and accelerate in 2018. This growth
will be much slower than during the years of the shale boom, but the U.S. LTO production may reach
a new peak in the beginning of the next decade.
Thank you, Alex; I am aware of the title of the post and the fact that it contains information
on IEA export data for Iran, JODI data on the KSA, the Marcellus gas "miracle" a discussion of
Russian politics, the usual sprinkling of ant-oil, EV stuff, Donald Trump and Obamacare. You will
of course forgive me for not fully understanding this statement: " the EIA's projections tend
to underestimate U.S. oil production in general, and LTO output, in particular."
My interest in LTO economics is multi-faceted and because shale oil extraction is extremely
expensive, and woefully unprofitable, unlike yourself, perhaps, I do not believe it will have
a significant role in our energy future until we sort out how to pay for it. Hoping for higher
oil prices, and "predicting" higher oil prices is not a plan, therefore stating it will grow in
the future, without stating how, is dangerous, in my opinion. I don't believe it can be funded
as it has been; that WILL stop, eventually. At best, whether we believe people like David Hughes,
or the EIA, we only have 6-8 years of shale oil to provide to the US's total annual crude oil
needs. When the EIA states we can recover 70 plus percent of TRR shale oil in America that is
a grave disservice to the public. As is "undiscovered TRR," whatever the hell that is.
If you were to poll most Americans I believe the vast majority would say we no longer have
a hydrocarbon problem in America, that we have 150 years of shale oil and more than that in natural
gas and that we should, and can, isolate ourselves from the rest of the energy world and become
energy independent. That is a mistake.
The shale industry, and its "groupies," has deceived many
people over the past 14 years and that pisses me off, big time. MY industry should tell the truth
about the oil and gas future. It doesn't. We will likely have to explain to our children someday
why we pissed off all of our remaining resources and did not leave them anything.
IEA also upped its forecast for global oil demand for this year and next year due
to revised estimates for Russian and Chinese demand. It saw growth of 1.4 mb/d for 2016,
120,000 barrels a day above the previous forecast. Growth in 2017 is now seen at 1.3
mb/d, an increase of 110,000 barrels a day from its previous estimate.
likbez, 12/13/2016 at 11:40 am
Realistically the only country that can substantially increase its oil production in 2017 in
Libya. But that requires the end of the civil war in the country which is unlikely. Iran card was
already played.
Iraq is producing without proper maintenance. At some point they might have substantial
difficulties.
"... The IEA also upped its forecast for global oil demand for this year and next year due to revised estimates for Russian and Chinese demand. It saw growth of 1.4 mb/d for 2016, 120,000 barrels a day above the previous forecast. Growth in 2017 is now seen at 1.3 mb/d, an increase of 110,000 barrels a day from its previous estimate. ..."
...OPEC ... crude output in November was 34.2 million barrels per day (mb/d) - a record high -
and 300,000 barrels a day higher than in October.
The IEA also upped its forecast for global oil demand for this year and next year due to
revised estimates for Russian and Chinese demand. It saw growth of 1.4 mb/d for 2016, 120,000
barrels a day above the previous forecast. Growth in 2017 is now seen at 1.3 mb/d, an increase of
110,000 barrels a day from its previous estimate.
"... Peak oil is not just about cars. Oil is the reason why our civilization exists in its current form. Oil is why we have 7 billion people on this planet. Oil is about agriculture and food supply, it is about distribution of everything we buy and not least it is about the raw materials for many if not most of our goods. It is about almost every economic and social transaction that takes place. ..."
"... It is unbelievable what misinformation has been spread by the media. I attended a public forum of the Australian Energy Council and one participant thought that OPEC had increased oil production. My presentation on the need to replace oil by natural gas as transport fuel (instead of exporting it as LNG) was met with silence and did not spark a debate. Another participant was running away when he heard the word peak oil. ..."
"... Further re climate, most agree CO2 is a greenhouse gas but estimates of the temperature change caused by a doubling of its concentration have been coming down over the last 15 years. In other words, it may not warrant the type of policy response that is being promoted at present. ..."
"... Meanwhile the IPCC projections continue with climate sensitivity estimates of 3 to 6 degrees when the more recent estimates of ECS and TRC are consistently under 2 degrees. So contrary to what is alleged above, there is lots of doubt about the IPCC models. ..."
"... I agree with author. If you look at 2 previous OPEC meetings, the players claim disorder and inability to control output only to find resolution the day after the meeting. I believe OPEC is setting up for a freeze as we are only 1% oversupplied now. If the OPEC big wigs need to fatten the bank accounts, what better way than to set up your own long call on the cheap? ..."
"... Balance this with Iran and Iraq incapable of proper well maintenance and we will soon see inadequate supply not later than 2qtr 17′. ..."
is out with crude only production numbers for October 2016. All charts are in thousand barrels
per day.
OPEC crude only production reached 33,643,000 barrels per day in October. This includes Gabon.
Since May, OPEC production has increased 1.05 million barrels per day.
Algeria is in slow decline.
There was a sudden drop in Angola oil production in October, down 200,000 barrels per day
since August. I have no idea what the problem was. There is nothing in the news to indicate any
problem.
Ecuador was sharply down in August but seems to be holding steady for the last two years.
Gabon was added to OPEC a few months ago but their production is so low it will have little
effect one way or the other.
Indonesia will also not affect OPEC production in a big way one way or the other.
Iran's increase since sanctions were lifted has slowed to a crawl. There are other problems
on the horizon for Iran. They are talking about changing all their oil field contracts to "buy
back" contracts. That is they want the option to nationalize all everything. This will likely
cause a mass exodus of foreign oil companies from Iran and hit their production considerably.
Iraq's production was up 97,000 bpd in September and another 89,000 bpd in October. Iraq,
like everyone else in OPEC, is positioning themselves for an OPEC "freeze" in oil production.
So they are producing every barrel possible in order to freeze at the very highest level possible.
Kuwait has recovered from the problems they had in April. I expect their production to flatten
out soon with a slight decline over the next few years.
Libya's oil production was up 168,000 bpd in October. Is peace breaking out in Libya? I doubt
it but only time will tell.
Nigeria increased production 170,000 bpd in October. It is likely erratic increases and declines
in production will continue.
The decline in Qatar's oil production seems to have slowed since late 2014.
Saudi saw a slight decline in October.
The United Arab Emirates had some problems earlier this year but they seem to have recovered.
I think they will hold production steady for a while now. I really don't think they can increase
production much above 3 million barrels per day.
Venezuela's oil production is still dropping but the decline seems to be slowing. Venezuela has
very serious economic problems. They are nearing the "failed state" status.
World oil supply is very near its November 2015 peak.
All this oil tens of billions of barrels all of it non-renewable, never to be seen- or made
use of again for a hundred million or more years, for all practical purpose, ever!
the greatest bulk of it put into cars where it is wasted, by people driving aimlessly in
circles from gas station to gas station for entertainment purposes only By way of this idiocy
we destroy ourselves and our futures. We aren't doomed, we are damned.
The big mistake most energy illiterates make is to talk about their cars when the peak oil subject
comes up. Most hope or assume that another form of fuel or energy will power their ride post oil.
Peak oil is not just about cars. Oil is the reason why our civilization exists in its current
form. Oil is why we have 7 billion people on this planet. Oil is about agriculture and food supply,
it is about distribution of everything we buy and not least it is about the raw materials for
many if not most of our goods. It is about almost every economic and social transaction that takes
place.
When oil becomes expensive our economies and societies will implode, jobs and goods imported
from far away will disappear. This will apply worldwide. The citizens of Addis Ababa are just
as dependent as the ones in Amsterdam or Atlanta.
We have exhausted most of our soils and lost the skill to eke out a living from Mother Nature
without fertilizers and machines. Could it be that the least "developed" countries will lead post
oil because our "developed" nations are the least able to cope without oil?
Mike, that's exactly what I have been trying to tell folks for years. Most just don't want to
believe it. They see solar, wind and other such things as keeping BAU going for awhile.
Why don't you post over on the post section. We get a lot more traffic over there.
Big mistake thinking that this crisis will not arrive with plenty of time to avoid it. Oil prices
will rise slowly over time. However we create energy, we will find a way to pay for locomotion
or create food.
Oil is down 50% This is because of new sources of supply combined with continuing energy efficiency
improvement. Doomed or damned, don't hold your breath. I am sure you will find something else
-- perhaps global warming, now climate change, to scare people with.
Argh. Your comment suggests that you are a militantly ignorant troll. 97% of the competent climatologists
fully support the IPCC global warming summary model. There is no reasonable doubt about this science.
In my opinion there has been a revolution in drilling technology over recent years. However,
the measured rate of additional improvement is now very modest as measured by the US EIA.
Most of the recent improvement is explained by the discovery and exploitation of sweet
spots which are being rapidly drained. For an objective look at prospects going forward for oil
and gas you should read David Hughes' Drilling Deeper report.
This is an exhaustive analysis based on a data base of all existing US oil and gas wells. It
impressively documents a future of peak oil and gas based on fully exploiting fracking technology.
I don't see any magical technology that will get the projected fossil fuel resources required
for business as usual. It is just not there.
Oil is the reason why our civilization exists in its current form.
Not really. There's nothing magical about oil. 100 years ago civilization was pretty recognizable,
and it didn't require oil.
Oil is about agriculture and food supply
For the moment. Batteries and synthetic fuel can move tractors. Electricity (from many sources)
can create fertilizer.
it is about distribution of everything we buy
Rail works awfully well.
is about the raw materials for many if not most of our goods.
Meh. It produces some of our raw materials. But plastic can be produced from a lot of different
hydrocarbons, and it's production doesn' necessarilly create CO2, so we could produce plastic
from coal for centuries. That's plenty of time for a smooth transition.
"Not really. There's nothing magical about oil. 100 years ago civilization was pretty recognizable,
and it didn't require oil." You missed his point entirely. The reason there is 7 billion people
now is because of oil and what it has done for industrial, agriculture ect ect ect.
There was 1.7 billion people 100 years ago. How many people do you think would be here if not
for oil and all it has done?
">For the moment. Batteries and synthetic fuel can move tractors. Electricity (from many sources)
can create fertilizer<".
This is lack of a better word retarded for you to even consider that a battery will be used
even in the distant future to power agricultural machinery on a mass scale. Maybe the little ride
on mower you cut grass with, but that is it.
" Rail works awfully well."
Ya it does, but when it gets to a terminal, it will have to be unloaded and transported
then. Which basically happens now, so what is your point? And your last comment I wont even pick
apart because you obviously know little to very little about the uses of oil and the advantages
it has brought humanity.
@ Steve from Vaginia: Did you ever consider that some People have to drive to *work* and *produce*
so that you can sit around and swing your testicles and so that your mommy can prepare your lunch
and dinner?
So when you sit around the whole day you can think what happens in 300 years, when most of the
oil and gas has been used up. We don't have time for that, but we are sure that People will find
a solution.
One or the solution will be not driving to work and wasting time in gridlock so we can
have more time to swing our balls be 'productive' on our own and our real community's
terms. Real community that includes momma
Oil will get more expensive, some day slowly. Right now the cost is down (50%!!!) because of new
sources and efficiency improvements. I think that those who predict doom will be disappointed.
The falling EROI destroys your lousy assumption in spades. Your time might be better spent burning books or working on one of the dozen worthless Presidential
campaigns.
Oil is very precious raw material, our demand for oil increases day after day, year after year
and century after another. The search and use other sources such as atomic, wind, tide, solar,
geothermal and others will continue but the prospects / trend to keep on using oil as a main source
of energy still quite high and will continue with time due to the following reasons:
Worldwide population trend is going up drastically. (Main factor).
Oil as a source of energy still quite cheap in comparison with other sources.
It may be easy to apply the new technology in certain fields but not for all fields.
Oil proofs to be available all over the world and at different levels, hence oil production
cost will suit all the times and condition worldwide but not for all the countries.
Oil is quite important as a raw material for petrochemical products, and our needs for plastic,
paints and other products increases day after day drastically.
Oil civilization will continue for a few centuries to come if not for ever and playing with
its prices is subject to market condition, political matters, and other technical issues.
Thanks for the graphs. Saudi Arabia may be ramping up production ahead of the air-conditioning
season. Around 600 kb/d are needed in the hottest month.
It is unbelievable what misinformation has been spread by the media. I attended a public
forum of the Australian Energy Council and one participant thought that OPEC had increased oil
production. My presentation on the need to replace oil by natural gas as transport fuel (instead
of exporting it as LNG) was met with silence and did not spark a debate. Another participant was
running away when he heard the word peak oil.
Im lost by ur comments. 1st of all the graphs clearly show that Opec has increased production
by 2+m/d in the last year.
2ndly, Saudi's oil output charts above are for just Oil not NG. Ive never been there, are you
suggesting they run generators from oil for electricity and subsequent air conditioning. Why
wouldn't
they run thier power plants on Natural Gas? Please educate me.
No doubt that investor sentiment and market makers are playing a significant role in price
decline, as opposed to actual supply/demand issues. How do you find out how much the Opec nations
have sold oil short in the various markets. Not a bad deal for them, if they can lay rigs down
World wide and make the money in the commodity markets while doing so. But prices can only slide
so far and for so long before that game is up. It seems like if short selling or hedging slows,
buyers will outweigh sellers and the price should rise soon
Greg, Saudi Arabia is very short of natural gas and have been for several years now. They would
love to run all their power plants and desal plants on natural gas if they just had enough of
it. They don't. They do burn a lot of natural gas but their supply is far short of what they need.
...Saudi is producing flat out right now just like every other OPEC country except Iran. Sanctions
are holding Iran back. Political violence is holding Libya back, but they are still producing every
barrel they can. It's just that violence keeps them from producing any more.
Re Saudi, yes their domestic usage of oil is around 3 M bopd (they produced 10.5 M in June
but exported around 7 M bopd). Their refinery capacity is increasing but a large amount is burnt
for electricity generation. They have delays in the development of some large gas fields, and
so gas supply is behind the demand curve. Various service companies such as Baker Hughes, Halliburton
and Schlumberger have been demonstrating unconventional gas production in Saudi as a response.
Meanwhile the IPCC projections continue with climate sensitivity estimates of 3 to 6 degrees
when the more recent estimates of ECS and TRC are consistently under 2 degrees. So contrary to
what is alleged above, there is lots of doubt about the IPCC models. The latter point comes from
peer reviewed science, by, among others, Nic Lewis.
Another point of interest is the relative steadiness of Venezuelan production. Allegedly various
of the empresas mixtas (Joint Ventures between PDVSA and International Oil Co.'s) are not proportionally
funded by PDVSA as they should be. As a result production is down or is not reaching targets.
Apparently contractor companies will not accept new contracts from PDVSA unless they set up an
escrow account or other arrangement that guarantees payment in foreign currency. It is surprising
therefore that Venezuelan production shows a slight rise since December.
Yes one day we will be without oil that is pumped from the earth. This is not going to happen
for 100's of years. Our intellect will probably find chemical or biological solution to this problem
long before we run out. If not humanity will survive. Global warming, yes its real and one day
the Sun will double in size and engulf the earth. I am not worried about either. I hate winter
anyway.
The problem humanity will face and not discussed near enough is the lack of clean drinking
water. Everyday it becomes harder to deliver enough clean water to all areas in need. States fight
over the rights to what little water pass through their terrain every year. Many times it has
to be pumped from other states at a premium. The worlds population grows larger every second.
crops demand more and more. Ethanol was forced on us without thought as usual by the oil fear
mongers. You do not grow food to solve a commodity problem.
The land resources, water resources, and corrosive properties that Ethanol introduced far out
weigh any benefit accomplished but still its forced down our throats destroying everything its
poured into. So please build those oil pipelines all across the country and pump that oil at rates
that keep our prices low so I can drive in circles any time I feel like it. I am not going to
worry about it because about the time we run out of oil we will need those pipelines to pump clean
water to all that need it.
I agree with author. If you look at 2 previous OPEC meetings, the players claim disorder and inability
to control output only to find resolution the day after the meeting.
I believe OPEC is setting up for a freeze as we are only 1% oversupplied now. If the OPEC big
wigs need to fatten the bank accounts, what better way than to set up your own long call on the
cheap?
OPEC will shut in wells before the Fed adjusts interest rates resulting in magnified downward
pressure on oil.
Balance this with Iran and Iraq incapable of proper well maintenance and we will soon see inadequate
supply not later than 2qtr 17′.
Shallow,
If we look just at numbers the biggest "cut" (non-volunteer) actually
come from Shale in the last year and half. Without that non-volunteer
"cut" price would not be where it is today. I suspect that the discussion
within/between OPEC and non-OPEC was aimed just to keep price between
$50-60 in the first half 2017. We really can't say at this point if they
are going to do that by just "talking about it" or doing some actual
"cuts". It seems at this point that it would be combination of both.
I wouldn't characterize an increase of 4% to be soaring.
Oil prices soar on global producer deal to cut crude output | Reuters :
"Oil prices shot up by 4 percent to their highest level since 2015 early on
Monday after OPEC and other producers over the weekend reached their first
deal since 2001 to jointly reduce output in order to rein in oversupply and
prop up the market."
Info like this makes me wonder what the pro-gas and oil Trump appointees
plan to do. Why do we need more production?
OPEC Skeptics Flee as Production Cut Rockets Oil Past $50 Bloomberg :
"U.S. crude inventories at 485.8 million barrels are at the highest seasonal
level in at least 30 years, EIA data show. Total fuel demand slipped 1.4
percent to an average 19.6 million barrels a day in the four weeks ended
Dec. 2, the lowest since April.
'This tells me that a lot of U.S. output is going to be coming on line
early next year because they've sold forward production,' Stephen Schork,
president of the Schork Group Inc., a consulting company in Villanova,
Pennsylvania, said by telephone. 'The market still faces big, strong
headwinds. Inventories are still very high, demand is suspect.'"
Some OPEC countries increasing output ahead of the projected cut.
from
Reuters:
Saudi Arabia pumped record-high amounts of oil in November, amid talks
over a global deal to cut production, defying market expectations of lower
output on slower domestic demand and refinery maintenance.
The world's top oil exporter told the Organization of the Petroleum
Exporting Countries it pumped 10.72 million barrels per day last month, an
OPEC source said, up from 10.625 million bpd in October.
In July, the kingdom's production was 10.67 million bpd, the previous high.
Iraq said its November output was 4.8 million bpd, up from 4.776 million bpd
in October, another OPEC source said, as oil exports reached a record high
of 4.051 million bpd.
Gulf OPEC member Kuwait reported output at 2.9 million bpd in November,
lower than its 3 million bpd in October, while the United Arab Emirates kept
its output virtually steady at 3.195 million bpd, according to official
figures reported to OPEC.
"... An evaluation of giant fields by date of peak shows that new technologies applied to those fields has kept their production higher for longer only to lead to more rapid declines later. ..."
"... Land-based and offshore giants that went into decline in the last decade showed annual production declines on average above 10 percent. ..."
Some OPEC countries increasing output ahead of the projected cut.
from Reuters:
Saudi Arabia pumped record-high amounts of oil in November, amid talks over a global deal to cut
production, defying market expectations of lower output on slower domestic demand and refinery maintenance.
The world's top oil exporter told the Organization of the Petroleum Exporting Countries it pumped
10.72 million barrels per day last month, an OPEC source said, up from 10.625 million bpd in October.
In July, the kingdom's production was 10.67 million bpd, the previous high.
Iraq said its November output was 4.8 million bpd, up from 4.776 million bpd in October, another
OPEC source said, as oil exports reached a record high of 4.051 million bpd.
Gulf OPEC member Kuwait reported output at 2.9 million bpd in November, lower than its 3 million
bpd in October, while the United Arab Emirates kept its output virtually steady at 3.195 million
bpd, according to official figures reported to OPEC.
What is the estimate of global depletion of
operating oil wells for 2017? In other words
what part of OPEC and non-OPEC oil production
cut can be attributed to the natural decline
due to well depletion and malinvestment during
the last two years? And would happen anyway.
If you reread posts from this blog from
early 2015 (which is a pretty educational and
sobering read, I can tell) it is interesting
how slow things change as for oil production
decline in comparison with our expectations
(of cause Iran played the role of a Trojan
horse here, no question about it; it looks
like lifting sanctions was, at least
partially, designed to get this particular
effect).
Like inertia of a huge tanker, the inertia
of this giant global oil producing machine is
simply tremendous, as most oil producing
countries have state budgets linked to oil
price and oil prices crush created for them
classic "chess-style" Zugzwang situation in
which cutting oil production was as bad option
as continuing to sell oil at dumping prices
dictated by KSA and the wolf packs of global
"paper oil" speculators.
But, anyway, this sobering two year
experience suggests that like in software
development all forecasts of oil production
decline should be always multiplied by the
factor two, or even three
Still judging from hysterical reaction from
US MSM on OPEC cut (and instant publishing of
tons of stories about cheating as inevitable
outcome, size of inventories alarms, revival
of US shale fairy tales, etc ), 2017 might be
the time when supposed (illusive) neoclassical
"balance" of production and consumption is
achieved.
Although I never managed to understand how
realistic this simplistic concept of oil
"overproduction" works, and how much it was
trifecta of "Iran is back news" + "wolf packs
of oil speculators" + "KSA dumping the oil
(with the cheerful help from Iran ayatollahs)"
It is interesting how eagerly ayatollahs
were ready to waist their national treasure
selling it at really low prices after enduring
years of sanctions which supposedly should
teach them not to trust West (and undermining
Russia in the process).
BTW one interesting side effect of this oil
crush was a rapid raise of refining facilities
on oil producing nations, which makes export
of raw oil shrink in addition to well decline
as refined products almost always have better
margins then raw oil.
An interesting side question is what price
level EIA meant, when it forecasted really
rapid increase of shale production in the US
in the second half of 2017. It is over $80? Or
like Shallow Sand suggested shale oil will
again rely on loans from "investors" (who are
expected to be so greedy that they somehow
managed to forget the lesson or 2014-2016) to
get things rolling again.
"What is the estimate of global depletion of operating oil wells for
2017?"
There is no specific estimate for 2017.
Most estimates are for production declines in the fields that are post
peak.
Decline rates are very different for onshore and offshore fields, big and
small fields,
conventional, LTO and oil sands operations, etc.
There are estimates for natural declines; for declines with applied
secondary and tertiary recovery, etc.
Production in mature fields can be supported by drilling of new wells.
"In other words what part of OPEC and non-OPEC oil production cut can
be attributed to the natural decline due to well depletion and
malinvestment during the last two years? And would happen anyway."
Of course, some of the decline can be attributed to the natural
decline due to well depletion and lower investment during the last two
years. And would happen anyway.
But I cannot say exactly which portion of the projected declines is due
to these factors.
This question should be analyzed country-by-country.
> This question should be analyzed country-by-country.
You probably can limit yourself to giant fields, as in general
only they matter.
Here are the data for 2009: which suggest around 6% annual
decline, which is around 6 Mb/d a year.
I wonder, if three years of absence of new investments will get
us closer to this figure. But even half of that (3%) is more then
OPEC plans to cut. So IMHO they essentially do not need to do
anything to achieve the cut - the natural decline will cover the
bases and limited access to new investments might prevent "waive
dead chicken" tactic used in shale oil.
1.The world's 507 giant oil fields comprise a little over one
percent of all oil fields, but produce 60 percent of current
world supply (2005). (A giant field is defined as having more
than 500 million barrels of ultimately recoverable resources of
conventional crude. Heavy oil deposits are not included in the
study.)
2."[A] majority of the largest giant fields are over 50 years
old, and fewer and fewer new giants have been discovered since
the decade of the 1960s." The top 10 fields with their location
and the year production began are: Ghawar (Saudi Arabia) 1951,
Burgan (Kuwait) 1945, Safaniya (Saudi Arabia) 1957, Rumaila
(Iraq) 1955, Bolivar Coastal (Venezuela) 1917, Samotlor (Russia)
1964, Kirkuk (Iraq) 1934, Berri (Saudi Arabia) 1964, Manifa
(Saudi Arabia) 1964, and Shaybah (Saudi Arabia) 1998 (discovered
1968). (This list was taken from Fredrik Robelius's "Giant Oil
Fields -The Highway to Oil.")
3.The 2009 study focused on 331 giant oil fields from a
database previously created for the groundbreaking work of
Robelius mentioned above. Of those, 261 or 79 percent are
considered past their peak and in decline.
4.The average annual production decline for those 261 fields
has been 6.5 percent. That means, of course, that the number of
barrels coming from these fields on average is 6.5 percent less
EACH YEAR.
5. Now, here's the key insight from the study.
An
evaluation of giant fields by date of peak shows that new
technologies applied to those fields has kept their production
higher for longer only to lead to more rapid declines later.
As the world's giant fields continue to age and more start
to decline, we can therefore expect the annual decline in their
rate of production to worsen.
Land-based and offshore giants
that went into decline in the last decade showed annual
production declines on average above 10 percent.
6.What this means is that it will become progressively more
difficult for new discoveries to replace declining production
from existing giants. And, though I may sound like a broken
record, it is important to remind readers that the world remains
on a bumpy production plateau for crude oil including lease
condensate (which is counted as oil), a plateau which began in
2005.
The question to you - do any newer data for such fields exist,
as new technologies to extend the life of the field were developed
since 2010. Also infill drilling is now used extremely aggressively
by all major players, as if there is no tomorrow
Supream1
1
hour ago
Oil prices are about 10 to 20 below price
[needed for profitable shale and deep see
oil extraction]. Need to go up about to 63
this will be good for US oil. To low a
price will do no one any good high a price
hurt all
Just think of oil as you would think of the
USD. To high is bad to low is also way to
bad need a mid level ( Only few people will
understand this )
The one who wont are the people who want us
to go back to gold standard
"... I had always thought Hayek made some good critical points about the illusions of socialists/utopians and then chose to ignore the fact that his criticism also applied to his ..."
"... So maybe Hayek didn't overlook the fact that his critique also applied to his utopia. Maybe he knew full well he was misrepresenting what he was selling, engaging in exactly the same propaganda techniques that he attributed to others. ..."
"... A Rovian strategy - conceal your weakness by attacking others on precisely that issue. ..."
"... The Road to Serfdom put out in the US after WWII, which was full of this inflammatory sort of thing that doing anything to ameliorate the harder edges of capitalism put one inexorably on the road to serfdom. ..."
"... In the actual RtS one finds Hayek himself supporting quite a few such amiliorations, most notably social insurance, especially national health insurance well beyond what we even have in the US now with ACA. ..."
"... The problem for lovers of Hayek, and arguably Hayek himself, is that he simply never repudiated this comic book version of his work, even as he and many of his followers got all worked up when people, such as Samuelson, would criticize Hayek for this comic book version of the RtS, pointing out his support for these ameliorations in the original non-comic book version. ..."
"... However, Samuelson in his last remarks on Hayek, which I published in JEBO some years ago, effectively said that Hayek had only himself to blame for this confusion. ..."
"... I have been thinking that maybe both "sides" in our mostly brainwashed America today could agree with the meme of "DRAIN-THE-SWAMP" and hope to see it carried proudly on protest signs by the non-zombies of both sides in the ongoing social upheaval. ..."
"... I agree that "accuse the other side of doing what you are doing" is a familiar ploy of the right. ..."
Sandwichman | December 10, 2016 12:51 am
In his neo-Confederate "Mein Kampf," Whither Solid South ,
Charles Wallace Collins quoted a full paragraph from Hayek's The Road to Serfdom
regarding the emptying out of the meaning of words. My instinct would be not to condemn Hayek
for the politics of those who quote him. Even the Devil quotes Shakespeare.
But after taking another look at the Look magazine
comic book edition of Hayek's tome, I realized that Collins's depiction of full employment
as a sinister Stalinist plot was, after all, remarkably faithful to the
comic-book version of Hayek's argument. With only a little digging, one can readily
infer that what the comic book refers to as "The Plan" is a policy also known as full employment
(or, if you want to get specific, William Beveridge's Full Employment in a Free Society
). "Planners" translates as cartoon Hayek's alias for Keynesian economists and their political
acolytes.
To be sure, Hayek's sole reference to full employment in the book is unobjectionable
- even estimable almost:
That no single purpose must be allowed in peace to have absolute preference over all others
applies even to the one aim which everybody now agrees comes in the front rank: the conquest of
unemployment. There can be no doubt that this must be the goal of our greatest endeavour; even
so, it does not mean that such an aim should be allowed to dominate us to the exclusion of everything
else, that, as the glib phrase runs, it must be accomplished "at any price". It is, in fact, in
this field that the fascination of vague but popular phrases like "full employment" may well lead
to extremely short-sighted measures, and where the categorical and irresponsible "it must be done
at all cost" of the single-minded idealist is likely to do the greatest harm.
Yes, single-minded pursuit at all costs of any
nebulous objective will no doubt be short-sighted and possibly harmful. But is that really
what "the planners" were advocating?
Hayek elaborated his views on full employment policy in a 1945 review of Beveridge's
Full Employment in a Free Society, in which he glibly characterized Keynes's theory of
employment as "all that was needed to maintain employment permanently at a maximum was to secure
an adequate volume of spending of some kind."
Beveridge, Hayek confided, was "an out-and-out planner" who proposed to deal with the difficulty
of fluctuating private investment "by abolishing private investment as we knew it." You see, single-minded
pursuit of any nebulous objective will likely be short-sighted and even harmful unless that
objective is the preservation of the accustomed liberties of the owners of private property, in
which case it must be done at all cost!
Further insight into Hayek's objection to Keynesian full-employment policy can be found in
The Constitution of Liberty . The problem with full employment is those damn unions. On this
matter, he quoted Jacob Viner with approval:
The sixty-four dollar question with respect to the relations between unemployment and full
employment policy is what to do if a policy to guarantee full employment leads to chronic upward
pressure on money wages through the operation of collective bargaining .
and
it is a matter of serious concern whether under modern conditions, even in a socialist country
if it adheres to democratic political procedures, employment can always be maintained at a high
level without recourse to inflation, overt or disguised, or if maintained whether it will not
itself induce an inflationary wage spiral through the operation of collective bargaining
Sharing Viner's anxiety about those damn unions inducing an inflationary wage spiral "through
the operation of collective bargaining" was Professor W, H, Hutt, author of the Theory of
Collective Bargaining, who "[s]hortly after the General Theory appeared
argued that it was a specific for inflation."
Hutt, whose earlier book on collective bargaining "analysed [and heralded] the position of the
Classical economists on the relation between unions and wage determination," had his own
plan for full employment . It appeared in The South African Journal
of Economics in September, 1945 under the title "Full Employment and the Future of Industry."
I am posting a large excerpt from Hutt's eccentric full employment "plan"
here because it makes explicit principles that are tacit in the neo-liberal pursuit of
"non-inflationary growth":
Full employment and a prosperous industry might yet be achieved if what I propose
to call the three "basic principles of employment" determine our planning .
The first basic principle is as follows. Productive resources of all kinds, including
labour, can be fully employed when the prices of the services they render are sufficiently
low to enable the people's existing purchasing power to absorb the full flow of the
product.
To this must be added the second basic principle of employment. When the prices of
productive service have been thus adjusted to permit full employment, the flow of purchasing power,
in the form of wages and the return to property is maximised .
The assertion that unemployment is "voluntary" and can be cured by reducing wages is the classical
assumption that Keynes challenged in the theory of unemployment. Hutt's second principle, that full
employment, achieved by wage cuts, will maximize the total of wages, profit and rent thus would be
not be likely to command "more or less universal assent," as Hutt claimed. But even if it did, Hutt's
stress on maximizing a total , regardless of distribution of that total between wages
and profits, is peculiar. Why would workers be eager to work more hours for
less pay just to generate higher profits? Hutt's principles could only gain "more or
less universal assent" if they were sufficiently opaque that no one could figure out what he was
getting at, which Hutt's subsequent exposition makes highly unlikely.
Hutt's proposed full employment plan consisted of extending the hours of work, postponing retirement
and encouraging married women to stay in the work force. He advertised his idea as a reverse lump-of-labor
strategy. Instead of insisting - as contemporary economists do - that immigrants (older workers,
automation or imports) don't take jobs, Hutt boasted they create jobs, specifically because they
keep wages sufficiently low and thus maximize total returns to property and wages
combined. He may have been wrong but he was consistent. Nor did he conceal his antagonism toward
trade unions and collective bargaining behind hollow platitudes about
inclusive growth .
The U.S. has been following Hutt-like policies for decades now and the
results are in :
For the 117 million U.S. adults in the bottom half of the income distribution, growth has been
non-existent for a generation while at the top of the ladder it has been extraordinarily strong.
Or perhaps Hutt was right and what has held back those at the bottom of the income distribution
is that wages have not been sufficiently low to insure full employment and thus
to maximize total returns to labor and capital. The incontestable thing about Hutt's theory is that
no matter how low wages go, it will always be possible to claim that they didn't go sufficiently
low enough to enable people's purchasing power to absorb the full flow of their services.
coberly , December 10, 2016 11:52 am
I can't claim to know all of what Hayek meant. but I did read one of his books and it was clear
he did not mean what the right has taken him to not only mean, but to have proved.
In any case it is dangerous (and a bit stupid) to base policy on what someone said or is alleged
to have said. Especially economists who claim to have "proved" some "law" of economics.
That said, i wonder if some of what is said here is the result of over-reading what someone
(else) as said: to be concerned with policies "to the exclusion of all else" is not the same as
rejecting the policies while keeping other things in mind. and to recognize the potential of labor
unions to force inflationary levels of wages is not the same as opposing labor unions.
neither the advocates in favor of or those opposed to the extreme understanding of these cautions
including the authors of them if that is the case - are contributing much to the development
of sane and humane policy.
I had always thought Hayek made some good critical points about the illusions of socialists/utopians
and then chose to ignore the fact that his criticism also applied to his neo-liberal
utopia. But I followed up the passage quoted by Collins and it turns out that Hayek was discussing
a statement made by Karl Mannheim, which he quoted out of context and egregiously misrepresented
-- a classic right-wing propaganda slander technique. So here is Hayek talking about emptying out
the meaning from words and filling them with new content and he is doing just that to the words
of another author.
So maybe Hayek didn't overlook the fact that his critique also applied to his utopia. Maybe
he knew full well he was misrepresenting what he was selling, engaging in exactly the same propaganda
techniques that he attributed to others. By accusing others first of doing what he was doing,
it made it awkward for anyone to point out that he was doing it, too. A Rovian strategy - conceal
your weakness by attacking others on precisely that issue.
One of the problems with Hayek is that there was always this conflict between the "comic book
Hayek" and the more scholarly and careful Hayek. In fact, there really was a comic book version
of The Road to Serfdom put out in the US after WWII, which was full of this inflammatory sort
of thing that doing anything to ameliorate the harder edges of capitalism put one inexorably on
the road to serfdom.
In the actual RtS one finds Hayek himself supporting quite a few such amiliorations,
most notably social insurance, especially national health insurance well beyond what we even have
in the US now with ACA.
The problem for lovers of Hayek, and arguably Hayek himself, is that he simply never repudiated
this comic book version of his work, even as he and many of his followers got all worked up when
people, such as Samuelson, would criticize Hayek for this comic book version of the RtS, pointing
out his support for these ameliorations in the original non-comic book version.
However, Samuelson
in his last remarks on Hayek, which I published in JEBO some years ago, effectively said that
Hayek had only himself to blame for this confusion.
To me it comes down to whether government is structured to serve all or some obfuscated minority
of all. With that as the divider it is easy to decipher Hayek's work and others.
I have been thinking that maybe both "sides" in our mostly brainwashed America today could
agree with the meme of "DRAIN-THE-SWAMP" and hope to see it carried proudly on protest signs by
the non-zombies of both sides in the ongoing social upheaval.
coberly , December 10, 2016 6:41 pm
Sammich
I agree that "accuse the other side of doing what you are doing" is a familiar ploy of the
right.
I don't know what Hayek was really saying, or if he let the comic book version stand because
he was so flattered to have his child receive such adulation, or just because he was in his dotage
and didn't really understand how he was being misrepresented if he was.
but the fun thing to do with Hayek is to point out what he "really" said to those who have
only heard the comic book version
if anyone is still talking about him at all. seems there was a big rush of talk about Hyak
a few years ago and now it has faded.
Sandwichman
:
December 07, 2016 at 12:06 PM
Terence Hutchison concluded his appendix on "Some postulates
of economic liberalism" in Significance and Basic Postulates
of Economic Theory with the admonition, "It is high time to
put these theories [laissez faire and equilibrium doctrines]
firmly back in their place as Utopian constructions." He
cited S. Bauer's 1931 article, "Origine utopique et
mιtaphorique de la thιorie du "laissez faire" et de
l'ιquilibre naturel."
Prominent in Bauer's discussion is
the role of Baltasar Gracian's Orαculo Manual, which was
translated into French by Amelot de la Houssaie in 1684, in
popularizing both the notion and the term, laissez faire.
Pierre le Pesant Boisguilbert is credited with introducing
the term into political economic thought in a book published
in 1707. It is conceivable that Keynes knew of the Gracian
maxim because he used the image Gracian had used of
tempestuous seas in his famous rejoinder about "the long run"
being "a misleading guide to current affairs."
In his book Hutchinson noted that "several writers have
argued that some such postulate as 'perfect expectations' is
necessary for equilibrium theory." This observation lends a
special note of irony to Gracian's coinage of laissez faire.
In his discussion of Gracian's Orαculo, Jeremy Robbins
highlighted the observation that:
"Graciαn's prudence rests firmly on a belief that human
nature is constant... In Graciαn's case, human nature is
viewed as a constant in so far as he believes it to act
consistently contrary to reason."
In fact, Robbin's chapter on Gracian is titled "The
Exploitation of Ignorance." Gracian's maxims establish "a
sharp distinction between the elite and the necios [that is,
fools]." Assuming that most people are fools who act contrary
to reason is obviously something quite different from
assuming perfect expectations. For that matter, the prudence
of a courtier seeking to gain power over others is something
quite distinct the foresight required of a policy
professional acting ostensively on behalf of the public
welfare.
That metaphorical and Utopian notions of laissez faire and
natural equilibrium have managed to persist and even prevail
in economics -- impervious to Hutchinson's warning (or
Keynes's) -- is testimony to the perceptiveness of Gracian's
estimate of human nature.
"Let's stop pretending unemployment is voluntary" is the
title for chapter four of Roger Farmer's book,"Prosperity for
All: How to Prevent Financial Crises."
That is not good
enough.
No. Let's stop pretending that the "pretending" is
innocent. Let's stop pretending that it isn't a deliberate
fraud that has been aided and abetted by most of the
economics profession.
If you want to access the dynamical systems literature you
should know the terminology that self-equilibrating systems
have at least one stable equilibrium point with a non-empty
domain of attraction (think downward pointing pendulum). Any
state (set of variables describing the system configuration)
that starts in this domain will end up at the stable
equilibrium point. Non-linear systems can have several
equilibria and some may be unstable as well, in that starting
any small distance from those equilibria results in movement
away from that equilibrium (e.g. an upside down pendulum). It
is not enough to determine if a point is an equilibrium
point, you must also check its stability.
The trouble with this approach is that economics is
describing a system that is not an equilibrium system in the
first place. Economics is describing a system that is
1. Evolutionary
2. Dynamic. (In fact all the measurements are not
measurements of a static state but of movements. Even
apparently static things like asset values or the discounting
sum of flow over time.)
Just in case you don't see the relevance, just think about
what happens if it is not the position that is moving but the
equilibrium point (and worse the equilibrium point is not
known, and perhaps unknowable).
" If the expectations of agents are incompatible or
inconsistent with the equilibrium of the model, then, since
the actions taken or plans made by agents are based on those
expectations, the model cannot have an equilibrium solution.
..."
There is clearly one very important word missing in
this sentence.
Let me try again:
"" If the expectations of ANY agents are incompatible or
inconsistent with the equilibrium of the model, then, since
the actions taken or plans made by agents are based on those
expectations, the model cannot have an equilibrium solution.
..."
Now what at first look seems merely far fetched, just
became laughable.
I'm sorry, but this is very, very important. General
equilibrium is the original sin of economics (especially
Macro-economics). It is where it all went wrong. They should
just drop it, and try to model the dynamic response of agents
and the system to disequilibrium, which inevitably arises
faster than equilibrating forces can possibly work. A more
fundamental way of thinking about this is to realize that
economics deals with transactions and all transactions are
the result of a disequilibrium (at equilibrium all the trades
are already made).
Where did the disequilibrium come from? When you
understand the answer to that, you can understand what drives
the economy. Not before.
"... "We propose the creation of a harmonious economic community stretching from Lisbon to Vladivostok," Putin writes. "In the future, we could even consider a free trade zone or even more advanced forms of economic integration. The result would be a unified continental market with a capacity worth trillions of euros." ..."
"... "The proposal comes as Putin travels to Germany on Thursday for a two-day visit, including a Friday meeting with German Chancellor Angela Merkel. On Wednesday, Russia and the EU reached an important agreement on the elimination of tariffs on raw materials such as wood. The deal was an important prerequisite for the EU dropping its opposition to Russian membership in the World Trade Organization. Moscow is hoping to become a member in 2011." http://www.spiegel.de/international/europe/from-lisbon-to-vladivostok-putin-envisions-a-russia-eu-free-trade-zone-a-731109.html ..."
Causes more polarization, between those who believe it & those who don't.
More importantly, it's in support of "fake news" (censorship) which is a serious move.
Also, the reason for such an unconvincing accusation is in Russia & Putin:
November of 2010, Putin wrote an editorial for Suddeutsche Zeitung. He urged No more tariffs.
No more visas. Vastly more economic cooperation between Russia and the European Union.
"We propose the creation of a harmonious economic community stretching from Lisbon to
Vladivostok," Putin writes. "In the future, we could even consider a free trade zone or even
more advanced forms of economic integration. The result would be a unified continental market
with a capacity worth trillions of euros."
"The proposal comes as Putin travels to Germany on Thursday for a two-day visit, including
a Friday meeting with German Chancellor Angela Merkel. On Wednesday, Russia and the EU reached
an important agreement on the elimination of tariffs on raw materials such as wood. The deal
was an important prerequisite for the EU dropping its opposition to Russian membership in the
World Trade Organization. Moscow is hoping to become a member in 2011."
http://www.spiegel.de/international/europe/from-lisbon-to-vladivostok-putin-envisions-a-russia-eu-free-trade-zone-a-731109.html
While we applaud the breakup of the EU, recognizing it as a force which eats the liberty and
economic prosperity of Europeans, Putin wants Russia to join it., and NATO as well.
Putin at Valdai in 2015
"I am certain that if there is a will, we can restore the effectiveness of the international
and regional institutions system. We do not even need to build anything anew, from the scratch;
this is not a "greenfield," especially since the institutions created after World War II are
quite universal and can be given modern substance, adequate to manage the current situation.
"We need a new global consensus of responsible forces. It's not about some local deals or
a division of spheres of influence in the spirit of classic diplomacy, or somebody's complete
global domination. I think that we need a new version of interdependence. We should not be
afraid of it. On the contrary, this is a good instrument for harmonising positions"
Putin supports the Rule of Law-- thru the Rockefeller-controlled UN. He's for national sovereignty
but never speaks of the desirability for nations to regain trade sovereignty, let alone economic,
immigration or currency sovereignty.
An opposition must have an opposing vision. Otherwise, what is it opposing? Is it enough that
it opposes US aggression as a means to bring about the shared vision of a regionally-administered
global oligarchy? Is it enough that Russia's 1% have to fight the West's 1% to keep 74% of the
wealth of Russia?
The hacking accusation is not meant to persuade us that it's true-- but only to reinforce our
feeling that there is opposition between Russia and the West: That Russia opposes the global tyranny
which is progressing to completion. That we need do nothing but have faith in our minds in Putin
and Russia.
I hope I'm wrong guys. Can anybody find any words of Putin's which speak of the desirability
of reversing any part of global governance?
Barron's investment weekly has published a "Get Ready for Dow 20,000" cover today. Is
that a problem for stocks, from a contrarian point of view?
Not necessarily. Paul Macrae Montgomery, who first articulated the concept of fading the always-wrong
MSM, stipulated that it's widely-circulated, general-interest publications that are the best mirrors
of popular sentiment.
So far, they are largely silent on the twin asset bubbles - stocks and house prices - rising
ominously beneath our feet. Looks like it's gonna be awhile before we reach the supreme silliness
of Time magazine's fatuous June 2005 cover "Home $weet Home: Why We're Going Gaga Over
Real Estate."
That one actually scored double points, for the MSM's presumptuous habit of invoking the cozy
"we" formulation to tell readers what they think. (That's why "we" hate the MSM.)
With Time reportedly on the block, maybe a sensational "Dow 36,000" cover could goose
the sale price up to five dollars instead of one. It's worth a try, lads!
Jim, odd snippet from something I heard last night struck me as being right up your alley.
The guy who founded Princeton Review is now some kind of investment guru. He was talking about
last years announced rate hikes, and that he told his clients they weren't going up but might
reach record lows. He based that on metals traders (gold, silver etc). He says they have never
been wrong about the direction of rates. (I got interrupted so if he explained the signals he
was seeing from them I missed it). It should be part of a pod cast from Tim Ferriss if you want
to check it out, but I really did think it was one of those things you would have in your arsenal
for market prediction.
His other big advice was treat investing like a poker game, don't bet on the cards bet on the
players look for their tells. And he hasn't figured out that Uber has some real issues to deal
with before its 'profits' are real, so take everything with a grain of salt.
TIPS didn't exist before 1997. But real Treasury yields (proxied by subtracting the trailing
12-month CPI change from nominal Treasury yields) went negative in 1974 and 1979 too, during the
epic gold spikes of that era.
So this seems to be an enduring anticorrelation. However, I use the yield curve in my bond
model rather than gold. The pronounced serial correlation in Fed-controlled short rates is highly
non-random, signaling what the cockeyed commissars are up to.
"... I'd like to see a lot more about steady-state economics on here; that means I and you should dig up articles and sources and send them to "blogger" or to Lambert for the Watercooler. They don't take assignments and they're infernally busy, but they do appreciate suggestions. ..."
"Every species that finds a large amount of free energy reacts the same way: proliferation.
The unconscious drive is to use up the energy as fast as possible. If only we could understand
that. But understanding it would get in the way of the principle itself. The only thing we
can do to stop the extinction is for all of us to use a lot less energy. But because energy
consumption provides wealth and -more importantly- political power, we will not do that. We
instead tell ourselves all we need to do is use different forms of energy."
In the wake of the election, I have heard many on here (including the curators) talking about
how the election was all about jobs - read economic growth. As Herman Daly has pointed out, perpetual
growth is an oxymoron when constrained by a finite number of energy resources. So please, can
someone on here offer an explanation for the obvious cognitive dissonance? In general, I'm convinced
most of the people that interact on this page would call themselves environmentalists.
So how, out of the other side of our mouth, can we talk about focusing on economic growth as
a panacea to our political problems? This goes to the root of what I think my most important mission
is moving forward. Namely, finding a way to bring labor and environmentalism together. Thoughts
anyone?
To avoid death, for many people, it means having a job (or more).
When one is not facing death, one can elevate oneself to think about high ideals when one is
exceptional, perhaps one can do that while looking at the Grim Reaper.
I believe we can happier with a smaller GDP. That's not growth. That's opposite of growth.
As it turns out, the destination is easy to understand. Perhaps because its too late to avoid
arriving there, as more a few have commented, the game now is about taking control during the
journey with many climate renaissance sweet spots to live comfortable around the globe. That game
is tied to wealth and power inequality.
It's not about cutting down overall carbon emissions, but who should cut more. It's not that
there will be droughts, but securing water sources huge underground aquifers, for example.
And so on and so forth.
To the extent the deplorables are visible now, it gives hope that the journey will not be one
where they're simply jettisoned along the way.
Growth means an increase in wealth. Wealth and energy do not have a one-to-t-one relation,
it seems to me. A low-energy appliance can be more valuable than a high-energy one, for example.
So sustainable growth means doing more with less. Recycle old inefficient wealth into new, more
efficient wealth.
Wealth can also mean services, and many services can be performed without much use of energy or
resources.
You're not alone. In fact, there's NC slang for the concept: "groaf."
The contradiction is built into liberal economics, including MMT. The political motive is that
reality turns economics into a zero-sum game: the "grim science." As far as I know, Daly and his
movement are the only ones to really address the problem.
The solution is to substitute redistribution for growth. A refinement is to redefine "standard
of living," so it isn't just "standard of consumption" but measures quality of life. Of course,
redistribution is a big political challenge; furthermore, it tends to encourage growth poor
people spend all they get.
I'd like to see a lot more about steady-state economics on here; that means I and you should
dig up articles and sources and send them to "blogger" or to Lambert for the Watercooler. They
don't take assignments and they're infernally busy, but they do appreciate suggestions.
Pretty easy really. I'll wing it and create a new offshoot of economics.
I'll call it Refrigerator Economics. Growth for the consumer would be if it could purchase
the good old refrigerator that lasted 25 years and pay 10% more to include energy saving technology.
More insulation and more efficient motor/compressor. Even if this doesn't sound very innovative.
Growth for the industry is when they crappify and sell 9 year refrigerators for the same money.
Then the consumer has to buy a new one and have the old one hauled to a landfill. Industry is
busy digging holes to obtain resources to make the new crappy refrigerator. In spite of industry
being known for it's beady eyed efficiency, typically these are not even the same hole in the
ground. Buying furniture works the same way.
Conventional economic theory tells us the second way is better. One more reason to hate economics.
I believe in the growth of knowledge as contributing to the GNP. We could invest in basic research.
The H1-B problem could be eliminated with major research efforts employing the brightest and best
from around the world. We used to do that kind of thing - the space race provides a pale example.
There are problems to solve - major problems - and we are on the cusp of great discoveries in
many fields. I am most bullish on chemistry and biochemistry.
If unused or under-utilized labor really is available to be employed through the machinations
of fiat currency I can't think of a better application of excess capacity than putting the many
researchers we've trained to work doing research.
I skimmed it the other day. Found it too long and whiny I'm afraid, but then I'm technically
minded and long familiar with the issues.
It seems unlikely to me that we can prevent the collapse of technological civilisation worldwide
due to our exhaustion, pollution and destruction of the ecosphere. We would need to reduce our
population quite quickly, keep (or put) most of it in poverty and only allow a small elite to
live like Americans. This seems to be the current gameplan.
A more ethically acceptable, but less certain, approach would be to try to quickly bring everyone
up to a level of prosperity and security where population falls naturally, whilst minimising resource
use and pollution. The latter will require technological improvements and is a race against time
and energy depletion. It will also require some kind of defeat of the current elite.
20% of US GDP was created from thin air via QE of well over
4 Trillion dollars. That doesn't even count whimsical creation over the
same time period elsewhere. The ECB just yesterday extended their QE
program so that it will add up to about 2 Trillion Euros - which will
have taken place over about 18 24 months.
There is no economy. That has all gone away, and there is no way in
hell these bond and bond packages on central bank balance sheets are
going to be retired (thereby extracting that money from the system
overall) and so It's Not Coming Back. Probably Ever.
This is critical to oil because we do micro-economic evaluations of
what wells are profitable and which are not, and our analysis and
conclusions make less and less sense as we've seen from the non
profitable activity going on. That's symptomatic of the disease.
Nothing was "fixed" from 2008 onward, and that's not a swipe at Obama.
It's not a swipe at anything. It's just reality. When you create 20% of
your GDP by whimsy, the measure can't possibly mean anything. And that's
global.
We all have to live in the world using money in our own microscopic
bubbles of economy, but from the macro perspective, that's pretense, and
it's pretense everything depends on. Just keep in mind Fed Governors
themselves have been quoted saying "we're in completely uncharted
territory. No one knows what is going to happen, and that includes us,
despite the superb people we have on staff trying to figure it out."
Trump is the wildcard inserted into a world of wildcards. I can assure
you if the administration strongly doesn't want Ford building cars in
Mexico, they probably won't.
"... Most shale oil companies are looking down the barrel of loans coming due beginning 2017 and continue to do stupid things with borrowed money because they have no choice. In spite of lower costs and higher EUR's brain washing campaign, they are all still losing money hand over fist. Even mighty EOG. ..."
I won't deny there is an uptick in drilling coming, it is just that I perceive
a different rationale for it, than assuming they are jumping at $50 oil to plan
to go all out for that reason. Some companies are completing wells that would
only be profitable at $100 a barrel. No rationale for those, other than they
are simply trying to hold on to the lease, and hope. I follow EOG fairly
closely, and from my own lease, I know they are trying to hold on to fairly
good leases, but only drill what they have to. I think that is the reason your
seeing an uptick. They are planning on what will hold the leases for 2017. They
are balancing those permits for "marginal" wells at $50, with permits in the
sweet spots. From a planning perspective, it makes sense on getting that over
with first. Then you can concentrate on what is going to keep you alive. It is
interesting to note that the Austin Chalk (Sugarcane) has become their new
sweet spot in Karnes County. They have 5 or 6 now producing, and 9 more planned
so far for next year. All are doing very well, and two had first month
production in excess of 100k barrels a month. Less decline than the Eagle Ford,
so far. Other companies are now jumping on it, too.
Mr. Minton do you have continuous drilling provisions in your lease and if
so may I ask, what year did you lease to EOG?
I contend that at these oil prices the speculation about "drilling to
hold leases" is vastly overblown, that most leases made in the Eagle Ford
and Bakken before 2012-2013 had no continuous drilling provisions in them,
and that most of the drilling still being done in those two plays, at these
oil prices, are actually related to loan covenants regarding booking PDP
reserves, SEC 5 year rules regarding PDNP reserves and to reduce taxable
income thru IDC deductions.
Most shale oil companies are looking down
the barrel of loans coming due beginning 2017 and continue to do stupid
things with borrowed money because they have no choice. In spite of lower
costs and higher EUR's brain washing campaign, they are all still losing
money hand over fist. Even mighty EOG.
HZ Austin Chalk wells cost considerably less that shale wells because
they don't typically require frac'ing. Some of the initial IP's and IP90's
in the Chalk have been spectacular, especially for EOG who is well know for
gutting wells to create big EUR's; take it from me, an old Chalk hand,
however, the decline on Chalk wells after 12-18 months will suck the hardhat
over the top of your head and I am quite certain 95% of those wells will NOT
payout either. They did not in 1981, 1991, 2001 nor will they this time
around the block either.
Yes it has continuous drilling clause.
Austin chalk wells by EOG are frac'ed. Who cares what happens to the
decline in 12 to 18, if you recover over 300k the first year?
If EOG frac's those Chalk wells then they cost essentially what an EF
well costs. If a Chalk well makes 300,000 BO in the first year, which
they don't, then declines 80% annually after the first 12 months and
every year thereafter, they'll never reach payout. If your only
interest in any of that is from the standpoint of a royalty owner,
then I am sure you don't care about profitability. I do.
I contend that most mineral leases made before 2013 did not contain
"drill and earn provisions" in them (drilling commitments) and that
one well could hold the entire lease. I can confirm that in S. Texas
and I suspect less knowledgeable mineral owners in the Bakken that
leased early in the play had no drilling commitment provisions in them
either. Leases made later in both plays involved more sophisticated
mineral owners who required drilling commitments. In W. Texas, for
instance, all that now being drilled is subject to drilling
commitments.
SEC rules are very clear regarding 'proven but not producing'
reserves that were "booked" and made into assets they must be drilled
within 5 years or lost. DUC wells are PDNP reserves and they too must
be completed within 5 years.
I am familiar with two new loan covenants, particularly relative to
recent credit swaps, etc. that if a company gets more money in the
equity swap, they must develop PDNP reserves or suffer penalties.
None of this precludes the fact that 95% of the shale oil wells
being drilled in America and these oil price levels will not payout
unless prices rise dramatically. Those wells ARE drilled at a sure
loss. The shale oil industry is penned up now like a heard of goats;
they voluntarily drill unprofitable wells with borrowed money because
they need cash flow and they need to book more assets to be able to
borrow more money. They are also forced to drill and complete wells
that are unprofitable for reasons I have explained. The ONLY way out
for them, even the biggest of them, is if oil prices rise into the
80's and 90's and that is not going to happen for a long time, short
of some big chicken fight somewhere in the world that would have an
affect on supply.
Not really. There is not a lot of interest in drilling for $50 to $60 oil in
the shale. Go back and look at what happened in 2009 when oil dropped to
$60. Most places are profitable to drill at $80 to $100. Very few are
profitable at $50. The press can hype all they want. It won't change
reality.
I think the press helps if enough people buy it, silly money will give
free loans to these companies to continue drilling. You can loose as much
money as you like, as long as you have creative bookkeeping and a
neverending roll in of money.
We had this here in Germany in the wild
2000s film making fonds have been the red hot burner, people lost
millions but continues investing until alle these companies where
history. Hollywood was laughing about Germany "silly money".
It's
little surprise that Credit Suisse recently stated:
"With service prices, particularly pressure pumping expected to rise in
2017 on the back of increased activity, a Permian operator commented that it is
already seeing greater than a 20% increase in completion costs. The biggest
concern for Permian management teams has been a potential scramble for
equipment and services that higher commodity pricing could introduce, and the
OPEC move has the potential to drive faster service cost inflation than we
would have otherwise seen, muting the impact of the oil spike on returns for US
shale operators."
In other words, the cost of drilling is likely to go up just as fast as the
price of oil goes up if there is a cut in production by OPEC.
Most of the new "drilling efficieny" is a result of depressed
costs and drilling in primarily "sweet spots". Easy financing
is a thing of the past. Can't see a big enough resurgence in
shale drilling to overcome drops in production in the short
term. A 20% increase is a killer, but that is only the
beginning. The way I see it, because the new drills won't
keep up wit the decline rates of the old wells; they have to
recoup all their drilling costs the first year, to enable
them to keep drilling. That leaves only a few areas to drill
in. The only reasons it surged in the past, were easy money
and oil at $100 a barrel. Both are no longer available, now.
Crude prices could rise to $60 to $70 a barrel if the Organization of Petroleum Exporting
Countries succeeds in bring inventories back to a normal level, Venezuelan Oil Minister Eulogio
del Pino said last week, echoing a widely held view within the group, from Saudi Arabia to Iran.
... ... ...
The International Energy Agency expects the re-balancing will happen early next year, while
consultants at Rystad Energy expect a 1.26 million barrels-a-day deficit in the first quarter of
next year if Russia is the only non-OPEC country to join the effort.
Also, my google news feed is packed with articles touting peak demand not
peak production. Is this some sort of distraction effort? I know the topic
of peak demand has been discussed before, but I am having severe memory
issues.
Ezrydermike, did you not read the article that you, yourself, posted?
"Peak oil by any other name is still peak oil."
Peak oil is peak oil
is peak oil.
Peak demand and peak supply are the same thing. That is,
when the production of crude oil peaks, regardless of the cause, that
will be peak oil. I don't know how I could make it any simpler than that.
When there is peak supply, including
all hand waving about storage tapping and what's in pipelines and
assorted gobbledygook, there will be demand for more than that supply,
with lines at gas stations and requests for more than the ration
allowed, but the gas station guy will say no and the customer's
consumption will be limited to whatever rationing is available - if
his license plate is an even number and it's an even day - if an odd
numbered day, he gets to consume none, regardless of how much he
demands of gas station dood.
yes Ron I get that. I was more remarking on how my Google news feed is
presenting the articles as peak demand not peak oil. Many of these
seem to be trying to replace the terminology and pointing that some
oil can be left in situ for future production. For example, this
article from the CSM.
"The threat of the world facing a declining
supply of oil, so-called peak oil, has given way to a forecast that is
calling forth its much more benign cousin: peak demand."
"... The chain of announcements signal that Saudi Arabia is trying to push oil prices above $60 a barrel -- and perhaps closer to $70 a barrel -- as it attempts to fill a fiscal hole and prepares a partial flotation of its crown jewel, state-owned oil company Saudi Aramco, in 2018... ..."
Russia among non-OPEC nations pledging to cut 558,000 barrels
Saudi minister says he'll go beyond commitment at OPEC meeting
Saudi Arabia signaled it's ready to cut oil production more than expected, a surprise
announcement made minutes after Russia and several non-other OPEC countries pledged to
curb output next year.
... ... ...
"This is shock and awe by Saudi Arabia," said Amrita Sen, chief oil analyst at Energy
Aspects Ltd. in London. "It shows the commitment of Riyadh to rebalance the market and
should end concerns about OPEC delivering the deal."
.... ... ...
The chain of announcements signal that Saudi Arabia is trying to push oil prices above $60
a barrel -- and perhaps closer to $70 a barrel -- as it attempts to fill a fiscal hole and
prepares a partial flotation of its crown jewel, state-owned oil company Saudi Aramco, in 2018...
BP's numbers for oil exports (available from 1980) and production less
consumption (available from 1965) are slightly different, which may reflect
changes in inventories and other balancing items.
According to BP, Middle
East oil exports in 2015 was 20.6 mb/d, the record for the period from 1980.
Production less consumption was 20.5 mb/d vs. all-time high of 20.8 mb/d in
1976-1977.
But 2016 should see a new record due to ramp-up in production and exports
from Saudi Arabia, Iran and Iraq.
Middle East oil exports (mb/d)
Source: BP Statistical Review of World Energy
Short-termism is a real problem for the US politicians. It is only now the "teeth of dragon"
sowed during domination of neoliberalism since 80th start to show up in unexpected places. And reaction
is pretty predictable. As one commenter said: "Looks like the CIA's latest candidate for regime change
is the USA."
Notable quotes:
"... Divide and Control is being brilliantly employed once again against 'us'. The same tactics used against foreign countries are being used here at home on 'us'. ..."
"... Divide and Conquer, yes indeed, watch McCain and Graham push this Russian hacking angle hard. ..."
"... i regard this 'secret' CIA report, following on from the 'fake news' meme, to be another of what will become a never-ending series of attempts to deligitemize Trump, so that later on this year the coming economic collapse (and shootings, street violence, markets etc) can be more successfully blamed not only on Trump and his policies, but by extension, on the Russians. (a two-fer for the globalist statists) ..."
"... Nevermind that many states voting machines are on private networks and are not even connected to the internet. ..."
"... The Russians 'might' have influenced the election..... The American Government DID subvert and remove a democratically elected leader (Ukraine).Anyone see the difference there? ..."
"... Voted for Trump, but the Oligarcy picked him too. Check the connection between Ross and Trump and Wilburs former employer. TPTB laughs at all of us ..."
"... The sad facts are the CIA itself and it's massive propaganda arm has its gummy fingers all over this election and elections all over the planet. ..."
"... The Russians, my ass. ................. The CIA are famous for doing nefarious crap and blaming their handy work on someone else. Crap that usually causes thousands of deaths. ... Even in the KGB days the CIA was the king of causing chaos. ..... the KGB would kill a dissident or spy or two and the CIA in the same time frame would start a couple of wars killing thousands or millions. ..."
"... What makes people think the Post is believable? The truth has been hijacked by their self annihilating ideology. Honestly one would have to be dumb as a fence 'Post' (pun intended) to believe ANYTHING coming from this rag and the rest of these 'Fake News' MSM propaganda machines, good lord! ..."
"... As for the CIA, it was reported at the time to be largely purged under the Dubya administration, of consitutionalists and other dissidents to the 9-11 -->> total-war program. Stacked to the brim with with neocon cadres. ..."
"... Out of the 3,153 counties in this country, Hillary Clinton won only 480. A dismal and pathetic 15% of this country. The worst showing EVER for a presidential candidate. ..."
"... The much vaunted 2 million vote lead in the popular vote can be attributed to exactly 4 boroughs in NYC; Bronx, Queens, Manhattan, & Brooklyn ..."
"... 96 MILLION Americans were either too disgusted, too lazy, or too apathetic to even bother to go out and cast a vote for ANYONE in this election. ..."
"... Looks like the CIA's latest candidate for regime change is the USA. ..."
"... Clapper sat in front of congress and perjured himself. When confronted with his perjury he defended himself saying he told them the "least untruthful thing" he could - admitting he had not problem whatsoever about lying to Congress. ..."
"... There certainly is foreign meddling in US government policy but it is not coming from Russia. The countries that have much greater influence than Russia on 'our' government are the Sunni-dominated Persian Gulf oil states including the UAE, Bahrain, Qatar, Oman, Kuwait and, of course, that bastion of human rights, Saudi Arabia. ..."
"... Oil money from these states has found its way into influentual think tanks including the Brookings Institution, the Atlantic Council, the Middle East Institute and the Georgetown Center for Strategic and International Studies and others. ..."
"... And also, there are arms sales. Arm sales to Saudi/Gulf States come with training. With training comes military ties, foreign policy ties and even intelligence ties. Saudi Arabia, with other Gulf oil states as partners, practically owns the CIA now. ..."
"... Reverse Blockade: emphatically insisting upon something which is the opposite of the truth blocks the average person's mind from perceiving the truth. In accordance with the dictates of healthy common sense, he starts searching for meaning in the "golden mean" between truth and its opposite, winding up with some satisfactory counterfeit. People who think like this do not realize that this effect is precisely the intent of the person who subjects them to this method. ..."
"... I recall lots of "consensus views" that were outright lies, bullshit and/or stupidity: "The Sun circles the Earth. The Earth is flat. Global cooling / next ice age (1970s). Global warming (no polar ice) 1990s-00's. Weapons of mass destruction." You can keep your doctor. ..."
"... The CIA, Pentagon and "intelligence" agencies need both a cleaning and culling ..."
"... Blacklist Promoted by the Washington Post Has Apparent Ties to Ukrainian Fascism and CIA Spying. ..."
"... This whopper of a story from the CIA makes the one fabricated about WMD's in Iraq that fooled Bush Jr. and convinced him to almost take this country down by violating the sage advice on war strategy from Sun-Tzu and Clausewitz and opening up a second front in Iraq almost child's play. ..."
"... At least with the WMD story they had false witnesses and some made up evidence! With this story, there is no "HUMINT (human intelligence) sources" and no physical evidence, just some alleged traces that could have been actually produced from the ether or if they knew ahead of time of Trump's possible win sent someone to Russia and had them actually run the IP routes for show. ..."
"... Bush was misled because the CIA management was scared of some of his budgetary saber rattles and his chasing after some CIA management. In this case, someone is really scared of what the people will find when the swam gets drained, if ever it gets done. This includes so-called "false flag conservatives" like Lindsey Graham and top Democrats "Cambridge 5 Admirers" salted in over the years into the CIA ..."
"... Trump has already signaled he is going hand them nearly unlimited power by appointing Pompeo in the first place. I would think they would be very happy to welcome the incoming administration with open arms. ..."
"... I could see it if they were really that pissed about Trumps proposed Russian re-set and maybe they are but even that has to be in doubt because of the rate at which Trump is militarizing his cabinet. ..."
"... In all reality Trump is a MIC, intelligence cabal dream come true, so why would they even consider biting the hand that feeds so well? Perhaps their is more going on here under the surface, maybe all the various agencies and bureaucracies are not playing nice, or together for that matter. ..."
"... after all the CIA and the Pentagon's proxy armies are already killing each other in Syria so one has to wonder in what other arenas are they clashing? ..."
"... The neocons are desperate. Their war monger Hitlery lost by a landslide now they fabricate all sorts of irrational BS. ..."
"... 'CIA Team B' ..."
"... 'Committee on the Present Danger' ..."
"... 'Office of Special Plans' ..."
"... Trump is a curious fellow. I've thought about this quite a bit and tried to put myself in his shoes. He has no friends in .gov, no real close "mates" he can depend on, especially in his own party, so he had to start from scratch to put his cabinet together. ..."
"... It could very well be that this was Trump & the establishment plan to con the American public from the start of course. I kind of doubt it, since the efforts of the establishment to destroy Trump was genuinely full retard from the outset and still continues. ..."
"... He would have done better to ignore the political divide to choose those who have spent their lives challenging the Deep State. My ignorance of US politics does not supply me with a complete picture, but Ron Paul, David Kucinich, Trey Gowdy, Tulsi Gabard and even turncoat Bernie Sanders would have been better to drain the swamp than the neocon zionists he has installed in power. ..."
It is worse than "shiny object." Human brains have a latency issue - the first time they hear
something, it sticks. To unstick something, takes a lot of counter evidence.
So, a Goebbels-like big lie, or shiny object can be told, and then it can take on a life of
its own. False flags operate under this premise. There is an action (false flag), and then false
narrative is issued into press mouthpieces immediately. This then plants a shiny object in sheeple
brains. It then takes too much mental effort for average sheeple to undo this narrative, so "crowds"
can be herded.
Six million dead is a good example of this technique.
Fortunately, with the internet, "supposed fake news sites like ZH" are spreading truth so fast
- that shiny stories issued by our Oligarch overlords are being shot down quickly.
Bezo's, who owns Washington Post, is taking rents by avoiding sales taxes; not that I'm a fan
of sales taxes. But, ultimately, Bezos is taking rental thefts, and he is afraid of Trump - who
may change the law, hence collapse the profit scheme of Amazon.
Cognitive Dissonance -> Oldwood Dec 10, 2016 10:49 AM
Oldwood. I have a great deal of respect for you and your intelligent opinions.
My only concern is our constant and directed attention towards the 'liberals' and 'progressives'.
When we do so we are thinking it is 'them' that are the problem.
In fact it is the force behind 'them' that is the problem. If we oppose 'them', we are wasting
our energy upon ghosts and boogeymen.
Divide and Control is being brilliantly employed once again against 'us'. The same tactics
used against foreign countries are being used here at home on 'us'.
chunga -> Cognitive Dissonance Dec 10, 2016 11:33 AM
I've been reading what the blue-teamers are saying over on the "Democratic Underground" site
and for a while they've been expressing it's their "duty" to disrupt this thing. They are now
calling Trump a "Puppet Regime".
Divide and Conquer, yes indeed, watch McCain and Graham push this Russian hacking angle
hard. Also watch for moar of the Suprun elector frauds pop out of the woodwork. The Russian
people must be absolutely galvanized by what's happening, USSA...torn into many opposing directions.
dark pools of soros -> chunga Dec 10, 2016 1:38 PM
First tell them to change their name to the Progressive Party of Globalists. Then remind them
that many democrats left them and voted for Trump.. Remind them again and again that if they really
want to see blue states again, they have to actually act like democrats again
I assure you that you'll be banned within an hour from any of their sites
American Gorbachev -> Oldwood Dec 10, 2016 10:12 AM
not an argument to the contrary, but one of elongating the timing
i regard this 'secret' CIA report, following on from the 'fake news' meme, to be another
of what will become a never-ending series of attempts to deligitemize Trump, so that later on
this year the coming economic collapse (and shootings, street violence, markets etc) can be more
successfully blamed not only on Trump and his policies, but by extension, on the Russians. (a
two-fer for the globalist statists)
with a political timetable operative as well, whereby some (pardon the pun :) trumped up excuse
for impeachment investigations/proceedings can consume the daily news during the run-up to the
mid-term elections (with the intent of flipping the Senate and possibly House)
these are very powerful, patient, and deliberate bastards (globalist statists) who may very
well have engineered Trump's election for the very purpose of marginalizing, near the point of
eliminating, the rural, christian, middle-class, nationalist voices from subsequent public debate
Oldwood -> American Gorbachev Dec 10, 2016 10:21 AM
The problem is that once Trump becomes president, he will have much more power to direct the
message as well as the many factions of government agencies that would otherwise be used to substantiate
so called Trump failures. This is a calculated risk scenario for them, but to deny Trump the presidency
by far produces more positives for them than any other.
They will have control of the message and will likely shut down much of alternate media news.
It is imperative that Trump be stopped BEFORE taking the presidency.
sleigher -> overbet Dec 10, 2016 10:00 AM
"I read one morons comment that the IP address was traced back to a Russian IP. Are people
really that dumb? I can post this comment from dozens of country IPs right now."
Nevermind that many states voting machines are on private networks and are not even connected
to the internet. IP addresses from Russia mean nothing.
kellys_eye -> Nemontel Dec 10, 2016 9:40 AM
The Russians 'might' have influenced the election..... The American Government DID subvert
and remove a democratically elected leader (Ukraine).Anyone see the difference there?
Paul Kersey -> Nemontel Dec 10, 2016 9:40 AM
"Most of our politicians are chosen by the Oligarchy."
And most of our politicians choose the Oligarchy. Trump's choices:
Anthony Scaramucci, Goldman Sachs
Gary Cohn, Goldman Sachs
Steven Mnuchin. Goldman Sachs
Steve Bannon, Goldman Sachs
Jared Kushner, Goldman Sachs
Wilbur Ross, Rothschild, Inc
The working man's choices.....very limited.
Paul Kersey -> Paul Kersey Dec 10, 2016 10:27 AM
"Barack Obama received more money from Goldman Sachs employees than any other corporation.
Tim Geithner, Obama's first treasury secretary, was the protege of one-time Goldman CEO Robert
Rubin. "
"The more things change, the more they stay the same."
Nameshavebeench... -> Nemontel Dec 10, 2016 11:53 AM
If Trump gets hit, the 'official story' of who did it will be a lie.
There needs to be a lot of online discussion about this ahead of time in preparation. If/when
the incident happens, there needs to be a successful counter-offensive that puts an end to the
Deep State. (take from that what you will)
We've seen the MO many times now;
Pearl Harbor
Iran in the 50's
Congo
Vietnam
Most of Latin America many times over
JFK
911
Sandy Hook
Boston Marathon 'Bombings'
Numerous 'mass shootings'
The patterns are well established & if Trump gets hit it should be no surprise, now the 'jackals'
need to be exterminated.
Also, keep in mind that everything we're hearing in all media just might be psyops/counter-intel/planted
'news' etc.
sgt_doom -> Nemontel Dec 10, 2016 1:25 PM
Although I have little hope for this happening, ideally Trump should initiate full forensic
audits of the CIA, NSA, DIA and FBI. The last time a sitting president undertook an actual audit
of the CIA, he had his brains blown out (President John F. Kennedy) and the Fake News (CBS, NBC,
ABC, etc.) reported that a fellow who couldn't even qualify as marksman, the lowest category (he
was pencilled in) was the sniper.
Then, on the 50th anniversary of that horrible coup d'etat, another Fake News show (NPR) claimed
that a woman in the military who worked at the rifle range at Atsuga saw Oswald practicing weekly
- - absurd on the fact of it, since women weren't allowed at military rifle ranges until the late
1970s or 1980s (and I doublechecked and there was never a woman assigned there in the late 1950s).
Just be sure he has trustworthy bodyguards, unlike the last batch of phony Secret Service agents
(and never employ anyone named Elmer Moore).
2rigged2fail -> Nemontel Dec 10, 2016 4:04 PM
Voted for Trump, but the Oligarcy picked him too. Check the connection between Ross and
Trump and Wilburs former employer. TPTB laughs at all of us
All these Russian interference claims require one to believe that the MSM and democrat machine
got out played and out cheated by a bunch of ruskies. This is the level of desperation the democrats
have fallen too. To pretend to be so incompetent that the Russians outplayed and overpowered their
machine. But I guess they have to fall on that narrative vs the fact that a "crazy" real estate
billionaire with a twitter account whipped their asses.
Democrats, you are morally and credulously bankrupt. all your schemes, agenda's and machinations
cannot put humpty dumpty back together again. So now it is another period of scorched earth. The
Federal Bureaucracy will fight Trump tooth and nail, joined by the democrats in the judiciary,
and probably not a few rino's too.
It is going to get ugly, like a machete fight. W. got a taste of it with his Plame affair,
the brouhaha over the AGA firings, the regime of Porter Goss as DCI
https://en.wikipedia.org/wiki/Porter_Goss
DuneCreature -> cherry picker Dec 10, 2016 10:30 AM
The sad facts are the CIA itself and it's massive propaganda arm has its gummy fingers
all over this election and elections all over the planet.
The Russians, my ass. ................. The CIA are famous for doing nefarious crap and
blaming their handy work on someone else. Crap that usually causes thousands of deaths. ... Even
in the KGB days the CIA was the king of causing chaos. ..... the KGB would kill a dissident or
spy or two and the CIA in the same time frame would start a couple of wars killing thousands or
millions.
You said a mouth full, cherry picker. ..... Until the US Intel community goes 'bye bye' the
world will HATE the US. ... People aren't stupid. They know who is behind the evil shit.
... ... ..
G-R-U-N-T Dec 10, 2016 9:39 AM
What makes people think the Post is believable? The truth has been hijacked by their self
annihilating ideology. Honestly one would have to be dumb as a fence 'Post' (pun intended) to
believe ANYTHING coming from this rag and the rest of these 'Fake News' MSM propaganda machines,
good lord!
Colborne Dec 10, 2016 9:37 AM
As for the CIA, it was reported at the time to be largely purged under the Dubya administration,
of consitutionalists and other dissidents to the 9-11 -->> total-war program. Stacked to the brim
with with neocon cadres. So, that's the lay of the terrain there now, that's who's running
the place. And they aren't going without a fight apparently.
Interesting times , more and more so.
66Mustanggirl Dec 10, 2016 9:40 AM
For those of us who still have a grip on reality, here are the facts of this election:
Out of the 3,153 counties in this country, Hillary Clinton won only 480. A dismal and
pathetic 15% of this country. The worst showing EVER for a presidential candidate. Are
they really trying to blame the Russians and "fake" news for THAT?? Really??
The much vaunted 2 million vote lead in the popular vote can be attributed to exactly
4 boroughs in NYC; Bronx, Queens, Manhattan, & Brooklyn, where Hillary racked up 2 million
more votes than Trump. Should we give credit to the Russians and "fake" news for that, too?
96 MILLION Americans were either too disgusted, too lazy, or too apathetic to even
bother to go out and cast a vote for ANYONE in this election. On average 100 Million Americans
don't bother to vote.The Russians and "fake" news surely aren't responsible for THAT!
But given this is a story from WaPo, I think will just give a few days until it is thoroughly
discredited.
max2205 -> 66Mustanggirl Dec 10, 2016 11:04 AM
And she won CA by 4 million. She hates she only gets a limited amount of electoral votes..
tough shit rules are rules bitch. Suck it
HalEPeno Dec 10, 2016 9:43 AM
Looks like the CIA's latest candidate for regime change is the USA.
Clara Tardis Dec 10, 2016 9:45 AM
This is a vid from the 1950's, "How to spot a Communist" all you have to do is swap out commie
for: liberal, neocon, SJW and democrat and figure out they've about won....
This is the same CIA that let Pakistan build up the Taliban in Afganistan during the 1990s
and gave Pakistan ISI (Pakistan spy agency) hundreds of millions of USD which the ISI channeled
to the Taliban and Arab freedom fighters including a very charming chap named Usama Bin Laden.
The CIA is as worthless as HRC.
Fuck them and their failed intelligence. I hope Trump guts the CIA like a fish. They need a
reboot.
Yes We Can. But... -> venturen Dec 10, 2016 10:08 AM
Why might the Russians want Trump? If there is anything to the stuff I've been reading about
the Clintons, they are like cornered animals. Putin just may think the world is a safer, more
stable place w/o the Clintons in power.
TRM -> atthelake Dec 10, 2016 10:44 AM
If it is "on" then those doing the "collections" should be aware that a lot of people they
will be "collecting" have read Solzhenitsyn.
"And how we burned in the camps later, thinking: What would things have been like if every
Security operative, when he went out at night to make an arrest, had been uncertain whether he
would return alive and had to say good-bye to his family?"
Those doing the "collections" will have to choose and choose wisely the side they are on. How
much easier would it be for them to report back "Sorry, couldn't find them" than to face the wrath
of a well armed population?
Abaco Dec 10, 2016 9:53 AM
The clowns running the intelligence agencies for the US have ZERO credibility. Clapper
sat in front of congress and perjured himself. When confronted with his perjury he defended himself
saying he told them the "least untruthful thing" he could - admitting he had not problem whatsoever
about lying to Congress. He was not fired or reprimanded in any way. He retired with a generous
pension. He is a treasonous basrtard who should be swinging from a lamppost. These people serve
their political masters - not the people - and deserve nothing but mockery and and a noose.
mendigo Dec 10, 2016 9:56 AM
As reported on infowars:
On Dec 9 0bomber issued executive order providing exemption to Arms Export Control Act to permit
supplying weapons (ie sams etc) to rebel groups in Syria as a matter "essential to national security
"interests"".
Be careful in viewing this report as is posted from RT - perhaps best to wait for corraboaration
on front page of rededicated nyt to be sure and avoid fratrenizing with Vlad.
Separately Gabard has introduced bill : Stop Arming Terrorists Act.
David Wooten Dec 10, 2016 9:56 AM
There certainly is foreign meddling in US government policy but it is not coming from Russia.
The countries that have much greater influence than Russia on 'our' government are the Sunni-dominated
Persian Gulf oil states including the UAE, Bahrain, Qatar, Oman, Kuwait and, of course, that bastion
of human rights, Saudi Arabia.
Oil money from these states has found its way into influentual think tanks including the
Brookings Institution, the Atlantic Council, the Middle East Institute and the Georgetown Center
for Strategic and International Studies and others. All of these institutions should be registered
as foriegn agents and any cleared US citizen should have his or her clearance revoked if they
do any work for these organizations, either as a contractor or employee. And these Gulf states
have all been donating oil money to UK and US universities so lets include the foreign studies
branches of universities in the registry of foreign agents, too.
And also, there are arms sales. Arm sales to Saudi/Gulf States come with training. With
training comes military ties, foreign policy ties and even intelligence ties. Saudi Arabia, with
other Gulf oil states as partners, practically owns the CIA now. Arms companies who sell
deadly weapons to the Gulf States, in turn, donate money to Congressmen and now own politicians
such as Senators Graham and McCain. It's no wonder Graham wants to help his pals - er owners.
So what we have here ('our' government) is institutionalized influence, if not outright control,
of US foreign policy by some of the most vicious states on the planet,
especially Saudi Arabia - whose religious police have been known to beat school girls fleeing
from burning buildings because they didn't have their headscarves on.
As Hillary's 2014 emails have revealed, Qatar and Saudi Arabia support ISIS and were doing
so about the same time as ISIS was sweeping through Syria and Iraq, cutting off the heads of Christians,
non-Sunnis and just about anyone else they thought was in the way. The Saudi/Gulf States are the
driving force to get rid of Assad and that is dangerous as nuclear-armed Russia protects him.
If something isn't done about this, the Gulf oil states may get US into a nuclear war with Russia
- and won't care in the least.
Richard Whitney Dec 10, 2016 10:10 AM
So...somehow, Putin was able to affect the election one way, and the endorsements for HRC and
the slander of Trump by and from Washington Post, New York Times, Philadelphia Inquirer, practically
every big-city newspaper, practically every newspaper in Europe, every EU mandarin, B Streisand,
Keith Olberman, Comedy Central, MSNBC, CNN, Lady Gaga, Lena Dunham and a wad of other media outlets
and PR-driven-celebs couldn't affect that election the other way.
Sounds unlikely on the face of it, but hats off to Vlad. U.S. print and broadcast media, Hollywood,
Europe...you lost.
seataka Dec 10, 2016 10:11 AM
The Reverse Blockade
"Reverse Blockade: emphatically insisting upon something which is the opposite of the truth
blocks the average person's mind from perceiving the truth. In accordance with the dictates of
healthy common sense, he starts searching for meaning in the "golden mean" between truth and its
opposite, winding up with some satisfactory counterfeit. People who think like this do not realize
that this effect is precisely the intent of the person who subjects them to this method.
" page 104, Political Ponerology by Andrew M. Lobaczewski
more
just the tip -> northern vigor Dec 10, 2016 11:51 AM
that car ride for the WH to the capital is going to be fun.
Arnold -> just the tip Dec 10, 2016 12:12 PM
Your comment ticked one of my remaining Brain Cells.
I recall lots of "consensus views" that were outright lies, bullshit and/or stupidity:
"The Sun circles the Earth. The Earth is flat. Global cooling / next ice age (1970s). Global warming
(no polar ice) 1990s-00's. Weapons of mass destruction." You can keep your doctor.
The CIA, Pentagon and "intelligence" agencies need both a cleaning and culling. 50%
of the Federal govt needs to go.....now.
What is BEYOND my comprehension is how anyone would think that in Putin's mind, Trump would
be preferable to Hillary. She and her cronies are so corrupt, he would either be able to blackmail
or destroy her (through espionage and REAL leaks) any time he wanted to during her presidency.
Do TPTB think we are this fucking stupid?
madashellron Dec 10, 2016 10:31 AM
Blacklist Promoted by the Washington Post Has Apparent Ties to Ukrainian Fascism and CIA
Spying.
I love this. Trump is not eager to "drain the swamp" and to collide with the establishment,
anyway he has no viable economic plan and promised way too much. However if they want to lead
a coup for Hilary with the full backing of most republican and democrat politicians just to get
their war against Russia, something tells me that the swamp will be drained for real when the
country falls apart in chaos.
northern vigor Dec 10, 2016 10:36 AM
Fuckin' Obama interfered in the Canadian election last year by sending advisers up north to
corrupt our laws. He has a lot of nerve pointing fingers at the Russians.
I notice liberals love to point fingers at others, when they are the guilty ones. It must be
in the Alinsky handbook.
Pigeon -> northern vigor Dec 10, 2016 10:38 AM
Called "projection". Everything they accuse others of doing badly, illegally, immorally, etc.
- means that is EXACTLY what they are up to.
just the tip -> northern vigor Dec 10, 2016 11:35 AM
Trump should not only 'defund' them but should end all other 'programs' that are providing
funds to them. Drug trade, bribery, embezzelment, etc. End the CIA terror organization.
Skiprrrdog Dec 10, 2016 10:49 AM
Putin for Secretary of State... :-)
brianshell Dec 10, 2016 10:50 AM
Section 8, The congress shall have the power to...declare war...raise armies...navies...militia.
The National Security Act charged the CIA with coordinating the nation's intelligence activities
and correlating, evaluating and disseminating intelligence affecting national security.
Rogue members of the executive branch have overstepped their authority by ordering the CIA
to make war without congressional approval or oversight.
A good deal of the problems created by the United States, including repercussions such as terrorism
have been initiated by the CIA
Under "make America great", include demanding congress assume their responsibility regarding
war.
Rein in the executive and the CIA
DarthVaderMentor Dec 10, 2016 10:59 AM
This whopper of a story from the CIA makes the one fabricated about WMD's in Iraq that
fooled Bush Jr. and convinced him to almost take this country down by violating the sage advice
on war strategy from Sun-Tzu and Clausewitz and opening up a second front in Iraq almost child's
play.
At least with the WMD story they had false witnesses and some made up evidence! With this
story, there is no "HUMINT (human intelligence) sources" and no physical evidence, just some alleged
traces that could have been actually produced from the ether or if they knew ahead of time of
Trump's possible win sent someone to Russia and had them actually run the IP routes for show.
Bush was misled because the CIA management was scared of some of his budgetary saber rattles
and his chasing after some CIA management. In this case, someone is really scared of what the
people will find when the swam gets drained, if ever it gets done. This includes so-called "false
flag conservatives" like Lindsey Graham and top Democrats "Cambridge 5 Admirers" salted in over
the years into the CIA
The fact that's forgotten about this is that if the story was even slightly true, it shows
how incompetent the Democrats are in running a country, how Barak Obama was an intentional incompetent
trying to drive the country into the ground and hurting its people, how even with top technologies,
coerced corrupted vendors and trillions in funding the NSA, CIA and FBI they were outflanked by
the FSB and others and why Hillary's server was more incompetent and dangerous a decision than
we think.
Maybe Hillary and Bill had their server not to hide information from the people, but maybe
to actually promote the Russian hacking?
Why should Trump believe the CIA? What kind of record and leadership do they have that anyone
other than a fool should listen to them?
small axe Dec 10, 2016 10:55 AM
At some point Americans will need to wake up to the fact that the CIA has and does interfere
in domestic affairs, just as it has long sought to counter "subversion" overseas. The agency is
very likely completely outside the control of any administration at this point and is probably
best seen as the enforcement arm of the Deep State.
As the US loses its empire and gains Third World status, it is (sadly) fitting that the CIA
war to maintain docile populations becomes more apparent domestically.
Welcome to Zimbabwe USA.
marcusfenix Dec 10, 2016 11:10 AM
what I don't understand is why the CIA is even getting tangled up in this three ring circus
freak show.
Trump has already signaled he is going hand them nearly unlimited power by appointing Pompeo
in the first place. I would think they would be very happy to welcome the incoming administration
with open arms.
I could see it if they were really that pissed about Trumps proposed Russian re-set and
maybe they are but even that has to be in doubt because of the rate at which Trump is militarizing
his cabinet. All these stars are not exactly going to support their president going belly
up to the bar with Putin. and since Trump has no military or civilian leadership experience (which
is why I believe he has loaded up on so much brass in the first place, to compensate) I have no
doubt they will have tremendous influence on policy.
In all reality Trump is a MIC, intelligence cabal dream come true, so why would they even
consider biting the hand that feeds so well? Perhaps their is more going on here under the surface,
maybe all the various agencies and bureaucracies are not playing nice, or together for that matter.
perhaps some have grown so large and so powerful that they have their own agendas? it's not as
if our federal government has ever really been one big happy family there have been many times
when the right hand did not know what the left hand was doing. and congress is week so oversight
of this monolithic military and intelligence entities may not be as extensive as we would like
to think.
after all the CIA and the Pentagon's proxy armies are already killing each other in Syria
so one has to wonder in what other arenas are they clashing?
and is this really all just a small glimpse of some secret war within, which every once in
a while bubbles up to the surface?
CheapBastard Dec 10, 2016 11:34 AM
The neocons are desperate. Their war monger Hitlery lost by a landslide now they fabricate
all sorts of irrational BS.
However, there is no doubt the Russians stole my TV remote last week.
The Intel agencies have been politicized since the late 1970's; look up 'CIA Team B'
and the 'Committee on the Present Danger' and their BS 'minority report' used by the
original NeoCons to sway public opinion in favor of Ronald Reagan and the arms buildup of the
1980's, which led to the first sky-high deficits. It also led to a confrontational stance against
the Soviet Union which almost led to nuclear war in 1983: The 1983 War Scare Declassified
and For Real
http://nsarchive.gwu.edu/nukevault/ebb533-The-Able-Archer-War-Scare-Decl...
The honest spook analysts were forced out, then as now, in favor of NeoCons with political
agendas that were dangerously myopic to say the least. The 'Office of Special Plans'
in the Pentagon cherry-picked or outright fabricated intel in order to justify the NeoCon/Israeli
wet-dream of total control of oil and the 'Securing the (Israeli) Realm' courtesy of invading
parts of the Middle East and destabilizing the rest, with the present mess as the wholly predictable
outcome. The honest analysts told them it would happen, and now they're gone.
This kind of organizational warping caused by agency politicization is producing the piss-poor
intel leading to asinine decisions creating untold tragedy; that the WaPo is depending upon this
intel from historically-proven tainted sources is just one more example of the incestuous nature
of the relations between Traditional Media and its handlers in the intel community.
YHC-FTSE Dec 10, 2016 11:54 AM
This isn't a "Soft Coup". It's the groundwork necessary for a rock hard, go-for-broke, above
the barricade, tanks in the street coup d'etat. You do not get such a blatant accusation from
the CIA and establishment echo vendor, unless they are ready to back it up to the hilt with action.
The accusations are serious - treason and election fraud.
Trump is a curious fellow. I've thought about this quite a bit and tried to put myself
in his shoes. He has no friends in .gov, no real close "mates" he can depend on, especially in
his own party, so he had to start from scratch to put his cabinet together. His natural "Mistake"
is seeking people at his level of business acumen - his version of real, ordinary people - when
billionaires/multimillionaires are actually Type A personalities, usually predatory and addicted
to money. In his world, and in America in general, money equates to good social standing more
than any other facet of personal achievements. It is natural for an American to equate "Good"
with money. I'm a Brit and foreigners like me (I have American cousins I've visited since I was
a kid) who visit the States are often surprised by the shallow materialism that equates to culture.
So we have a bunch of dubious Alpha types addicted to money in transition to take charge of
government who know little or nothing about the principle of public service. Put them in a room
together and without projects they can focus on, they are going to turn on each other for supremacy.
I would not be surprised if Trump's own cabinet destroys him or uses leverage from their own power
bases to manipulate him.
Mike Pompeo, for example, is the most fucked up pick as CIA director I could have envisaged.
He is establishment to his core, a neocon torture advocate who will defend the worst excesses
of the intelligence arm of the MIC no matter what. One word from his mouth could have stopped
this bullshit about Russia helping Trump win the election. Nobody in the CIA was going to argue
with the new boss. Yet here we are, on the cusp of another attack on mulitple fronts. This is
how you manipulate an incumbent president to dial up his paranoia to the max and failing that,
launch a coup d'etat.
It could very well be that this was Trump & the establishment plan to con the American
public from the start of course. I kind of doubt it, since the efforts of the establishment to
destroy Trump was genuinely full retard from the outset and still continues. I think he was
his own man until paranoia and the enormity of his position got the better of him and he chose
his cabinet from the establishment swamp dwellers to best protect him from his enemies. Wrong
choices, granted, but understandable.
He would have done better to ignore the political divide to choose those who have spent
their lives challenging the Deep State. My ignorance of US politics does not supply me with a
complete picture, but Ron Paul, David Kucinich, Trey Gowdy, Tulsi Gabard and even turncoat Bernie
Sanders would have been better to drain the swamp than the neocon zionists he has installed in
power.
flaminratzazz ->YHC-FTSE Dec 10, 2016 12:03 PM
I think he was his own man until paranoia and the enormity of his position got the better of
him,,
+1 I think he was just dickin around with throwin his hat in the ring, was going to go have fun
calling everyone names with outlandish attacks and lo and behold he won.. NOW he is shitting himself
on the enormity of his GREATEST fvkup in his life.
jomama ->YHC-FTSE Dec 10, 2016 12:16 PM
Unless you can show how Trump's close ties to Wall St. (owes banks there around 350M currently
YHC-FTSE ->jomama Dec 10, 2016 12:59 PM
My post is conjecture, obviously. The basis of my musings, as stated above, is the fact that the
establishment has tried to destroy Trump from the outset using all of their assets in his own
party, the msm, Hollyweird, intelligence and politics. A full retard attack is being perpetrated
against him as I type.
There is some merit to dividing the establishment, the Deep State, into two opposing sides.
One that lost power, priestige and funds backing Hillary and one that did not, which would make
Trump an alternative establishment candidate. But there is no proof that any establishment (MIC+Banking)
entity even likes Trump, let alone supports him. As for Israel, Hillary was their candidate of
choice, but their MO is they will always infiltrate and back both sides to ensure compliance.
blindfaith ->YHC-FTSE Dec 10, 2016 12:36 PM
Do not underestimate Trump. I will grant that some of these picks are concerning. However, think
in terms of business, AND government is a business from top to bottom. It has been run as a dog
and pony show for years and look where we are. To me, I think his picks are strating to look like
a very efficient team to get the government efficient again. That alone must make D.C. shake in
thier boots.
YHC-FTSE ->blindfaith Dec 10, 2016 1:08 PM
Underestimating Trump is the last thing I would do. I'm just trying to understand his motives
in my own clumsy way. Besides, he promised to "Drain the swamp", not run the swamp more efficiently.
ducksinarow Dec 10, 2016 12:04 PM
From a non political angle, this is a divorce in the making. Then democrats have been rejected
in totallity but instead of blaming themselves for not being good enough, they are blaming a third
party which is the Russians. They are now engaging the Republican Party in a custody battle for
the "children". There are lies flying around and the older children know exactly what is going
on and sadly the younger children are confused, bewildered, angry and getting angrier by the minute.
Soon Papa(Obama) will be leaving which is symbolic of the male father figure in the African American
community. The new Papa is a white guy who is going to change the narrative, the rules of engagement
and the financial picture. The ones who were the heroes in the Obama narrative are not going to
be heroes anymore. New heroes will be formed and revered and during this process some will die
for their beliefs.
Back to reality, Trump needs to cleanse the CIA of the ones who would sell our nation to the
highest bidder. If the CIA is not on the side of America the CIA should be abolished. In a world
where mercenaries are employed all over the world, bringing together a culturally mixed agency
does not make for a very honest agency. It makes for a bunch of self involved countries trying
to influence the power of individuals. The reason Castro was never taken down is because it was
not in the interest of the CIA to do so. That is why there were some pretty hilarious non-attempts
on Castro's life over the years. It is not in the best interest of the CIA that Trump be president.
It is in the best interest of America that Trump is our President.
brane pilot Dec 10, 2016 12:22 PM
Even the idea that people would rely on foreign governments for critical information during
an election indicates the bankruptcy of the corrupt US media establishment. So now they resort
to open sedition and defamation in the absence of factual information. The mainstream media in
the USA has become a Fifth Column against America, no different than the so-called 'social science'
departments on college campuses. Trump was America's last chance and we took it and no one is
going to take it away.
"... existing official models do not sufficiently explain the Minsky period, the runup, how things got so fragile that they could collapse so badly. ..."
"... in effect Minsky provided a model and discussion of all three stages, although his model of the Keynes stage is not really all that distinctive and is really just Keynes. ..."
"... he probably did a better job of discussing the Bagehot stage than did Bagehot, and more detailed, if less formal, than Diamond and Dybvig. ..."
"... But the essentials of what go on in a panic and crash were well understood and discussed prior to 1873, with Minsky, and Kindlegerger drawing on Minsky in his 1978 Manias, Panics, and Crashes, quoting in particular a completely modern discussion from 1848 by John Stuart Mill ..."
"... Keep in mind, there are an infinite number of models that fit the data. Science requires more that a fit. It requires that the model correspond with reality in a way that it can fill in observable data before it is observed. ..."
"... Here's a theory (not a model): the true and revolutionary insights of Veblen, Keynes, and Minsky have all failed to significantly alter the trajectory of economic thought because the discipline expects "the truth" to do the impossible. ..."
Yes, we miss the late Hy Minsky, especially those of us who knew him, although I cannot claim
to be one who knew him very well. But I knew him well enough to have experienced his wry wit and
unique perspective. Quite aside from that, it would have been great to have had him around these
last few years to comment on what has gone on, with so many invoking his name, even as they have
in the end largely ended up studiously ignoring him and relegating him back into an intellectual
dustbin of history, or tried to.
So, Paul Krugman has a post entitled "The Case of the Missing Minsky," which in turn comments
on comments by Mark Thoma on comments by Gavyn Davis on discussions at a recent IMF conference on
macroeconomic policy in light of the events of recent years, with Mark link
http://economistsview.typepad.com/economistsview/2015/06/the-case-of-the-missing-minsky.htmling
to Krugman's post.
He notes that there seem to be three periods of note:
a Minsky period of increasing vulnerability of the financial system to crash before the crash,
a Bagehot period during the crash,
a Keynes period after the crash.
Krugman argues that, despite a lot of floundering by the IMF economists, we supposedly understand
the second two, with his preferred neo-ISLM approach properly explaining the final Keynes period
of insufficiently strong recovery due to insufficiently strong aggregate demand stimulus, especially
relying on fiscal policy (and while I do not fully buy his neo-ISLM approach, I think he is mostly
right about the policy bottom line on this, as would the missing Minsky, I think).
He also says that looking at 1960s Diamond-Dybvig models of bank panics sufficiently explain the
Bagehot period, and they probably do, given the application to the shadow banking system. However,
he grants that existing official models do not sufficiently explain the Minsky period, the runup,
how things got so fragile that they could collapse so badly.
Now I do not strongly disagree with most of this, but I shall make a few further points. The first
is that in effect Minsky provided a model and discussion of all three stages, although his model
of the Keynes stage is not really all that distinctive and is really just Keynes.
But he probably did a better job of discussing the Bagehot stage than did Bagehot, and more
detailed, if less formal, than Diamond and Dybvig. I suspect that Bagehot got dragged in by
the IMF people because he is so respectable and influential regarding central bank policymaking,
given his important 1873 Lombard Street, and I am certainly not going to dismiss the importance
of that work.
But the essentials of what go on in a panic and crash were well understood and discussed prior
to 1873, with Minsky, and Kindlegerger drawing on Minsky in his 1978 Manias, Panics, and Crashes,
quoting in particular a completely modern discussion from 1848 by John Stuart Mill (I am tempted
to produce the quotation here, but it is rather long; I do so on p. 59 of my 1991 From Catastrophe
to Chaos: A General Theory of Economic Discontinuities), which clearly delineates the mechanics
and patterns of the crash, using the colorful language of "panic" and "revulsion" along the way.
Others preceding Bagehot include the inimitable MacKay in 1852 in his Madness of Crowds book
and Marx in Vol. III of Capital, although admittedly that was not published until well after
Bagehot's book.
One can even find such discussions in Cantillon early in the 1700s discussing what went on in
the Mississippi and South Sea bubbles, from which he made a lot of money, and then, good old Adam
Smith in 1776 in WoN (pp. 703-704), who in regard to the South Sea bubble and the managers of the
South Sea company declared, "They had an immense capital dividend among an immense number of proprietors.
It was naturally to be expected, therefore, that folly, negligence, and profusion should prevail
in the whole management of their affairs. The knavery and extravagance of their stock-jobbing operations
are sufficiently known [as are] the negligence, profusion and malversation of the servants of the
company."
It must be admitted that this quote from Smith does not have the sort of detailed analysis of
the crash itself that one finds in Mill or Bagehot, much less Minsky or Diamond and Dybvig. But there
is another reason of interest now to note these inflammatory remarks by Smith. David Warsh in his
Economic Principals has posted in the last few days on "Just before the lights went up," also linked
to by the
inimitable
Mark Thoma. Warsh discusses recent work on Smith's role in the bailout of the Ayr Bank of Scotland,
whose crash in 1772 created macroeconomic instability and layoffs, with Smith apparently playing
a role in getting the British parliament to bail out the bank, with its main owners, Lord Buccleuch
and the Duke of Queensbury, paying Smith off with a job as Commissioner of Customs afterwards. I
had always thought that it was ironic that free trader Smith ended his career in this position, but
had not previously known how he got it. As it is, Warsh points out that the debate over bubbles and
what the role of government should be in dealing with them was a difference between Smith and his
fellow Scottish rival, Sir James Steuart, whose earlier book provided an alternative overview of
political economy, now largely forgotten by most (An Inquiry into the Principles of Political
Oeconomy, 1767).
I conclude this by noting that part of the problem for Krugman and also the IMF crowd with Minsky
is that it is indeed hard to fit his view into a nice formal model, with various folks (including
Mark Thoma) wishing it were to be done and noting that it probably involves invoking the dread behavioral
economics that does not provide nice neat models. I also suspect that some of these folks, including
Krugman, do not like some of the purveyors of formal models based on Minsky, notably Steve Keen,
who has been very noisy in his criticism of these folks, leading even such observers as Noah Smith,
who might be open to such things, to denounce Keen for his general naughtiness and to dismiss his
work while slapping his hands. But, aside from what Keen has done, I note that there are other ways
to model the missing Minsky more formally, including using agent-based models, if one really wants
to, these do not involve putting financial frictions into DSGE models, which indeed do not successfully
model the missing Minsky.
Barkley Rosser
Update: Correction from comments is that the Ayr Bank was not bailed out. It failed. However,
the two dukes who were its main owners were effectively bailed out, see comments or the original
Warsh piece for details. It remains the case that Adam Smith helped out with that and was rewarded
with the post of Commissioner of Customs in Scotland.
What, exactly, is the value added of formal (or even informal) "models" in all this? That is to
say, if a historian were to describe the events and responses outlined above, what would he leave
out that an economist would put in?
Keep in mind, there are an infinite number of models
that fit the data. Science requires more that a fit. It requires that the model correspond with
reality in a way that it can fill in observable data before it is observed.
Meanwhile, Simon Wren-Lewis dismisses the policy-maker who listens to the historian as using
mere "intelligent guess work", strongly suggesting that economists clearly do better. But if trying
to figure out whether the current moments is Minsky, Keynes or even Keen, isn't "guesswork" then
I don't know what is. Put "intelligent guess work" policy next to model guided policy in your
history above. Where's the value added from modeling? It has to be useful AND the policy maker
must have a scientific reason for knowing it will be useful IN REAL TIME.
Krugman frequently defends "textbook" modeling with a "nobody else has come up with anything
better" response. But that's a classic "when did you stop beating your wife".
What if the economy can't be modeled? Claiming to do the impossible is deluded, even if you
can correctly say: "no one has ever improved upon my method of doing the impossible."
"But we have learned so much!" People say that, but what, exactly, are they talking about?
Here's a theory (not a model): the true and revolutionary insights of Veblen, Keynes, and
Minsky have all failed to significantly alter the trajectory of economic thought because the discipline
expects "the truth" to do the impossible.
Newton faced this when his theory of universal
Gravity was criticized for failing to explain the distance of the planets from the sun. The Aristotelian
tradition said that a proper theory of the heavens would do this.
And so Keynes has his Aristotelian interpreter Hicks and Minsky has his Keen. Requiring the
revolution to succeed in doing the impossible means that the truth gets misinterpreted or ignored.
Either way, no revolution despite every generation producing a revolutionary that sees the truth.
What is the value of this theory? If true, it explains how economics can be filled with smart
people seeking the truth and yet make zero progress in more than a century.
I get the impression that mainstream economists are generally resistant to any kind of boom-and-bust
models (at least while getting a BA in econ I was never taught any). Is this the case? It's too
bad, because models like LotkaVolterra are not that hard. Just from messing around with agent-based
models it seems like anything with a lag or learning generates cycles. Is it because economists
are fixated on optimization and equilibrium? Are they worried about models that are too sensitive
to initial conditions?
Maybe they should not be, but the discussion among IMF economists, Davis, Thoma, and
Krugman has involved models, and in particular, conventional models. So, Krugman declares that
there are conventional models as noted above to cover two of the stages, the latter two, but not
the first one identified with Minsky. I think there are better models for all this, but they are
not the conventional ones.
chrismealy,
The DSGE and other conventional models are able to model booms and busts, although they generally
do not use the Lotka-Volterra models that such people as the late Richard Goodwin (and even Paul
Samuelson) have used for modeling business cycle dynamics. The big difference is that the conventional
models involve exogenous shocks to set off their busts, with cyclical reverberations that decay
then following the exogenous shock, with some of the lag mechanisms operating for that.
It is not really surprising that this sort of thing does not model Minsky or the Minsky moment,
which involve endogenous dynamics, the very success of the boom as during the Great Moderation
itself undermining the stability and even resilience of the system as essentially endogenous psychological
(and hence behavioral) factors operate to loosen requirements for lending and to use Minksy language,
lending and borrowing increasingly involves highly leveraged Ponzi schemes (and I note that some
more conventional economists have emphasized leverage cycles, notably John Geanakoplis, although
avoiding Minsky per se in doing so).
This is a good post and discussion so far. So here's my $.02:
1. Maybe the behaviorists like
Thaler have already explored this, but it seems to me that economists still need to learn learning
theory from psychologists. Most importantly, "bservational learning," { http://psychology.about.com/od/oindex/fl/What-Is-Observational-Learning.htm
), or more simply "monkey see, monkey do." We constantly learn by observing behavior in others:
our parents, our older siblings, the cool kids at school, our favorite pop icons, our professors,
our business mentors, and so on. As to which,
2. Some people are better at learning than others (duh!). Some learn right away, some more
slowly, some never at all. And further,
3. Some people are more persceptive than others, recognizing the importance of something earlier
or later. If you recognized how important the trend change was when Volcker broke the back of
inflation in the early 1980s, and simply bought 30 year treasuries and held them to maturity,
you made a killing. If you discovered that in the early 1990s, you made less. And so on.
All we need, to pick up on chrismealy's comment, are time periods and learning. Incorporate
variations in skill and persceptiveness into the population, and you can get a nice boom and bust
model. As more and more people, with various levels of skill, learn an economic behavior (flipping
houses, using leverage), they will "push the edge of the envelope" more and more -- does 2x leverage
work? Yes, then how about 4x? Yes, then how about 20x? -- until the system is overwhelmed.
4. But if you don't want to incorporate imitative learning models from psychology, how about
just using appraisals of short term vs. long term risk and reward. Suppose it is the 1980s, and
I think treasury yields are on a securlar downtrend. But this book called "Bankruptcy 1995" just
came out, based on a blue ribbon panel Reagan created to look at budget deficits. That best selling
book forecasts a "hockey stick" of exploding interest rates by the mid-1990s due to ever increasing
US debt. So let's say I am 50% sure of my belief that treasury yields will continue to decline
for another 20 years, and I can make 10% a year if I am right. But if I am wrong .....
Meanwhile, I calculate that there is an 80% chance I can make 10% a year for the next few years
by investing in this new publicly traded company named "Microsoft."
Even leaving aside behavioral finance theories about loss aversion, it's pretty clear that
most investors will plump for Microsoft over treasuries, given their relative confidence in short
term outcomes.
Historically, once interest rates went close to zero at the outset of the Great Depression,
they stayed there for 20 years, and then gradually rose for another 30. How confident are investors
that the same scenario will play out this time?
Either or both of the learning theory or the short term-long term risk reward scenario are
good explanations for why backwards induction ad absurdum isn't an accurate description of behavior.
----
BTW, a nice example of a failed "backwards induction" is the "taper tantrum" of 2013. Since
investors knew that the Fed was going to be raising interest rates sooner or later, they piled
on and raised interest rates immediately -- and made a nice intermediate term top at 3%.
I think New Deal Democrat has it here. This surely, can be covered with a simple model
of asynchronous adaptive expectations with stochastic (Taleb type - big tail) risks. I wouldn't
think you would even need a sophisticated agent based model. There must be plenty of ratchet type
models out there to chose from.
"...the true and revolutionary insights of Veblen, Keynes, and Minsky have all failed to significantly
alter the trajectory of economic thought because the discipline..." sacrifices to the God, Equilibrium.
New Deal Democrat,
WRT "monkey see, monkey do" see Andred Orlean's The Empire of Value which articulates
his mimetic theory of value.
Sorry, I am not on board with this at all. Sure, I am all for incorporating
learning and lags. No problem. This is good old adaptive expectations, which I have no problem
with.
The problem is back to what I said earlier, that Minsky's apparatus operates endogenously without
any need for exogenous shocks, although it can certainly operate within those, as his quoting
of Mill shows, although I did not provide that quote, but Mill starts his story of how bubbles
happen with some exogenous initial supply/demand shock in a market.
Why is what you guys talk about an exogenous shock model? Look at the example: Volcker does
something and then different people figure it out at different rates. But Volcker is the exogenous
shocker. If he does nothing, nothing happens.
In Minsky world, there does not need to be an exogenous shock. The system may be in a total
anf full equilibrium,, but that equilibrium will disequilibrate itself as psychological attitudes
and expectations endogenously change due to it. This is what the standard modelers have sush a
problem with and do not like. They have no problem wiht adaptive expectations models. This is
all old hat stuff for them, with only the fact that one does not know for sure what all those
lags are being the problem, and what opened the door to the victory of ratex because it said there
are no lags and thus no problem. Agents now what will be on average.
Warsh's history of the Ayr Bank has errors. The Bank of England offered it a "bailout" in 1772
but required the personal guarantees of the two Dukes which were not forthcoming. The Ayr Bank
struggled on without lender of last resort support until August 1773, when it closed for good.
(This is all in Clapham's history of the Bank of England.)
What Warsh is calling a "bailout" was not a bailout of the bank, but of its proprietors who
had unlimited liability and were facing the possibility of putting their estates on the market
(which would have affected land prices in Scotland).
As I understand Warsh's description, Parliament granted the two Dukes a charter for a limited
liability company that would sell annuities. It is entirely possible that contemporary sources
would describe such an action as "indemnifying" the promoters of the company. But what is meant
by this use of the term is only that Parliament authorized the formation of corporation. The actual
indemnity is provided in the event the corporation fails by the members of the public who are
creditors of the corporation.
In short, it is an error to claim that there was a "bailout" of the Ayr Bank.
I still don't understand what information is added by "models". Krugman has a job he has created
for himself where everything he does is with an eye toward policy.
So I'm a policy maker. Explain why I need a model. in the 1930s austerity caused recessions
and WWII ended the Depression. A little history of Japan's lost decade and some thinking about
the implications of fiat currency, and, voilia, Krugman's policy suggestions, with no models and
therefore no need to listen to economists like Mankiw or the Germans currently destroying Europe
(third times a charm).
By the by, I have thought this thru. The head of Duke's Philosophy Department agrees: Krugman's
method for using models is empty hand-waving. However he comes to his conclusions, it is not logically
possible that ISLM, or any other model, has anything to do with it.
http://thorntonhalldesign.com/philosophy/2014/7/1/credentialed-person-repeats-my-critique-of-krugman
Since Adam Smith economists have told rather enthralling stories about speculations, manias,
follies, frauds, and breakdowns. The audience likes this kind of stuff. However, when it comes
to how all this fits into economic theory things become a bit awkward. Of course, we have some
modls -- Minsky, Diamond-Dybvig, Keynes come to mind -- but we could also think of other modls
-- more agent-based or equilibrium with friction perhaps. On closer inspection, though, economists
have no clue at all.
Keynes messed up the basics of macro with this faulty syllogism: "Income = value of output
= consumption + investment. Saving = income - consumption. Therefore saving = investment." (1973,
p. 63)
From I=S all variants of IS-LM models are derived including Krugman's neo-ISLM which allegedly
explains the post-crash Keynes period. Let there be no ambiguity, all these models have always
been conceptually and formally defective (2011).
Minsky built upon Keynes but not on I=S.
"The simple equation 'profit equals investment' is the fundamental relation for a macroeconomics
that aims to determine the behavior through time of a capitalist economy with a sophisticated,
complex financial structure." (Minsky, 2008, p. 161)
Here profit comes in but neither Minsky, nor Keynes, nor Krugmann, nor Keen, nor the rest of
the profession can tell the fundamental difference between income and profit (2014).
The fact of the matter is that the representative economist fails to capture the essence of
the market economy. This does not matter much as long as he has models and stories about crashing
Ponzi schemes and bank panics. Yes, eventually we will miss them all -- these inimitable proto-scientific
storytellers.
To have any number of incoherent models is not such a good thing as most economists tend to
think. What is needed is the true theory.
"In order to tell the politicians and practitioners something about causes and best means,
the economist needs the true theory or else he has not much more to offer than educated common
sense or his personal opinion." (Stigum, 1991, p. 30)
The true theory of financial crises presupposes the correct profit theory which is missing
since Adam Smith. After this disqualifying performance nobody should expect that some Walrasian
or Keynesian bearer of hope will come up with the correct modl any time soon.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2011). Why Post Keynesianism is Not Yet a Science. SSRN Working Paper
Series, 1966438: 120. URL http://ssrn.com/abstract=1966438.
Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected
Writings of John Maynard Keynes Vol. VII. London, Basingstoke: Macmillan.
Minsky, H. P. (2008). Stabilizing an Unstable Economy. New York, NY, Chicago, IL, San Francisco,
CA: McGraw Hill, 2nd edition.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics
and Econometrics. Cambridge, MA: MIT Press.
In addition to my hypo re Volcker and interest rates, I also mention flipping
houses and leverage.
Person A flips a house, makes $100k. Person B learns of it, figures s/he can do just as well,
and flips a house. Eventually enough people are doing it that news stories are written about it.
By now 1000s of people are figuring, "if they can do it, I can do it.":
So long as the trend continues, the person using financial leverage to flip houses makes even
more profit. Person B uses more leverage, and so on. And since 2x leverage worked, why not 4x
leverage. And if that works, why not 10x leverage?
Both the number of people engaging in the behavior, and the financial leveraging of the behavior,
are endogenous, unless you are going to hang your hat on existing trend (note, not necessarily
a shock - of rising house prices0.
All you need is more and more people of various skill sets at various entry points of time
engaging in the behavior, and testing increasing leverage the more the behavior works.
Secondly, as to stability breeding instability, stability itself is the existing trend. Increasingly
over time, more and more leverage will be used to profit off the existing trend. All it takes
is learning + risk-takers successfully testing the existing limits. The more stable the system,
the more risk-takers can apply leverage without rupturing it -- for a while.
Let me try to express my position as a series of axioms:
1. Assume that no system, no matter how stable, can withstand infinite leverage.
2. Assume that there is a certain non-zero percentage of risk-taking individuals.
3. Assume that risk-takers will use some amount of leverage to attempt to profit within a stable
system.
4. Assume that risk-takers will use increasing leverage once any given lesser percentage of leverage
succeeds in rendering a profit, in order to increase profits.
5. Assume that others will learn, over various time periods, at varying levels of skill, to imitate
the successful behavior of risk-takers.
Under those circumstances, it is certain that any system,
no matter how stable, will ultimately succumb to leverage. And the more stable, the more leverage
will have been applied to reach that breaking point. I.e., stability breeds instability.
Even using history as an analogy is implicitly introducing a model. You're saying, here's my model
of this history and I crank my little model to show the behavior of the model simulates the historical
record, then I adapt the model to present circumstances, and crank again arguing, again by analogy.
What I would object to is the reliance on "analytic models" as opposed to operational
models of the actual institutions. Economists love their analytic models, particularly axiomatic
deductive "nomological machines", DSGE being the current orthodox approach. Not that there is
anything wrong about analysis. My objection would be to basing policy advice on a study of analytic
models to the exclusion of all else -- Krugman's approach -- rather than an empirical study of
institutions in operation (which would still involve models, because that's how people think,
but they might be, for example, simulation models calibrated to observed operational mechanisms).
There are reasons why economists prefer analytic models, but few of those reasons are sound.
In the end, it is a matter of bad judgment fostered by a defective education and corruption or
weakmindedness. Among other things, reliance on analytic models give economics an esoteric quality
that privileges its elite practitioners. Ordinary people can barely understand what Krugman is
talking about in the referenced piece, and that's by design. He does his bit to protect the reputations
of folks like Bernanke and Blanchard, obscuring their viewpoints and the consequences of their
policies.
I am not sure what can be done about it. Economists like Krugman are as arrogant as they are
ignorant -- there's not enough intellectual integrity to even acknowledge fundamental errors,
and that lack of integrity keeps the "orthodoxy" going in the face of manifest failures. For the
conservatives on some payroll, the problem is even worse.
I am not confident that shooing economists from the policy room and encouraging politicians
to discuss these matters among themselves improves the situation. In doubt, people fall back on
a moral fundamentalism of the kind that gets us to "austerity" and "sacrifice" and blames the
victims -- pretty much what we have now.
Re-doing Minsky as an analytic model is an impossible task almost by definition. Minsky's approach
was fundamentally about abstracting from careful observation of what financial firms did, operationally.
It made him a hero with many financial sector denizens, who recognized themselves in his narratives,
even when he cast them in the role of bad guys. (No one is ever going to recognize himself as
a representative agent in a DSGE model.)
Perhaps the hardest thing to digest from Minsky is the insight that business cycles can not
be entirely mastered. The economy is fundamentally a set of disequilibrium phenomena, the instability
built-in (endogenous, as they say). The New Keynesian idea is that the economy is fundamentally
an equilibrium phenomenon, that occasionally needs a helping hand to recover from exogenous disturbance.
These are antagonistic world views, which cannot be reconciled with each other, and the New Keynesian
view can be reconciled only minimally with the observable facts of the world, by a lot of ad hoc
fuzzy thinking ("frictions").
Bruce, I disagree with your view of politicians. The current GOP crop are essentially following
the moral philosophy that, in the end, is the only content generated by economics. But it was
not always thus.
I once watched Senator Kit Bond of Missouri (very-R) try to round up a quorum in the Small
Business Committee. It was quite clear that the man enjoyed people. He liked the company of just
about everybody. Without the strong interference from economists, that's who ends up in politics.
People like that are pragmatic. They try things. They aren't there for the purpose (contra Ted
Cruz) of breaking things.
You're right, my problem really is with analytic "models" which aren't really models but rather
metaphors or analogies. But I don't think that's the only way reasoning from history can work.
There are lots of areas of policy, some of which continue to resist conversion to economic
religion. In education policy we try interventions and see what happens. It's inductive and mostly
correlation, but thru trial and error we do progress toward better policy (although schools of
education are only slowly moving away from their notoriously anti-scientific past).
Politicians don't have to think about the budget like a household and tighten belts. They know
that business borrow money all the time. It's actually the language of the academy that leads
to "tightening belts" instead of investing in the future. Economics is the science of claiming
that if you need something, and you can afford that something, you still must consider "multipliers"
or "the philosophers stone" or some other nonsense before you can decide to buy what you need.
What I mean to say about history: don't confuse theories with models. I have a theory about what
caused what in the Great Depression. But I don't model the economy.
I think I should clarify, I think endogenous and exogenous are a little bit besides the point
here. I think the exact trigger that starts a "state change" in the system has a stochastic component.
But the increasing vulnerability of the system is endogenous, in a very Minsky sense. What I am
saying is that increasing vulnerability could be modelled without using agent based modelling
(a bit like modelling landslides or earthquakes if you like). I'm not saying that the model is
just being driven by exogenous shocks.
Bruce,
I think there is a bit of tendency to mischaracterise what Paul Krugman is saying. He is the last
person you should be accusing of mistaking the map for the territory. He is saying that EVEN relatively
simple models can make sensible suggestions about policy in some circumstances.
Yes, though I tend to agree with you that general equilibrium is the original sin in macro-economic
modelling and that the system is in fact a disequilibrium system. But that doesn't imply to me
at all that you can't use analytical approaches.
Why Trade Deficits Matter, The Atlantic
: However one feels about
Donald Trump, it's fair to say he has usefully elevated a
long-simmering issue in American political economy: the hardship faced
by the families and communities who have lost out as jobs have shifted
overseas. For decades, many politicians from both parties ignored the
plight of these workers, offering them bromides about the benefits of
free trade and yet another trade deal, this time with some "adjustment
assistance."
One of Trump's economic goals is to lower the U.S.'s trade
deficit-which is to say, shrink the discrepancy between the value of
the country's imports and the value of its exports. Right now, the
U.S. currently imports $460 billion more than it exports, meaning it
has a trade deficit that works out to about 2.5 percent of GDP. Given
that the job market is still not back to full strength and the U.S.
has been losing manufacturing jobs-there are 60,000 fewer now than at
the beginning of this year,
according to the Bureau
of Labor Statistics
-economists would be wise to question their
assumption that such a deficit is harmless. ...
Is the U.S. trade deficit a problem whose solution would help American
workers? ...
Looks to me like "global power" comes from a lot more than
military spending, and if its jobs we want, then military
spending is a decent short run stimulus but long run waste in
terms of productive expenditure.
The
Great Illusion is a book by Norman Angell, first published in
the United Kingdom in 1909 under the title Europe's Optical
Illusion and republished in 1910 and subsequently in various
enlarged and revised editions under the title The Great
Illusion.
Angell argued that war between industrial countries was
futile because conquest did not pay. J.D.B. Miller writes:
"The 'Great Illusion' was that nations gained by armed
confrontation, militarism, war, or conquest." The economic
interdependence between industrial countries meant that war
would be economically harmful to all the countries involved.
Moreover, if a conquering power confiscated property in the
territory it seized, "the incentive to produce [of the local
population] would be sapped and the conquered area be
rendered worthless. Thus, the conquering power had to leave
property in the hands of the local population while incurring
the costs of conquest and occupation."
Angell said that arms build-up, for example the naval race
that was happening as he wrote the book in the early 1910s,
was not going to secure peace. Instead, it would lead to
increased insecurity and thus increase the likelihood of war.
Only respect for international law, a world court, in which
issues would be dealt with logically and peaceably would be
the route for peace.
A new edition of The Great Illusion was published in 1933;
it added "the theme of collective defence." Angell was
awarded the Nobel Peace Prize in 1933. He added his belief
that if France, Britain, Poland, Czechoslovakia, etc. had
bound themselves together to oppose all military aggression,
including that of Hitler's, and to appeal to world justice
for solution to countries' grievances, then the great mass of
reasonable Germans would have stepped up and stopped Hitler
from leading their country into an unwinnable war, and World
War II would have been avoided.
In 1909 a book was published
saying that free trade would make the world prosperous
forever. In the U.S. It was called "the Grand Illusion."
Unfortunately Kaiser Wilhelm appeared not to get the message.
If China didn't have those $$$$trillions, they wouldn't
feel empowered to change boundary lines by force. We wouldn't
be worried about a new arms race.
As for solutions, a trade weighted tariff that kicked in
after a certain period/percentage would work just fine,
probably similar to the wage equalization tariff I suggested
the other day. A VAT might accomplish a similar result.
But seriously, you and everyone who thinks like you can go
screw yourselves. Your myopic elitism has gotten us here. I
wish you nothing but pain.
"then military spending is a decent short run stimulus"
No
it is not. It is very ineffective and wasteful. You would get
much better return on your investment by spending on
repairing and upgrading civic infrastructure.
Bull. What we need is enforceable labor and environmental
standards and protections so that the corporate greed heads
will have less incentive to outsource their production to
places lacking any of those things. This is all about
maximizing rents by ruthlessly exploiting vulnerable labor in
the developing world and by being able to poison and
devastate their countries at will.
U.S. currently imports $460 billion more than it exports,
meaning
"
~J B & D B~~
... meaning that We the People print up
t-bonds valued at $460 then trade these bonds for Federal
Reserve Notes printed up by FG-s worth $460 then use same
notes to buy same amount of running shoes, shot glasses, etc.
We print up genuine t-bonds for their counterfeit products
that look like the real thing. Huh! The question is :
How can we do more of this without those foreigner suckers
catching on, getting wise to the scam?
For one, we can make sure that we don't print up more of
our genuine paper than their demand for it. Get it? So long
as their demand continues to be great enough to raise the
price of our tiny slips of paper, we are cool.
When we are printing too much, the price of our paper
falls, buys less, has less buying power. Less buying power is
what we call inflation. More buying power is what we call
deflation. Got it?
Print less thus keep popularity of our printed numbers up.
Tell me something!
What happens when our workers lose jobs to foreigner
suckers who dig our printed numbers?
Job loss to foreigners slows down the domestic development
of robotics, artificial intelligence, and the singularity
that will inevitably detonate all jobs globally. What will
that detonation do to our life style of excessive
overpopulation.
Don't ask, but don't
tell --
Donald A. Coffin :
, -1
The usual response to a trade deficit is that the country
running the deficit sees its currency decline in value. This
lowers the effective price of its exports and raises the
effective price of its imports. Assuming nothing peculiar
about the price elasticities of demand for exports and
import, this should lead to a shrinking trade deficit. From
1973 to 1998, the dollar appreciated steadily, and the
(nominal) trade deficit expanded only slightly. From 1998 to
2005, the dollar continued to appreciate--but the (nominal)
trade deficit exploded, increasing by a factor of (roughly)
10 by 2006. Then, as the dollar began depreciating (in 2002),
the trade deficit began to shrink. Since about 2008, the
dollar has been appreciating again.
What needs most to be
explained is the explosion of the trade deficit between 1998
and 2006; about half of the increase in the trade deficit was
between 1998 and 2002; the other half between 2002 and 2006.
"... The real danger is that the media, as well as the general public, has been sold the idea that peak oil has now been discredited because of shale oil. It has not. And that only increases the dramatic shock effect it will have when it finally becomes obvious that peak oil has arrived. ..."
"... Of course some will agree but say that "No big deal, renewables will make peak oil a non event!" And these folks are in for an even bigger shock than the peak oil deniers . Well, in my opinion anyway. ..."
"... To me, that is like a farmer saying I estimate next year and beyond that the cost of seed, chemicals, fertilizer, fuel, labor, real estate taxes, etc, will fall by 60%. I am not familiar with any commodity based business where that is reality. Yet almost ALL US LTO did the same thing, 30-60% reduction. ..."
"... The point is, had they not done that, they would have basically lost ALL of their proved reserves at 2015 prices. My point is, how can a company that is losing large amounts, pre-reserve write downs, have any economic reserves? If the costs cannot all be recovered for the well at SEC prices, there are no reserves for that well. ..."
"... 2016 SEC prices are about $10 lower. We shall see what they come up with. ..."
"... I also agree peak oil will be obvious before long, I think eventually (by 2020 at least unless a big recession intervenes) oil prices will rise, maybe to $100/b. Most will expect a big surge in output, but any surge will be small (1 Mb/d at most) and likely short lived (if it happens at all). ..."
Hi Ron. Thanks for your awesome website. The word blog doesn't do it justice.. It is truly the
best, and attracts a great group of commenters. May I ask how you might see 'serious depletion'
playing out, roughly speaking? Do you have any predictions or wild ass guesses on the slope of
the production decline or perhaps where world crude plus condensate production might be by 2020
and/or 2025? Given your wisdom and insight into human nature what are your feelings about the
human response to these future conditions?
Do you have any predictions or wild ass guesses on the slope of the production decline or perhaps
where world crude plus condensate production might be by 2020 and/or 2025?
Not really. We all had a pretty good idea where things were heading until shale oil raised
its ugly head. No one that I know of predicted that. But now it looks like shale oil is a USA
phenomenon with no appreciable production anywhere else in the world.
My strong feeling right now is that the shale oil phenomenon has given the entire world the
idea that peak oil is, or was, an illusion or an idea that had no valid support in the real world.
But peak oil is as real as it ever was. The amount of recoverable oil in the ground is finite.
We may have had the numbers wrong in our personifications because of shale oil. But that does
not change the big picture. The peak oil phenomenon is as real as it ever was.
The real danger is that the media, as well as the general public, has been sold the idea that
peak oil has now been discredited because of shale oil. It has not. And that only increases the
dramatic shock effect it will have when it finally becomes obvious that peak oil has arrived.
Of course some will agree but say that "No big deal, renewables will make peak oil a non event!" And these folks are in for an even bigger shock than the peak oil deniers . Well, in my opinion
anyway.
2016 10K will be out in late February-early March for US LTO producers.
It will be interesting to compare 2014, 2015 and 2016. In particular I am waiting to see the
estimates of future cash flows to see how much more the engineering firms let them slash future
estimated production costs and estimated future development costs.
In my opinion, there was a lot of hocus pocus in those particular numbers, which, of course
provide the basis for proved reserves and PV10.
The amounts slashed from 2014 to 2015 were incredible, for example Mr. Hamm's CLR dropped its
estimate of future production costs by 60%.
To me, that is like a farmer saying I estimate next year and beyond that the cost of seed,
chemicals, fertilizer, fuel, labor, real estate taxes, etc, will fall by 60%. I am not familiar
with any commodity based business where that is reality. Yet almost ALL US LTO did the same thing,
30-60% reduction.
The point is, had they not done that, they would have basically lost ALL of their proved reserves
at 2015 prices. My point is, how can a company that is losing large amounts, pre-reserve write
downs, have any economic reserves? If the costs cannot all be recovered for the well at SEC prices,
there are no reserves for that well.
2016 SEC prices are about $10 lower. We shall see what they come up with.
"And these folks are in for an even bigger shock than the peak oil deniers . Well, in my opinion
anyway."
I think the odds are pretty good that Ron is right. We can hope that Dennis C and the others
who think production will stay on a plateau for a while and then gradually decline rather slowly
are right.
If they are, and the electric car industry does as well as hoped, then the economy national
and world wide can probably adapt fast enough to avoid catastrophic economic depression brought
on specifically by scarce and expensive oil.
If for some reason, any reason, oil production declines sharply and suddenly, for a long period
or permanently, we are going to be in a world of hurt.
People need not starve, at least in richer and economically advanced countries, but millions
of people could lose their jobs and a lot of businesses dependent on cheap travel would fail.
The effects of these lost jobs would expand outward thru the economy doing Sky Daddy alone knows
how much damage.
In poor countries, starvation is a real possibility.
The time frame I have in mind in making this comment is out to twenty or thirty years. After
that, it's anybody's guess what the population will be, and what the economy will be like.Hell,
it's anybody's guess as far as next week is concerned, so far as that goes.
Plateau until 2019 or 2020 then some decline slow at first and gradually accelerating. Unless
a recession hits in that case acceleration is more rapid.
I also agree peak oil will be obvious before long, I think eventually (by 2020 at least unless
a big recession intervenes) oil prices will rise, maybe to $100/b. Most will expect a big surge
in output, but any surge will be small (1 Mb/d at most) and likely short lived (if it happens
at all).
Whether oil prices spike and this leads to either Great Depression(GD) 2 or a lot of EV and
plugin sales is unknown, it might be the latter at first with GD2 following between 2025 and 2030.
It will depend on how quickly oil output falls, I think it might be 1% or less until 2030 if oil
prices are high with faster decline rates once the depression hits.
As usual big WAGs by me. Of course nobody knows, but your insights on how things might play
out would be interesting.
Hi Dennis,
If I am not mistaken, you have moved up your estimate of global petroleum peak, and perhaps the
pace of the decline.
Just months ago, your opinion was that it would not occur until 2025. Are you moved by any specifics
that you would like to share?
Thank you, and as a follower of your good work, I appreciate your insight.
Steve at SRS Rocco report has a new, very informative post up showing that Middle East oil exports
are lower today than 40 years ago!
"According to the 2016 BP Statistical Review, the Middle East produced 30.10 mbd of oil in
2015 compared to 22.35 mbd in 1976. This was a growth of 7.75 mbd. However, Middle East domestic
oil consumption increased from 1.51 mbd in 1976 to 9.57 mbd in 2015. Thus, the Middle Eastern
economies devoured an additional 8.06 mbd of oil during that 40 year time-period."
Would be great to see an update on the global export land model that Jeff Brown (westexas)
used to update us on. How much C+C is available on the global markets as of today after domestic
consumption?
I΄m not Jeff B. but if I remember last version of BP stats. correctly, the net export market has
been on a bumpy plateau between 2005-2015. It has varied between 41-44 Mb/day (approx.). 2015
set a record which was just slightly higher than 2005. It΄s possible that 2016 will be slightly
higher.
World exports have been bumpy flat for 10 years or so.
Ecuador might be an importer soon'ish.
I like this site as I take an interest in observing the changes as exporters become importers.
The country charts provide some rough idea of those timings.
2015 was indeed a net export record. The increase came mainly from Canada, Iraq and Russia. Iran
may boost net exports in 2016, Kazakhstan will also add some. At least to me it seems unlikely
that net-exports will grow substantially above the 2015/16-level. Increase from the mentioned
countries will be needed to compensate decline in Mexico, Colombia, etc (+problems in Venezuela).
Seems more likely it will continue on the plateau or decline. Nigeria and Libya are wildcards.
mazamascience also use BP-data but seems to give a much higher number, ~48Mb/day. Don't know
why.
How do you calculate world total net export numbers if total global exports = total global imports?
Meanwhile, BP statistics for world oil exports (not net exports) show a rising trend.
I expect further increase in 2016, due to rising exports from Saudi Arabia, Iran, Iraq and Russia.
The IEA Oil Market Report, November 2016 on Iran's oil production and exports:
"With gains of 810 kb/d so far this year, Iran has emerged as the world's fastest source of
supply growth. Crude oil output rose by 40 kb/d in October to reach a pre-sanctions rate of 3.72
mb/d and shipments of crude oil climbed well above 2.4 mb/d, a rate not seen in at least seven
years.
For six straight months, the National Iranian Oil Co (NIOC) has been exporting more than 2 mb/d
of crude double the volume seen under sanctions."
But that's not what your chart says, in controvention to BP's data.
Your chart says KSA exports at 9. Production is known or thought to be 10.5. And since consumption
is all liquids, that chart's products level is the correct number.
I have spent the better
part of the last 10 years working diligently to investigate and relate information on
economics and geopolitical discourse for the liberty movement. However, long before I
delved into these subjects my primary interests of study were the human mind and the
human "soul" (yes, I'm using a spiritual term).
My fascination with economics and sociopolitical events has always been rooted in the
human element.
That is to say, while economics is often treated as a
mathematical and statistical field, it is also driven by psychology.
To know
the behavior of man is to know the future of all his endeavors, good or evil.
Evil is what we are specifically here to discuss.
I have touched on
the issue in various articles in the past including
Are Globalists Evil Or Just Misunderstood
, but with extreme tensions taking shape
this year in light of the U.S. election as well as the exploding online community
investigation of "Pizzagate," I am compelled to examine it once again.
I will not be grappling with this issue from a particularly religious perspective.
Evil applies to everyone regardless of their belief system, or even their lack of
belief. Evil is secular in its influence.
The first and most important thing to understand is this - evil is NOT simply
a social or religious construct, it is an inherent element of the human psyche.
Carl Gustav Jung was one of the few psychologists in history to dare write extensively
on the issue of evil from a scientific perspective as well as a metaphysical
perspective. I highly recommend a book of his collected works on this subject titled
'Jung On Evil', edited by Murray Stein, for those who are interested in a deeper view.
To summarize, Jung found that much of the foundations of human behavior are rooted in
inborn psychological contents or "archetypes." Contrary to the position of Sigmund
Freud, Jung argued that while our environment may affect our behavior to a certain
extent, it does not make us who we are. Rather, we are born with our own individual
personality and grow into our inherent characteristics over time. Jung also found that
there are universally present elements of human psychology. That is to say, almost every
human being on the planet shares certain truths and certain natural predilections.
The concepts of good and evil, moral and immoral, are present in us from birth and
are mostly the same regardless of where we are born, what time in history we are born
and to what culture we are born. Good and evil are shared subjective experiences. It is
this observable psychological fact (among others) that leads me to believe in the idea
of a creative design - a god. Again, though, elaborating on god is beyond the scope of
this article.
To me, this should be rather comforting to people, even atheists. For if there is
observable evidence of creative design, then it would follow that there may every well
be a reason for all the trials and horrors that we experience as a species. Our lives,
our failures and our accomplishments are not random and meaningless. We are striving
toward something, whether we recognize it or not. It may be beyond our comprehension at
this time, but it is there.
Evil does not exist in a vacuum; with evil there is always good, if one looks
for it in the right places.
Most people are readily equipped to recognize evil when they see it
directly. What they are not equipped for and must learn from environment is how to
recognize evil disguised as righteousness.
The most heinous acts in
history are almost always presented as a moral obligation - a path towards some "greater
good." Inherent conscience, though, IS the greater good, and any ideology that steps
away from the boundaries of conscience will inevitably lead to disaster.
The concept of globalism is one of these ideologies that crosses the line of
conscience and pontificates to us about a "superior method" of living.
It
relies on taboo, rather than moral compass, and there is a big difference between the
two.
When we pursue a "greater good" as individuals or as a society, the means are just as
vital as the ends. The ends NEVER
justify the means. Never. For if we
abandon our core principles and commit atrocities in the name of "peace," safety or
survival, then we have forsaken the very things which make us worthy of peace and safety
and survival. A monster that devours in the name of peace is still a monster.
Globalism tells us that the collective is more important than the individual,
that the individual owes society a debt and that fealty to society in every respect is
the payment for that debt.
But inherent archetypes and conscience tell us
differently. They tell us that society is only ever as healthy as the individuals
within it, that society is only as free and vibrant as the participants. As the
individual is demeaned and enslaved, the collective crumbles into mediocrity.
Globalism also tells us that humanity's greatest potential cannot be reached without
collectivism and centralization. The assertion is that the more single-minded a society
is in its pursuits the more likely it is to effectively achieve its goals. To this end,
globalism seeks to erase all sovereignty. For now its proponents claim they only wish to
remove nations and borders from the social equation, but such collectivism never stops
there. Eventually, they will tell us that individualism represents another nefarious
"border" that prevents the group from becoming fully realized.
At the heart of collectivism is the idea that human beings are "blank
slates;" that we are born empty and are completely dependent on our environment in order
to learn what is right and wrong and how to be good people or good citizens. The
environment becomes the arbiter of decency, rather than conscience, and whoever controls
the environment, by extension, becomes god.
If the masses are convinced of this narrative then moral relativity is only a short
step away. It is the abandonment of inborn conscience that ultimately results in evil.
In my view, this is exactly why the so called "elites" are pressing for globalism in the
first place. Their end game is not just centralization of all power into a one world
edifice, but the suppression and eradication of conscience, and thus, all that is good.
To see where this leads we must look at the behaviors of the elites
themselves, which brings us to "Pizzagate."
The exposure by Wikileaks during the election cycle of what appear to be coded emails
sent between John Podesta and friends has created a burning undercurrent in the
alternative media. The emails consistently use odd and out of context "pizza"
references, and independent investigations have discovered a wide array connections
between political elites like Hillary Clinton and John Podesta to James Alefantis, the
owner of a pizza parlor in Washington D.C. called Comet Ping Pong. Alefantis, for
reasons that make little sense to me, is listed as number 49 on GQ's
Most Powerful People In Washington list
.
The assertion according to circumstantial evidence including the disturbing child and
cannibalism artwork collections of the Podestas has been that Comet Ping Pong is somehow
at the center of a child pedophilia network serving the politically connected. Both
Comet Ping Pong and a pizza establishment two doors down called Besta Pizza use symbols
in their logos and menus that are listed on the
FBI's
unclassified documentation on pedophilia symbolism
, which does not help matters.
Some of the best documentation of the Pizzagate scandal that I have seen so far has
been done by David Seaman, a former mainstream journalist gone rogue.
Here is his
YouTube page
.
I do recommend everyone at least look at the evidence he and others present. I went
into the issue rather skeptical, but was surprised by the sheer amount of weirdness and
evidence regarding Comet Pizza. There is a problem with Pizzagate that is difficult to
overcome, however; namely the fact that to my knowledge no victims have come forward.
This is not to say there has been no crime, but anyone hoping to convince the general
public of wrong-doing in this kind of scenario is going to have a very hard time without
a victim to reference.
The problem is doubly difficult now that an armed man was arrested on the premises of
Comet Ping Pong while "researching" the claims of child trafficking. Undoubtedly, the
mainstream media will declare the very investigation "dangerous conspiracy theory."
Whether this will persuade the public to ignore it, or compel them to look into it,
remains to be seen.
I fully realize the amount of confusion surrounding Pizzagate and the assertions by
some that it is a "pysop" designed to undermine the alternative media. This is a
foolish notion, in my view. The mainstream media is dying, this is unavoidable. The
alternative media is a network of sources based on the power of choice and cemented in
the concept of investigative research. The reader participates in the alternative media
by learning all available information and positions and deciding for himself what is the
most valid conclusion, if there is any conclusion to be had. The mainstream media
simply tells its readers what to think and feel based on cherry picked data.
The elites will never be able to deconstruct that kind of movement with something
like a faked "pizzagate"; rather, they would be more inclined to try to co-opt and
direct the alternative media as they do most institutions. And, if elitists are using
Pizzagate as fodder to trick the alternative media into looking ridiculous, then why
allow elitist run social media outlets like Facebook and Reddit to shut down discussion
on the issue?
The reason I am more convinced than skeptical at this stage is because this has
happened before; and in past scandals of pedophilia in Washington and other political
hotbeds, some victims DID come forward.
I would first reference the events of the Franklin Scandal between 1988 and 1991. The
Discovery Channel even produced a documentary on it complete with interviews of alleged
child victims peddled to Washington elites for the purpose of favors and blackmail.
Meant to air in 1994, the documentary was quashed before it was ever shown to the
public. The only reason it can now be found is because an original copy was released
without permission by parties unknown.
I would also reference the highly evidenced
Westminster Pedophile Ring in the U.K.
, in which the U.K. government lost or
destroyed at least 114 related files related to the investigation.
Finally, it is disconcerting to me that the criminal enterprises of former Bear
Sterns financier and convicted pedophile Jeffrey Epstein and his "Lolita Express" are
mainstream knowledge, yet the public remains largely oblivious. Bill Clinton is
shown on flight logs
to have flown on Epstein's private jet at least a 26 times; the
same jet that he used to procure child victims as young as 12 to entertain celebrities
and billionaires on his 72 acre island called "Little Saint James". The fact that
Donald Trump was also close friends with Epstein should raise some eyebrows - funny how
the mainstream media attacked Trump on every cosmetic issue under the sun but for some
reason backed away from pursuing the Epstein angle.
Where is the vast federal investigation into the people who frequented Epstein's
wretched parties? There is none, and Epstein, though convicted of molesting a 14 year
old girl and selling her into prostitution, was only slapped on the wrist with a 13
month sentence.
Accusations of pedophilia seem to follow the globalists and elitist politicians
wherever they go. This does not surprise me. They often exhibit characteristics of
narcissism and psychopathy, but their ideology of moral relativity is what would lead to
such horrible crimes.
Evil often stems from people who are empty.
When one abandons
conscience, one also in many respects abandons empathy and love. Without these elements
of our psyche there is no happiness. Without them, there is nothing left but desire and
gluttony.
Narcissists in particular are prone to use other people as forms of
entertainment and fulfillment without concern for their humanity. They can be vicious
in nature, and when taken to the level of psychopathy, they are prone to target and
abuse the most helpless of victims in order to generate a feeling of personal power.
Add in sexual addiction and aggression and narcissists become predatory in the
extreme. Nothing ever truly satisfies them. When they grow tired of the normal, they
quickly turn to the abnormal and eventually the criminal. I would say that pedophilia
is a natural progression of the elitist mindset; for children are the easiest and most
innocent victim source, not to mention the most aberrant and forbidden, and thus the
most desirable for a psychopathic deviant embracing evil impulses.
Beyond this is the even more disturbing prospect of cultism.
It is
not that the globalists are simply evil as individuals; if that were the case then they
would present far less of a threat. The greater terror is that they are also organized.
When one confronts the problem of evil head on, one quickly realizes that evil is within
us all. There will always be an internal battle in every individual. Organized evil,
though, is in fact the ultimate danger, and it is organized evil that must be
eradicated.
For organized evil to be defeated, there must be organized good.
I believe the liberty movement in particular is that good; existing in early stages,
not yet complete, but good none the less. Our championing of the non-aggression
principle and individual liberty is conducive to respect for privacy, property and
life. Conscience is a core tenet of the liberty ideal, and the exact counter to
organized elitism based on moral relativity.
Recognize and take solace that though we live in dark times, and evil men
roam free, we are also here. We are the proper response to evil, and we have been placed
here at this time for a reason. Call it fate, call it destiny, call it coincidence, call
it god, call it whatever you want, but the answer to evil is us.
"Out of the temporary evil we are now compelled to commit will emerge the
good of an unshakable rule, which will restore the regular course of the
machinery of the national life, brought to naught by liberalism. The result
justifies the means. Let us, however, in our plans, direct our attention not
so much to what is good and moral as to what is necessary and useful."
I should also point out those alledgedly behind The Protocols
are not the people the article is referring ie: those people are
typically found in any liberal establishment.
A good article, but it fails to deliver on these key aspects of
the matter:
Everyone knows from the Godfather and its genre
that there is a connection between loyalty, criminality and
power: Once you witness someone engaging in a criminal act, you
have leverage over them and that ensures their loyalty. But what
follows from that - which healthy sane minds have trouble
contemplating - is that the greater the criminality the greater
the leverage, and that because murderous paedophilia places a
person utterly beyond any prospect of redemption in decent
society, there in NO GREATER LOYALTY than those desperate to
avoid being outed. These must be the three corners of the
triangle - Power:Loyalty:Depravity through which the evil eys
views the world.
I always beleived in an Illuminati of sorts, however they
care to self identify. Until Pizzagate, I never understood that
murderous paedophilia, luciferian in style to accentuate their
own depravity, is THE KEY TO RULING THE EARTH
And another thing. If pizzagate is 'fake news' then it it
inconceivably elaborate - they'd have had to fake Epstein 2008,
Silsby 2010, Breitbart 2011, the 2013 portugese release of
podestaesque mccann suspects, as well as the current run of
wikileaks and Alefantis' instagram account - which had an avatar
photo of the 13 yr old lover of a roman emperor.
Is that much fake news a possibility? Or has this smoke been
blowing for years and we've all been too distracted to stop and
look for fire?
What floors me about the whole pizzagate thing is the evil staring us
right in the face. And then to realize that the libtards don't even
believe in evil at all, only "mental illness"!
Lesson #1: Do not waste your time figuring some things out. Things like evil
people are probably beyond a decent persons ability to understand and let's be
honest I don't want to feel any sympathy for them anyway.
Read a book years ago by Dr. Karl Menninger, a psychiatrist, titled
'Whatever happened to Sin?'
In it he talks of murder and that it is not a natural thing for man to
do,. However, when the burden of guilt is spread over many shoulders and
government condones the action, it becomes easier to bear.
When observing the results, such as soldiers returning from war, unstable
mentally, it is evident that evil has occured. It has been decades since I
read the book, so the words I wrote may not be verbatim.
Lurked ZH for years, just started reading the comments. This is worse than
Reddit's echo chamber. Bible quotes? 3 guys 1 hammer on liveleak has more
productive comments. Why not mention methods you've used to help people reach
their own conclusion about Pizzagate?
I had two slices of pizza for dinner. I had to try not to think of the poor
children walking innocently about the store who may at any moment fall victim
to a pedo. My gf said pizza places all over now need to keep a keen eye out for
the Posdesta Brothers and their Gang after all the stuff that has come out from
WikiLeaks and other sources about them.
The bible says God created evil and loosed it on us. The correct reading of
Genesis 4;1 is from the dead sea scrolls stating :
"And Adam knew his
wife Eve,
who was pregnant by Sammael [Satan]
, and she conceived and
bare Cain,
and he was like the heavenly beings, and not like earthly
beings,
and
she
said, I have gotten a man from
the angel of
the Lord."
So in Isaiah 45:7 we have this:
I form the light, and create darkness: I make peace, and create evil: I the
LORD do all these
things
.
So my research shows evil was "grafted" into humans through
the unholy alliance and 2 seedline of people resulted.
Good article but an exception: evil doesn't reside in all of us, sin does.
Evil is the expression of wanton and intentional deception, injury,
degradation, and destruction and rarely self-recognizes or admits to God as
supreme. It may be DNA encoded. Sociopathy certainly is.
But you're so
right about the organized nature of it all, and for thousands of years. The
newly formed EU didn't advertise itself as the New Babylonia for nothing on
publicty posters, heralding the coming age of one tongue out of many and
fashioning its parliament building after the Tower of Bablyon:
Secret societies are cannibalizing us, and themselves, but members won't
know till it's too late that they'll also be eaten fairly early on. Of all
"people", they should know those in the pyramid capstone won't have enough
elbow room if they let in every Tom, Dick and Harry Mason.
I am sympatico with Brandon. I have always had similar interests, about the
soul, about ethics, about human behavior.
The reality is that evil is extant
in other human beings. The thought that your property manager is going to piss
in your OJ or fuck their BFF in your bed is abhorrent to most people, but not
all. There was an article this week about a married couple that had concerns
about their rental unit manager. And what did they find? He was fucking his BFF
(yes, of course it was another dude) in their bed. The good news is they got it
on video and moved. The bad news? This kind of attitude is rampant. People
don't give a shit about other people. They think the rules don't apply to them.
That they are special. The result is renting from some asshat that fucks in
your bed or pisses in your OJ. Or parents that wonder why little Johnny or
little Janie never move out of the house and are stoned and play video games
all day.
Evil exists, in varying forms. Sadly too many people continue to make
excuses for not only bad behavior but evil behavior. I don't think that way and
I don't live my life that way but I am fully aware of all the morons stumbling
through the world that do.
I think people are misunderstanding the setup theory. Nobody believes, at
least I hope not, that all of this art and bizarre behavior on the part of
these freaks was staged for the purposes of taking down the last of our free
media, but rather, they just took advantage of a situation where they knew
people were making accusations that couldn't be sufficiently backed up or even
prosecuted, and yet caused proven or contrived damages to people. If this is
the case, their intention,
with the help of intelligence agencies
, is
to frame alt-media for starting vigilante violence and the destruction of
innocent people's lives through promoting defamation against others.
I have
no doubt that our entire system is riddled with pedophilia and likely much
worse. They have also been getting away with this forever, so when we go for
the takedown we better have our ducks in a row. To do otherwise will just give
these sickos complete immunity and more decades will pass with them continuing
to prey on our children. Not only is this at stake but the fate of all the
children of this nation is at stake if we lose our media. We are in very
dangerous and treacherous times. When you go toe to toe with the professional
trade crafters you have to play smart or they will have you every time.
Once people have had enough exposure to NPDs or psychopaths you will vibe
them after a while. I imagine this is likely the case for anyone who has
worked as a trader, finance, politics, big commodity booms are bad, etc. We
have all encountered them somewhere. People should pay attention to how they
feel (yeah I know, people hate that word) when they are around people. I have
to pretend that I don't notice them because it is so apparent to me and
immediately.
The last time I picked one out at work, a few months later the creepy
bastard walked past me at night during a -20 blizzard, with next to no
visibility, knowing that I had an hour drive, and told me in super spooky
whisper.. "Don't hit a deer on your way home now." I found out later that a
bunch of horses had mysteriously died in his care and a bunch of other things
that confirmed my suspicions. I had a long battle with him so I eventually got
to understand him pretty well. I didn't have to hear the guy state a single
sentence or watch any body language, I just knew immediately because I could
feel his malevolence and threat in my stomach where we have a large nerve
cluster. Pay attention and you will know. Also their eye contact is all wrong
and too intense.
Globalism, is designed to make you poorer slowly over decades by allowing wages
and conditions to be for ever slowly reduced under the guise of free market
competition to funnel wealth ever upwards to the 1%.
""The trouble is not so much that macroeconomists say things that are inconsistent with the facts."
-- that's a clear sign of a cult.
Notable quotes:
"... "The trouble is not so much that macroeconomists say things that are inconsistent with the facts. The real trouble is that other economists do not care that the macroeconomists do not care about the facts. An indifferent tolerance of obvious error is even more corrosive to science than committed advocacy of error." ..."
"... The obvious explanation is ideological. While Simon Wren Lewis cannot prove it was ideological, it is difficult to understand why one would choose to develop theories that ignore some of the existing evidence, in an area that lacks data. There is a reluctance among the majority of economists to admit that some among them may not be following the scientific method but may instead be making choices on ideological grounds. This is the essence of Romer's critique. ..."
"... ...it is all but indistinguishable from Milton Friedman's ideologically-driven description of the macroeconomy. In particular, Milton Friedman's prohibition of fiscal policy is retained with a caveat about the zero-lower bound in recent years. To argue otherwise is to deny Keynes' dictum that 'the ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood.' ..."
"... What I find most egregous in Neo-classicism, is it's failure to accept that people invented government to perform tasks they individually could not. ..."
"... Economics is a foul and pestilent ghetto, an intellectual dead-end akin to Ptolemaic astronomy. The priests will continue adding epicycles to epicycles until they are dragged screaming to the asylum. ..."
"... There is always some revered academic economist readily available to support virtually any political narrative imaginable, even if it's total rubbish. It is truly a "science" for all seasons fostered by reverend figures with authority earned by many years diligent practice in translating gibberish into runes of mathematical formulae. That's more dainty than poking about in sheep guts with a sharp stick, but of little more use in the real world which lies outside the ivied towers. ..."
"... Diligence blesses them with tenure followed by offers to serve private or public patrons perpetually engaged in rent-seeking. These made men (and women) are essentially set for life, regardless of whatever nonsense they may forever promote thereafter. A few are blessed by the good luck of a Nobel which guarantees a prosperous sinecure and unlimited opportunity to promote their own vacuous political narratives masqueraded as "science". ..."
"... This cult enjoys perpetual protection within public and private safe spaces created by their well-heeled paymasters. It is one of a number of deeply attached parasites which cannot be safely excised from the corrupt body of the host without killing it. ..."
"... I should add that neoclassical economics has damaged economics by excluding explicitly the government sector in their models. As a result, the impact of government on the macroeconomy has not been properly understood ..."
"... Do the economists he names really not understand the computer stat model they are using? Are they admitting to making up the fudge factors to make their 'data' fit their (wrong headed) totem pole, supply and demand? I mean, there it is in black and white, by the economists' own words, that their math is just flat out wrong. ..."
"... The economics I learned in the early 1960's seems to work as well now as it did back then. I was lucky enough to be so busy at work in the decades that followed, that I did not have a chance to keep up on the mis-education of the time. When I had the time to start paying more attention to the subject again, I couldn't understand what had happened to the knowledge that I had learned that seemed to explain all that was happening in the economy. ..."
"... The Neolib-Globalist Ministry Of Truth erased it. You must not have got the memo. ..."
"... It's 2016 and some Dismal Scientists are still debating whether "involuntary unemployment" exists. ..."
"... If anything, Philip Mirowski has persuasively argued that neoliberalism requires a powerful State. ..."
"... He has shown that the neoliberal thought collective theorized an elaborate political mobilization, and recognized early on that the creation of a new market is a political process requiring the intervention of organized power. The political will to impose a market required a strong state and elaborate regulation and also that the State would need to expand its economic and political power over time. ..."
"... The neoliberal market had to be imposed it did not just happen. A key issue for the future is defining the nature of the statewhether under neoliberalism or MMT or under Trump or Sanders, or left populist or right populist. ..."
"... Mankiw belongs in the non-ideological camp? I don't see how anybody with a brain could read any of his work past the first page and still hold that view. ..."
"... agreed, Mankiw is an intellectual clown and he has been mis-educating students for decades now. ..."
Romer
kicked off the debate in an essay, stating that for more than three decades, macroeconomics has
gone backwards. He finds that the treatment of identification now is no more credible than in the
early 1970s, but escapes challenge because it is so much more opaque. Macroeconomic theorists dismiss
mere facts by feigning an obtuse ignorance about such simple assertions as "tight monetary policy
can cause a recession." For Romer, the Nobel Prize-winning crop of macroeconomic theorists who transformed
the field in the late 1970s and 1980s - Robert Lucas, Edward Prescott and Thomas Sargent
are the main people to be held responsible for this this development. Their models attribute fluctuations
in aggregate variables to imaginary causal forces that are not influenced by actions that any
person takes. Especially when it comes to monetary policy, the belief that it has no or little effect
on the economy is disturbing, or as Romer puts it:
"The trouble is not so much that macroeconomists say things that are inconsistent with the
facts. The real trouble is that other economists do not care that the macroeconomists do not care
about the facts. An indifferent tolerance of obvious error is even more corrosive to science than
committed advocacy of error."
... ... ...
Simon Wren-Lewis identifies yet another factor which lies at the heart of macroeconomic criticism:
ideology. As an example he quotes Real Business Cycle (RBC) research from a few decades ago. That
was only made possible because economists chose to ignore evidence about the nature of unemployment
in recessions. There is overwhelming evidence that employment declines in a recession because workers
are fired rather than choosing not to work, and that the resulting increase in unemployment is involuntary
(those fired would have rather retained their job at their previous wage). Both facts are incompatible
with the RBC model. Why would researchers try to build models of business cycles where these cycles
require no policy intervention, and ignore key evidence in doing so? The obvious explanation
is ideological. While Simon Wren Lewis cannot prove it was ideological, it is difficult to understand
why one would choose to develop theories that ignore some of the existing evidence, in an area that
lacks data. There is a reluctance among the majority of economists to admit that some among them
may not be following the scientific method but may instead be making choices on ideological grounds.
This is the essence of Romer's critique.
...it is all but indistinguishable from Milton Friedman's ideologically-driven description
of the macroeconomy. In particular, Milton Friedman's prohibition of fiscal policy is retained with
a caveat about the zero-lower bound in recent years. To argue otherwise is to deny Keynes' dictum
that 'the ideas of economists and political philosophers, both when they are right and when they
are wrong are more powerful than is commonly understood.'
PlutoniumKun, December 6, 2016 at 4:18 am
I can recall my very first lecture in Macroeconomics back in the mid 1980's when the Prof.
freely admitted that macro had very little real world validity as the models simply didn't match
the real world data. He advised us to focus on economic history if we wanted to understand how
the real world worked. That was the only useful thing I learned from three years studying the
subject.
Dr. George W. Oprisko, December 6, 2016 at 7:21 am
I cut y teeth on computer models of rainfall streamflow relationships. We always started
with constants derived from experimental or theoretical bases
Recently I was asked to critique a paper written by a colleague which reported results of a
numeric model of plankton distribution in the Arabian Sea. In this paper his original constants
based on known relationships gave results which did not agree with reality, so instead of looking
for mistakes in his fundamentals, he massaged the constants until he got agreement. When I pointed
out that he neglected the Somali Current, he was livid. That is, instead of thanking me for pointing
out a glaring deficiency in his methodology, he chose to obfuscate.
I see the same thing prevalent in macro-economics, with the sole exception of Modern Monetary
Theory. I find MMT to be the only variant which concretely explains the real economy.
What I find most egregous in Neo-classicism, is it's failure to accept that people invented
government to perform tasks they individually could not.
iNDY
Jake, December 6, 2016 at 5:24 am
..and none of the economists were held responsible, refused tenure, tried in court or had
their nobel prizes taken away. They continued serving their pay masters or their ideologies and
nothing changed. Life went on, gradually becoming shittier, full of anxiety and ultimately meaningless.
But hey atleast the great information processor is satisfying your utility!
PlutoniumKun,
December 6, 2016 at 6:23 am
One Irish macro professor did quite well after the Irish economic crash (2008) informing everyone
about the correct policy approaches on various public media. His university department had one
of his peer reviewed papers online dating from 2005 which advocated the adoption of US style sub-prime
mortgages as a 'solution' to rising housing costs. Around 2010 the paper was quietly removed from
all servers. I regret not saving a copy so it could be linked to every time he popped up in public.
look for the doi and plug that in here (site does not work in Chrome) http://gen.lib.rus.ec/scimag/index.php
or here http://sci-hub.cc/
The 1st has an author search too, but it isn't as good, but it might work.
I Have Strange Dreams, December 6, 2016 at 5:43 am
Kill it with fire!
Economics is a foul and pestilent ghetto, an intellectual dead-end akin to Ptolemaic astronomy.
The priests will continue adding epicycles to epicycles until they are dragged screaming to the
asylum.
Burn the whole subject to the ground and sow the razed economics departments with salt. Require
economists to ring a bell when approaching the uninfected and cry "unclean! unclean!"
actually belly-laughed 1st ever belly-laugh from an interweb comment Bravisimmo!
H/e, can't agree with you re: economics. As a historical and social area of study, it is valid
in my book even a necessity. Still, my eyes cross lately when I read the latest in economic
"theory" on any scale. Such a dreary and detached subject these days. Rootless and toothless.
Too bad.
Every time a bell rings, an angel gets his wings. That is a called a positive externality in
macroeconomics, and can therefore be defined in an equation. Which makes it thus so.
There is no chance of killing off this mystery cult as long as politicians rely on its ruminations
and incantations to help perpetuate them in office.
There is always some revered academic economist readily available to support virtually
any political narrative imaginable, even if it's total rubbish. It is truly a "science" for all
seasons fostered by reverend figures with authority earned by many years diligent practice in
translating gibberish into runes of mathematical formulae. That's more dainty than poking about
in sheep guts with a sharp stick, but of little more use in the real world which lies outside
the ivied towers.
Economists, like carny balloon sellers, are paid based on volume, not weight. Diligence
blesses them with tenure followed by offers to serve private or public patrons perpetually engaged
in rent-seeking. These made men (and women) are essentially set for life, regardless of whatever
nonsense they may forever promote thereafter. A few are blessed by the good luck of a Nobel which
guarantees a prosperous sinecure and unlimited opportunity to promote their own vacuous political
narratives masqueraded as "science".
This cult enjoys perpetual protection within public and private safe spaces created by
their well-heeled paymasters. It is one of a number of deeply attached parasites which cannot
be safely excised from the corrupt body of the host without killing it.
We live in a post-truth or post-fact world, where truth and fact do not matter.
But the fact is: Keynes has never gone away in the sense that governments have always been
trying to manage the economy with fiscal and monetary policies which (to me) is the essence
of Keynes and macroeconomics. Most governments run budget deficits to stimulate demand. It is
merely cognitive dissonance of academics to think neoclassical economics only is mainstream and
solely responsible for the GFC, just because to them there is an apparent bias in research funding
at universities.
First, government is such a huge portion of the economy that its actions have huge influence
and therefore the impact has to be managed. Pretending you can have some type of neutral autopilot
is a false idea, but that is the bedrock of economic thinking, that economies have a natural propensity
to equilibrium and that equilibrium is full employment.
Second, it's not done much these days, but the best forms of intervention are ones that are
naturally countercyclical so you don't have politicians wrangling and have pork and election timing
and results and inertia get in the way.
I'm not defending neoclassical economics. In economics, the alternative to a wrong is another
wrong. Governments are politically compelled to intervene. But with the Keynesian economic fallacy,
their interventions make things worse in the long-run. Please visit my blog:
"The Battle of Bretton Woods" is very instructive. Start with two intellectuals (Keynes and
Harry Dexter White) who were big fans of Stalinist Russia's command economy ("I've seen the future and
it works!"). Last time I checked this kind of tomfoolery ("we will raise X number of cows because
we think we'll need leather for Y number of shoes") has been utterly discredited. Implement for
the global currency and trade systems. Fast forward to today where there are massive imbalances,
global currency wars, and a race to zero and beyond that has sucked all demand from the future
to the present and now the past. And the shining answer, the clarion rallying cry, is "we just
need more debt, and we need some new rugs to sweep all the bad debt under".
All while "macro-economists" propagate models that completely misunderstand how money is actually
created and distributed. All I can say is "Forward Soviet!".
Indeed. Gov't is the biggest business in town in every economy, everything else, even giant
corporations, are minuscule players in comparison. This is a large source of dynamical behavior,
the swings and re-balancing as the State throw its weight around in the marketplace.
I should add that neoclassical economics has damaged economics by excluding explicitly
the government sector in their models. As a result, the impact of government on the macroeconomy
has not been properly understood. The empirical facts, without theories or equilibrium assumptions
etc., show the failure of government policy of demand stimulation:
http://www.asepp.com/fiscal-stimulus-of-consumption/
It seems to me that for something to be called "keynesian", it should also mean that the aim
of those policies was to help create robust private demand (though I doubt Keynes was as emotionally
handicapped as today's mainstream bean-counting theorists are, if only because gdp figures didn't
yet dominate macro thinking in the manner they do today, thanks to everyone having received "economics
education" in school); if not, it wolud more fairly be called Marxist, because he was the one
from whom Keynes (indirectly, as he refused to read Marx personally) pilfered his insights. What
matters is whether we've got 'socialism for the rich / incumbents / industrial complexes', or
"socialism" (well, social-democrat, liberal new-dealerism) for the "masses".
Well, I have to say this article reminds me too much of the DNC sole searching over why Hillary
didn't win. Just another room full of wantonly clueless people.
Does start out on a high note where Romer states the problem is economists don't care if they
are winging and slinging BS from their arses same as chimpanzees.
I guess the article coulda ended there. But no.
Noah Smith laments a shortage of macro data so the who knows how many gigs at FRED are found
wanting and I guess the BLS, etc aren't up to snuff either. Or maybe Noah means they are fabricating
phoney data? Then Noah doubles down on the efficacy of interest rate policy after 9 years in
the liquidity trap.
[Caution: The following is allegory we are speaking of the high priestess here.]
We then are treated to JYell and her discovery of the buggy whip. She states there is current
research being done on buggy whips, and more research is necessary. She is able to use big words
to speak of these buggy whips. Some of these words are borrowed from real science making this
more scientific. Like hysteresis and even an example for lay-off people. It's possible you may
never work again and add to the long term employment rate! Yikes. Worse yet, their definition
of "long term" is longer than 6 months. After that, 7 months or retire at 30 is all the same to
them. "Heterogeneity" is another good one. For use in polite company. Has an Evil Twin named inequality
and a macro version called crony capitalism. JYell can keep the hits coming!
I'm tired of typing someone else can take up the rest of it.
The complaint about not enough data struck me too; actually economist have vasts amounts of
data to gain insights from and test hypothesis against because economies are well recorded human
endeavours, recorded in actual painful detail thanks to the inexhaustible efforts of statemen
and statewomen to know everything about the populations they control and harvest. Probably more
data-oriented lines of research would lead to progress in macro-economy as a scholarly discipline?
@Ruben They want more data because the data that exists cannot be explained by their eloquent
mathematical theories, which are based on assumptions that are ridiculous on their face e.g.,
rational expectations and utility maximization. The hope is that additional data will fit the
theories better allowing them to remain comfortably ensconced in their fantasy world of regressions
and p values.
Which is how we get adjustments to CPI based on the premise that CPI is overstating inflation.
Now the hip thing is that productivity is undermeasured because economists don't like what the
numbers are saying, so we can expect an upwards adjustment there as well.
Read Romer's article, twice. Will need a third try to fully get it, but as someone with a modest
background in engineering and engineering mathematics, I still can't quite believe what Romer
is saying. Do the economists he names really not understand the computer stat model they are
using? Are they admitting to making up the fudge factors to make their 'data' fit their (wrong
headed) totem pole, supply and demand? I mean, there it is in black and white, by the economists'
own words, that their math is just flat out wrong.
Now Romer is writing for the inside crowd, as an long time, connected insider himself, so don't
expect an easy read. But he writes quite clearly what is the problem with economics so the main
idea, that macro economics, in rejecting an early model of macro economics (Keynesian) because
said model was based on a few openly stated fudge factors, have spent the last 40 years building
models that are 1. full with even more fudge factors, 2. these fudge factors are never openly
stated, and 3. the new models have given truly disastrous results in the real world (also known
as the US economy, amoung others). Along the way, he names names and steps on some toes. Then
he finishes up with a full charge of how the 'dismal science' is a lying religion, nothing at
all like truth seeking science.
Okay, I'll quit here before I hurt myself. Let someone else slam the keys. (haha)
The economics I learned in the early 1960's seems to work as well now as it did back then.
I was lucky enough to be so busy at work in the decades that followed, that I did not have a chance
to keep up on the mis-education of the time. When I had the time to start paying more attention
to the subject again, I couldn't understand what had happened to the knowledge that I had learned
that seemed to explain all that was happening in the economy.
I was surprised to learn that Yellen had expressed any interest in the people permanently out
of the labor market. I thought all the discussions of interest rates focused almost exclusively
on what in my mind is the unemployment pseudo-rate, which completely ignores those people.
Regardless of which rate is considered, I have never been able to comprehend the mind that
can talk about acceptable levels of unemployment. Acceptable to whom? The people who lose their
homes, and sometimes their neighborhood networks when they have to move, and may with just a little
bad luck slide into still worse conditions? The communities that see more people becoming burglars,
muggers, bank robbers, drug dealers, and prostitutes because only the illegal economy has any
place for them? I have never seen a sustained or general effort to look at the economic consequences
of those events, much less an admission of the immorality of causing so much trouble. It seems
to me that a macroeconomics that divorces itself from those possibly micro concerns will be forever
irrelevant to good policy.
Way back prior to the great Permian-Triassic Extinction, I was fortunate enough to wander around
an Economics Department where I could encounter intellectual dead-ends like Keynes, Marx, Polanyi,
Kalecki, Veblen all of whom prepared me to pump-gas at the local filling station oh wait!
Having somehow successfully survived the subsequent big-brain epoch, I settled comfortably into
making a modest annual donation to a scholarship fund for budding economists at the olde U. Then
it came to my attention that not only could one still obtain a BA in Economics, but the olde school
was also awarding two different Bachelor on Science degrees in Economics. Breathtaking! Economics,
an actual science! Like for example physics!
I am now in the reduced circumstance of donating only to my old high school in the doubtless vain
hope that the youngsters will study enough science to be able to shoot these aspiring BS cone-heads
to the moon.
It's 2016 and some Dismal Scientists are still debating whether "involuntary unemployment"
exists.
#FacePalm
Perhaps we should deploy them to that Carrier plant to investigate. So thankful for heterodox
voices:
Abba Lerner Functional Finance
Hyman Minsky Financial Instability
Wynne Godley Sectoral Balances
Entire MMT School Mosler, Wray, Kelton, Tcherneva et al
#ThereIsHope
Gee, why attack the one healthy sector of the economy, the Wealth Defence Industry?
(Why did so much of 'the social-democratic left' go along all this? I think John Rawls gave
them the excuse. He said inequality is great if the worse off are better off under this economic
system than they would be under a more equal one. The poor can therefore protest if they can show
that if we did things more equally they would be better off. The task of the economist today is
to ward this possibility off by ensuring that economic thought is utterly subservient to oligarchic
extraction. It does this by lying Trickle Down! Rising Tide Lifts all Boats! This has worn out.
So next it does There Is No Alternative! 'Those Jobs are Never Coming Back', 'Robots!' And finally,
to make really certain, it turns the whole discipline into toadying intellectual fantasy. Romer
homed in on the last.)
"Too much market and too little state invites a backlash."
If anything, Philip Mirowski has persuasively argued that neoliberalism requires a powerful
State.
He has shown that the neoliberal thought collective theorized an elaborate political mobilization,
and recognized early on that the creation of a new market is a political process requiring the
intervention of organized power. The political will to impose a market required a strong state
and elaborate regulation and also that the State would need to expand its economic and political
power over time.
The neoliberal market had to be imposed it did not just happen. A key issue for the future
is defining the nature of the statewhether under neoliberalism or MMT or under Trump or Sanders,
or left populist or right populist.
Mankiw belongs in the non-ideological camp? I don't see how anybody with a brain could
read any of his work past the first page and still hold that view.
I'm imagining them all as engineers on the deck of a half-submerged Titanic, debating about
whether the hull integrity model might perhaps not have been 100% accurate.
Ann Pettifor. give me ann pettifor always. she never puts the cart before the horse, only the
ideological neoliberals try to do that while keeping a straight face they are quintessential
con artists if there ever were.
Excellent article, except it failed to point out that there are realistic and successful modeling
techniques, in addition to historical studies. These techniques are based on the nonlinear nature
of real world economies. Just use complexity and evolutionary techniques like agent based models
and nonlinear dynamical systems. Nothing new here I still think that the limits-to-growth models
("system dynamics" = nonlinear dynamical systems) of the early 1970s represent the best mathematical
economics ever done. And the economists' agent based models are just a variation on cellular automata,
which have been used with notable success in other fields for many decades.
The problem is that economists either maintained a deliberate ignorance of such methods, or
have outright rejected them, like Nordhaus with system dynamics. In part this is because these
techniques involve a different mind set: they trade off simplistic models that are easy to understand,
but whose assumptions are demonstrably false, with complexity results that give much better real
world results but have more nuanced narratives.
Ann Pettifor is right about Brexit imo. The belief and the fact is that government is trying
a fast one on the people without being straightforward in its motives or intentions and a major
cause of the discontent and disillusionment seems to stem from the macro-economic error she highlights.
People don't want this mumbo-jumbo any more. The old professions medicine, accountancy, law
created jargons of specialist words and phrases (usually Latin) to make their speech and writings
incomprehensible to the hoi polloi. Then in recent decades all sorts of trades have adopted the
same jargon approach to mystifying their work. Enough already! Say what you mean, mean what you
say.
"Nick Bunker points out that in a recent speech, the Federal Reserve Chair Janet Yellen raised
important questions about macroeconomic research in the wake of the Great Recession."
Hint: Citing an ivory-tower twit like J-Yel as "raising important questions" is a huge bullshit
tell. While she was at it, did Janet raise any important questions as to why virtually every highly
credentialed macroeconomist on planet earth completely fail to foresee the global financial crisis
and the massive distortions, in very large part caused by the machinations of the high priests
of those "believers in the power of monetary policy", which portended its coming? But, on to the
bullshit:
"The first area of interest is the influence of aggregate demand on aggregate supply. Yellen
points to research that increasingly finds so-called hysteresis effects in the macroeconomy.
Hysteresis, a term borrowed from physics, is the idea that short-run shocks to the economy
can alter its long-term trend. One example of hysteresis is workers who lose jobs in recessions
and then are not drawn back into the labuor [sic] market but rather permanently locked out,
therefore increasing the long-term unemployment rate."
That's irreversibility, not hysteresis. The latter is a special case of the former, which the
chosen example does not illustrate. An example of hysteresis from my shower's temperature control:
I find the temp is a tad too high, and turn the control a bit toward the cold setting. But I overshoot
my target, and now it's too cold. Nudge back toward hot, but the somewhat-sticky mechanism again
overshoots and lands more or less on the starting "too hot" position. But the water is still too
cold, and I find I have to nudge even further toward hot to fix that. That's hysteresis. In the
context of the recession example, hysteresis would be e.g. if once the E/P ratio had recovered
to its pre-recession level but growth and its correlates remained weaker than expected, say due
to the "recovery jobs" being on average of poorer quality than those which were lost. Kinda like
the current 8-year-long "recovery", come to think of it! But I will admit that glossing over such
messy real-world details like "widespread worker immiseration" with hifalutin terminology-borrowed-form-actual-science
like "hysteresis:" is a great way to make oneself sound important, cloistered there in one's ivory
tower.
"Another open research question that Yellen raises is the influence of "heterogeneity" on aggregate
demand. Ignoring this heterogeneity in the housing market and its effects on economic inequality
seems like something modern macroeconomics needs to resolve."
Ah yes, "needs to resolve" - that implies lots of high-powered academic conferences and PhD
theses. And it's so wonderfully wishy-washy compared to "is something only a joke pretend-scientific
discipline would even need to consider stopping doing, because no self-respecting discipline would
have abandoned assumptions of homogeneity in roughly Year 2 of said discipline's evolutionary
history."
"Yellen raises other areas of inquiry in her speech, including better understanding how the
financial system is linked to the real economy and how the dynamics of inflation are determined.
Hey, when y'all finally "better understand" how this whole "financial system" thingy is linked
to the real economy, by all means do let us know, because it seems like such a linkage might have,
like, "important ramifications", or something. As to inflation, you mean actual inflation, or
the fake measures thereof the folks at the world's central banks make their stock in trade? You
know, for example, "in determining house price inflation we studiously ignore actual house prices
and instead use an artificial metric called Owner's Equivalent Rent, which itself studiously ignores
actual prices renters pay. Ain't it cool?"
Sorry if I sound grumpy, but this article is rather reminiscent of reading US Dem-party insiders
pretending to "soul search" in re. Election 2016. Let's see:
"Another open research question that Team HRC raises is the influence of "heterogeneity" on
voting preference. Ignoring this heterogeneity in the electoral trends and its effects on election
outcomes seems like something modern macroelectorodynamics needs to resolve."
...Well, solving the "Orange Is Not Free" dilemma may take time just as the solution to a global debt
crisis (now seven years running) may take even longer. It helps though to understand what the plan
is in order to invest accordingly.
While I and others have been critical of its destructive,
as opposed to constructive elements, it is the current global establishment's (including Trump's)
overall plan, and the establishment's emphatic "whatever it takes" monetary policies are the law
of our financial markets
.
It pays to not fight the tiger until it becomes obvious
that another plan will by necessity replace it.
That time is not now, but growing populism
and the increasing ineffectiveness of monetary policy suggest an eventual transition. But back to
the beginning which was sometime around 2009/2010:
How policymakers plan to solve a long-term global debt crisis
:
As in Japan, the Eurozone, the U.S., and the UK,
central banks bought/buy increasing
amounts of government debt (QE), then rebate all interest to their Treasuries and eventually extend
bond maturities
. Someday they might even "forgive" the debt.
Poof! It's gone.
Keep interest rates artificially low to
raise asset prices and bail out over-indebted
zombie corporations and individuals
. Extend and pretend.
Talk about "normalization" to maintain as steep a yield curve as possible to help
financial institutions with long-term liabilities
, but normalize very, very slowly using
financial repression.
Liberalize accounting rules to
make some potentially "bankrupt" insurance companies
and pension funds appear solvent
. Puerto Rico, anyone?
Downgrade or never mention the low interest rate burden on household savers.
Suggest
it is a problem that eventually will be resolved by the "market".
Begin to emphasize "fiscal" as opposed to "monetary" policy,
but never mention Keynes
or significant increases in government deficit spending.
Use the buzzwords of "infrastructure"
spending and "lower taxes".
Everyone wants those potholes fixed, don't they? Everyone
wants lower taxes too!
Promote capitalism even though government controlled, near zero percent interest rates distort
markets and ultimately corrupt capitalism as we once understood it. Reintroduce Laffer Curve logic
to significantly lower corporate taxes. Foster hope.
Discourage acknowledgement of abysmal
productivity trends which are a critical test of an economic system's effectiveness.
If you are a policymaker or politician,
plan to eventually retire from the Fed/Congress/
Executive Wing and claim it'll be up to the Millennials now.
If you are an active as
opposed to passive investment manager, fight the developing trend of low fee ETFs and index funds.
But expect to retire with a nest egg.
That's the plan dear reader, and President-elect Trump's policies fit neatly into numbers
6, 7 and 8.
There's no doubt that many aspects of Trump's agenda are good for stocks and
bad for bonds near term tax cuts, deregulation, fiscal stimulus, etc. But longer term, investors
must consider the negatives of Trump's anti-globalization ideas which may restrict trade and negatively
affect corporate profits.
In addition, the strong dollar weighs heavily on globalized corporations, especially tech stocks.
Unconstrained strategies should increase cash and cash alternatives (such as high probability equity
buy-out proposals). Bond durations and risk assets should be below benchmark targets.
On TV, "Orange Is the New Black" yet, in the markets, "
Red" (in some cases) may be the
new "Green" when applied to future investment returns. Be careful stay out of jail.
Bill of Rights Dec 6, 2016 9:50 AM
As in Japan, the Eurozone, the U.S., and the UK, central banks bought/buy increasing amounts of
government debt (QE), then rebate all interest to their Treasuries and eventually extend bond
maturities. Someday they might even "forgive" the debt. Poof! It's gone.
Load up folks its not gonna be paid back anyway...
While ordinary people fret about austerity and jobs, the eurozone's corridors of power have
been undergoing a remarkable transformation
The ascension of Mario Monti to the Italian prime ministership is remarkable for more
reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi,
Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has
suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior
adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the
political power of an investment bank that you might have thought was prohibitively
politically toxic.
This is the most remarkable thing of all: a giant leap forward for, or perhaps even the
successful culmination of, the Goldman Sachs Project.
It is not just Mr Monti. The European Central Bank, another crucial player in the sovereign
debt drama, is under ex-Goldman management, and the investment bank's alumni hold sway in the
corridors of power in almost every European nation, as they have done in the US throughout the
financial crisis. Until Wednesday, the International Monetary Fund's European division was
also run by a Goldman man, Antonio Borges, who just resigned for personal reasons.
Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname
as "the Vampire Squid", and now that its tentacles reach to the top of the eurozone, sceptical
voices are raising questions over its influence. The political decisions taken in the coming
weeks will determine if the eurozone can and will pay its debts and Goldman's interests are
intricately tied up with the answer to that question.
Simon Johnson, the former International Monetary Fund economist, in his book 13 Bankers,
argued that Goldman Sachs and the other large banks had become so close to government in the
run-up to the financial crisis that the US was effectively an oligarchy. At least European
politicians aren't "bought and paid for" by corporations, as in the US, he says. "Instead what
you have in Europe is a shared world-view among the policy elite and the bankers, a shared set
of goals and mutual reinforcement of illusions."
This is The Goldman Sachs Project. Put simply, it is to hug governments close. Every business
wants to advance its interests with the regulators that can stymie them and the politicians
who can give them a tax break, but this is no mere lobbying effort. Goldman is there to
provide advice for governments and to provide financing, to send its people into public
service and to dangle lucrative jobs in front of people coming out of government. The Project
is to create such a deep exchange of people and ideas and money that it is impossible to tell
the difference between the public interest and the Goldman Sachs interest.
Mr Monti is one of Italy's most eminent economists, and he spent most of his career in
academia and thinktankery, but it was when Mr Berlusconi appointed him to the European
Commission in 1995 that Goldman Sachs started to get interested in him. First as commissioner
for the internal market, and then especially as commissioner for competition, he has made
decisions that could make or break the takeover and merger deals that Goldman's bankers were
working on or providing the funding for. Mr Monti also later chaired the Italian Treasury's
committee on the banking and financial system, which set the country's financial policies.
With these connections, it was natural for Goldman to invite him to join its board of
international advisers. The bank's two dozen-strong international advisers act as informal
lobbyists for its interests with the politicians that regulate its work. Other advisers
include Otmar Issing who, as a board member of the German Bundesbank and then the European
Central Bank, was one of the architects of the euro.
Perhaps the most prominent ex-politician inside the bank is Peter Sutherland, Attorney General
of Ireland in the 1980s and another former EU Competition Commissioner. He is now
non-executive chairman of Goldman's UK-based broker-dealer arm, Goldman Sachs International,
and until its collapse and nationalisation he was also a non-executive director of Royal Bank
of Scotland. He has been a prominent voice within Ireland on its bailout by the EU, arguing
that the terms of emergency loans should be eased, so as not to exacerbate the country's
financial woes. The EU agreed to cut Ireland's interest rate this summer.
Picking up well-connected policymakers on their way out of government is only one half of the
Project, sending Goldman alumni into government is the other half. Like Mr Monti, Mario Draghi,
who took over as President of the ECB on 1 November, has been in and out of government and in
and out of Goldman. He was a member of the World Bank and managing director of the Italian
Treasury before spending three years as managing director of Goldman Sachs International
between 2002 and 2005 only to return to government as president of the Italian central bank.
Mr Draghi has been dogged by controversy over the accounting tricks conducted by Italy and
other nations on the eurozone periphery as they tried to squeeze into the single currency a
decade ago. By using complex derivatives, Italy and Greece were able to slim down the apparent
size of their government debt, which euro rules mandated shouldn't be above 60 per cent of the
size of the economy. And the brains behind several of those derivatives were the men and women
of Goldman Sachs.
The bank's traders created a number of financial deals that allowed Greece to raise money to
cut its budget deficit immediately, in return for repayments over time. In one deal, Goldman
channelled $1bn of funding to the Greek government in 2002 in a transaction called a
cross-currency swap. On the other side of the deal, working in the National Bank of Greece,
was Petros Christodoulou, who had begun his career at Goldman, and who has been promoted now
to head the office managing government Greek debt. Lucas Papademos, now installed as Prime
Minister in Greece's unity government, was a technocrat running the Central Bank of Greece at
the time.
Goldman says that the debt reduction achieved by the swaps was negligible in relation to euro
rules, but it expressed some regrets over the deals. Gerald Corrigan, a Goldman partner who
came to the bank after running the New York branch of the US Federal Reserve, told a UK
parliamentary hearing last year: "It is clear with hindsight that the standards of
transparency could have been and probably should have been higher."
When the issue was raised at confirmation hearings in the European Parliament for his job at
the ECB, Mr Draghi says he wasn't involved in the swaps deals either at the Treasury or at
Goldman.
It has proved impossible to hold the line on Greece, which under the latest EU proposals is
effectively going to default on its debt by asking creditors to take a "voluntary" haircut of
50 per cent on its bonds, but the current consensus in the eurozone is that the creditors of
bigger nations like Italy and Spain must be paid in full. These creditors, of course, are the
continent's big banks, and it is their health that is the primary concern of policymakers. The
combination of austerity measures imposed by the new technocratic governments in Athens and
Rome and the leaders of other eurozone countries, such as Ireland, and rescue funds from the
IMF and the largely German-backed European Financial Stability Facility, can all be traced to
this consensus.
"My former colleagues at the IMF are running around trying to justify bailouts of
1.5trn-4trn, but what does that mean?" says Simon Johnson. "It means bailing out the
creditors 100 per cent. It is another bank bailout, like in 2008: The mechanism is different,
in that this is happening at the sovereign level not the bank level, but the rationale is the
same."
So certain is the financial elite that the banks will be bailed out, that some are placing
bet-the-company wagers on just such an outcome. Jon Corzine, a former chief executive of
Goldman Sachs, returned to Wall Street last year after almost a decade in politics and took
control of a historic firm called MF Global. He placed a $6bn bet with the firm's money that
Italian government bonds will not default.
When the bet was revealed last month, clients and trading partners decided it was too risky to
do business with MF Global and the firm collapsed within days. It was one of the ten biggest
bankruptcies in US history.
The grave danger is that, if Italy stops paying its debts, creditor banks could be made
insolvent. Goldman Sachs, which has written over $2trn of insurance, including an undisclosed
amount on eurozone countries' debt, would not escape unharmed, especially if some of the $2trn
of insurance it has purchased on that insurance turns out to be with a bank that has gone
under. No bank and especially not the Vampire Squid can easily untangle its tentacles from
the tentacles of its peers. This is the rationale for the bailouts and the austerity, the
reason we are getting more Goldman, not less. The alternative is a second financial crisis, a
second economic collapse.
Shared illusions, perhaps? Who would dare test it?
News outta Italy is also good Matteo Renzi's attempt to amend the constitution to make the
government rather than the entire legislature (both houses) powerful enough to change laws has
gone down in a screaming prang. Matteo Renzi has to resign since that is what he promised, and
just for a change the populist replacement doesn't appear to be an islamophonic fascist.
This is a very weak article from a prominent paleoconservative, but it is instructive what a mess he has in his head as for the
nature of Trump phenomenon. We should probably consider the tern "New Class" that neocons invented as synonym for "neoliberals". If
so, why the author is afraid to use the term? Does he really so poorly educated not to understand the nature of this neoliberal revolution
and its implications? Looks like he never read "Quite coup"
That probably reflects the crisis of pealeoconservatism itself.
Notable quotes:
"... What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy. All have opposed large-scale free-trade agreements. ..."
"... the establishment in both parties almost uniformly favors one approach to war, trade, and immigration, while outsider candidates as dissimilar as Buchanan, Nader, Paul, and Trump, and to a lesser extent Sanders, depart from the consensus. ..."
"... The insurgents clearly do not represent a single class: they appeal to eclectic interests and groups. The foe they have all faced down, however-the bipartisan establishment-does resemble a class in its striking unity of outlook and interest. So what is this class, effectively the ruling class of the country? ..."
"... The archetypal model of class conflict, the one associated with Karl Marx, pits capitalists against workers-or, at an earlier stage, capitalists against the landed nobility. The capitalists' victory over the nobility was inevitable, and so too, Marx believed, was the coming triumph of the workers over the capitalists. ..."
"... The Soviet Union had never been a workers' state at all, they argued, but was run by a class of apparatchiks such as Marx had never imagined. ..."
"... Burnham recognized affinities between the Soviet mode of organization-in which much real power lay in the hands of the commissars who controlled industry and the bureaucratic organs of the state-and the corporatism that characterized fascist states. Even the U.S., under the New Deal and with ongoing changes to the balance between ownership and management in the private sector, seemed to be moving in the same direction. ..."
"... concept popularized by neoconservatives in the following decade: the "New Class." ..."
"... It consists of a goodly proportion of those college-educated people whose skills and vocations proliferate in a 'post-industrial society' (to use Daniel Bell's convenient term). We are talking about scientists, teachers, and educational administrators, journalists and others in the communication industries, psychologists, social workers, those lawyers and doctors who make their careers in the expanding public sector, city planners, the staffs of the larger foundations, the upper levels of the government bureaucracy, and so on. ..."
"... I have felt that this 'new class' is, so far, rather thin gruel. Intellectuals, verbalists, media types, etc. are conspicuous actors these days, certainly; they make a lot of noise, get a lot of attention, and some of them make a lot of money. But, after all, they are a harum-scarum crowd, and deflate even more quickly than they puff up. On TV they can out-talk any of the managers of ITT, GM, or IBM, or the administration-managers of the great government bureaus and agencies, but, honestly, you're not going to take that as a power test. Who hires and fires whom? ..."
"... Burnham had observed that the New Class did not have the means-either money or manpower-to wield power the way the managers or the capitalists of old did. It had to borrow power from other classes. Discovering where the New Class gets it is as easy as following the money, which leads straight to the finance sector-practically to the doorstep of Goldman Sachs. Jerry Rubin's journey from Yippie to yuppie was the paradigm of a generation. ..."
"... Yet the New Class as a whole is less like Carl Oglesby or Karl Hess than like Hillary Clinton, who arguably embodies it as perfectly as McNamara did the managerial class. ..."
"... Even the New Class's support for deregulation-to the advantage of its allies on Wall Street-was no sign of consistent commitment to free-market principles ..."
"... The individual-mandate feature of Obamacare and Romneycare is a prime example of New Class cronyism: government compels individuals to buy a supposedly private product or service. ..."
"... America's class war, like many others, is not in the end a contest between up and down. It's a fight between rival elites: in this case, between the declining managerial elite and the triumphant (for now) New Class and financial elites. ..."
"... Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan establishment, even if he goes down to defeat in November. ..."
"... The New Class, after all, lacks a popular base as well as money of its own, and just as it relies on Wall Street to underwrite its power, it depends on its competing brands of identity politics to co-opt popular support. ..."
"... Marx taught that you identify classes by their structural role in the system of production. I'm at a loss to see how either of the 'classes' you mention here relate to the system of production. ..."
"... [New] Class better describes the Never Trumpers. Mostly I have found them to be those involved in knowledge occupations (conservative think tanks, hedge fund managers, etc.) who have a pecuniary interest in maintaining the Global Economy as opposed to the Virtuous Intergenerational Economy that preceded. Many are dependent on funding sources for their livelihoods that are connected to the Globalized Economy and financial markets. ..."
"... "mobilize working-class voters against the establishment in both parties. " = workers of the world unite. ..."
"... Where the class conflict between the Working and Knowledge Classes begins is where the Knowledge Class almost unilaterally decided to shift to a global economy, at the expense of the Working Class, and to the self-benefit of the Knowledge Class. Those who designed the Global Economy like Larry Summers of Harvard did not invite private or public labor to help design the new Globalist Economy. The Working Class lost out big time in job losses and getting stuck with subprime home loans that busted their marriages and created bankruptcies and foreclosures. The Knowledge Class was mostly unscathed by this class-based economic divide. ..."
"... Trump's distinguishing ideology, which separates him from the current elite, is something he has summed up many times nationalism vs. Globalism. ..."
"... The financial industry, the new tech giants, the health insurance industry are now almost indistinguishable from the government ruling elite. The old leftrepresented by Sandersrails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right in a sense. ..."
"... The hyperconcentration of power in Washington and a few tributary locations like Wall Street and Silicon Valley, elite academia and the mediacall that the New Class if you likemeans that most of AmericaMain Street, the flyover country has been left behind. Trump instinctively brilliantly in some ways tapped into the resentment that this hyperconcentration of wealth and government power has led to. That is why it cuts across right and left. The elites want to characterize this resentment as backwards and "racist," but there is also something very American from Jefferson to Jackson to Teddy Roosevelt that revolts against being lectured to and controlled by their would-be "betters." ..."
"... The alienation of those left out is real and based on real erosion of the middle class and American dream under both parties' elites. The potentially revolutionary capabilities of a political movement that could unite right and left in restoring some equilibrium and opportunities to those left out is tremendous, but yet to be realized by either major party. The party that can harness these folks who are after all the majority of Americans will have a ruling coalition for decades. If neither party can productively harness this budding movement, we are headed for disarray, civil unrest, and potentially the dissolution of the USA. ..."
"... . And blacks who cleave to the democrats despite being sold down the tubes on issues, well, for whatever reason, they just have thinner skin and the mistaken idea that the democrats deliver thanks to Pres. Johnson. But what Pres. Johnson delivered democrats made a mockery of immediately as they stripped it of its intent and used for their own liberal ends. ..."
"... Let's see if I can help Dreher clear up some confusion in his article. James Burnham's "Managerial Class" and the "New Class" are overlapping and not exclusive. By the Managerial Class Burnham meant both the executive and managers in the private sector and the Bureaucrats and functionaries in the public sector. ..."
"... The rise of managers was a "revolution" because of the rise of modernization which meant the increasing mechanization, industrialization, formalization and rationalization (efficiency) of society. Burnham's concern about the rise of the managerial revolution was misplaced; what he should have focused on was modernization. ..."
"... The old leftrepresented by Sandersrails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America ..."
"... . Some 3 5% of the population facing no real opposition has decided that that their private lives needed public endorsement and have proceeded to upend the entire social order - the game has shifted in ways I am not sure most of the public fully grasps or desires ..."
"... There has always been and will always be class conflict, even if it falls short of a war. Simply examining recent past circumstances, the wealthy class has been whooping up on all other classes. This is not to suggest any sort of remedy, but simply to observe that income disparity over the past 30 years has substantially benefitted on sector of class and political power remains in their hands today. To think that there will never be class conflict is to side with a Marxian fantasy of egalitarianism, which will never come to pass. Winners and losers may change positions, but the underlying conflict will always remain. ..."
"... State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those. ..."
"... People don't really care for the actions of the elite but they care for the consequences of these actions. During the 1960's, per capita GDP growth was around 3.5%. Today it stands at 0,49%. If you take into account inflation, it's negative. Add to this the skewed repartition of said growth and it's intuitive that many people feel the pain; whom doesn't move forward, goes backwards. ..."
"... People couldn't care for mass immigration, nation building or the emergence of China if their personal situation was not impacted. But now, they begin to feel the results of these actions. ..."
"... I have a simple philosophy regarding American politics that shows who is made of what, and we don't have to go through all the philosophizing in this article: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American. ..."
"... Re: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American. ..."
"... The first has nothing whatsoever to do with American citizenship. It's just a political issue on which, yes, reasonable people can differ. However no American citizen should put the interests of any other country ahead of our own, except in a situation where the US was itself up to no good and deserved its comeuppance. And then the interest is not that of any particular nation, but of justice being done period. ..."
"... A lot of this "New Class" stuff is just confusing mis-mash of this and that theory. Basically, America changed when the US dollar replace gold as the medium of exchange in the world economy. Remember when we called it the PETRO-DOLLAR. As long as the Saudis only accepted the US dollar as the medium of exchange for oil, then the American government could export it's inflation and deficit spending. Budget deficits and trade deficits are intrinsically related. It allowed America to become a nation of consumers instead of a nation of producers. ..."
"... It's really a form of classic IMPERIALISM. To maintain this system, we've got the US military and we prop up the corrupt dictatorships in Saudi Arabia, Iraq, Libya ..."
"... Yeah, you can talk about the "new class", the corruption of the banking system by the idiotic "libertarian" or "free market utopianism" of the Gingrich Congress, the transformation of American corporations to international corporations, and on and on. But it's the US dollar as reserve currency that has allowed it all to happen. God help us, if it ends, we'll be crippled. ..."
"... The Clinton Class mocks The Country Class: Bill Clinton, "We all know how her opponent's done real well down in West Virginia and eastern Kentucky. Because the coal people don't like any of us anymore." "They blame the president when the sun doesn't come up in the morning now," ..."
"... That doesn't mean they actually support Hillary's policies and position. What do they really know about either? These demographics simply vote overwhelmingly Democrat no matter who is on the ticket. If Alfred E. Newman were the candidate, this particular data point would look just the same. ..."
"... "On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would benefit hard industry and managerial interests." This doesn't ring true. Hard industry, and the managers that run it had no problem with moving jobs and factories overseas in pursuit of cheaper labor. Plus, it solved their Union issues. I feel like the divide is between large corporations, with dilute ownership and professional managers who nominally serve the interests of stock fund managers, while greatly enriching themselves versus a multitude of smaller, locally owned businesses whose owners were also concerned with the health of the local communities in which they lived. ..."
"... The financial elites are a consequence of consolidation in the banking and finance industry, where we now have 4 or 5 large institutions versus a multitude of local and regional banks that were locally focused. ..."
Since the Cold War ended, U.S. politics has seen a series of insurgent candidacies. Pat Buchanan prefigured Trump in the Republican
contests of 1992 and 1996. Ralph Nader challenged the Clinton wing of the Democratic Party from the outside in 2000. Ron Paul vexed
establishment Republicans John McCain and Mitt Romney in 2008 and 2012. And this year, Trump was not the only candidate to confound
his party's elite: Bernie Sanders harried Hillary Clinton right up to the Democratic convention.
What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy. All
have opposed large-scale free-trade agreements. (The libertarian Paul favors unilateral free trade: by his lights, treaties
like NAFTA and the Trans-Pacific Partnership are not free trade at all but international regulatory pacts.) And while no one would
mistake Ralph Nader's or Ron Paul's views on immigration for Pat Buchanan's or Donald Trump's, Nader and Paul have registered their
own dissents from the approach to immigration that prevails in Washington.
Sanders has been more in line with his party's orthodoxy on that issue. But that didn't save him from being attacked by Clinton
backers for having an insufficiently nonwhite base of support. Once again, what might have appeared to be a class conflict-in this
case between a democratic socialist and an elite liberal with ties to high finance-could be explained away as really about race.
Race, like religion, is a real factor in how people vote. Its relevance to elite politics, however, is less clear. Something else
has to account for why the establishment in both parties almost uniformly favors one approach to war, trade, and immigration,
while outsider candidates as dissimilar as Buchanan, Nader, Paul, and Trump, and to a lesser extent Sanders, depart from the consensus.
The insurgents clearly do not represent a single class: they appeal to eclectic interests and groups. The foe they have all
faced down, however-the bipartisan establishment-does resemble a class in its striking unity of outlook and interest. So what is
this class, effectively the ruling class of the country?
Some critics on the right have identified it with the "managerial" class described by James Burnham in his 1941 book The Managerial
Revolution . But it bears a stronger resemblance to what what others have called "the New Class." In fact, the interests of this
New Class of college-educated "verbalists" are antithetical to those of the industrial managers that Burnham described. Understanding
the relationship between these two often conflated concepts provides insight into politics today, which can be seen as a clash between
managerial and New Class elites.
♦♦♦
The archetypal model of class conflict, the one associated with Karl Marx, pits capitalists against workers-or, at an earlier
stage, capitalists against the landed nobility. The capitalists' victory over the nobility was inevitable, and so too, Marx believed,
was the coming triumph of the workers over the capitalists.
Over the next century, however, history did not follow the script. By 1992, the Soviet Union was gone, Communist China had embarked
on market reforms, and Western Europe was turning away from democratic socialism. There was no need to predict the future; mankind
had achieved its destiny, a universal order of [neo]liberal democracy. Marx had it backwards: capitalism was the end of history.
But was the truth as simple as that? Long before the collapse of the USSR, many former communists -- some of whom remained socialists,
while others joined the right-thought not. The Soviet Union had never been a workers' state at all, they argued, but was run
by a class of apparatchiks such as Marx had never imagined.
Among the first to advance this argument was James Burnham, a professor of philosophy at New York University who became a leading
Trotskyist thinker. As he broke with Trotsky and began moving toward the right, Burnham recognized affinities between the Soviet
mode of organization-in which much real power lay in the hands of the commissars who controlled industry and the bureaucratic organs
of the state-and the corporatism that characterized fascist states. Even the U.S., under the New Deal and with ongoing changes to
the balance between ownership and management in the private sector, seemed to be moving in the same direction.
Burnham called this the "managerial revolution." The managers of industry and technically trained government officials did not
own the means of production, like the capitalists of old. But they did control the means of production, thanks to their expertise
and administrative prowess.
The rise of this managerial class would have far-reaching consequences, he predicted. Burnham wrote in his 1943 book, The Machiavellians
: "that the managers may function, the economic and political structure must be modified, as it is now being modified, so as
to rest no longer on private ownership and small-scale nationalist sovereignty, but primarily upon state control of the economy,
and continental or vast regional world political organization." Burnham pointed to Nazi Germany, imperial Japan-which became a "continental"
power by annexing Korea and Manchuria-and the Soviet Union as examples.
The defeat of the Axis powers did not halt the progress of the managerial revolution. Far from it: not only did the Soviets retain
their form of managerialism, but the West increasingly adopted a managerial corporatism of its own, marked by cooperation between
big business and big government: high-tech industrial crony capitalism, of the sort that characterizes the military-industrial complex
to this day. (Not for nothing was Burnham a great advocate of America's developing a supersonic transport of its own to compete with
the French-British Concorde.)
America's managerial class was personified by Robert S. McNamara, the former Ford Motor Company executive who was secretary of
defense under John F. Kennedy and Lyndon Johnson. In a 1966 story for National Review , "Why Do They Hate Robert Strange McNamara?"
Burnham answered the question in class terms: "McNamara is attacked by the Left because the Left has a blanket hatred of the system
of business enterprise; he is criticized by the Right because the Right harks back, in nostalgia if not in practice, to outmoded
forms of business enterprise."
McNamara the managerial technocrat was too business-oriented for a left that still dreamed of bringing the workers to power. But
the modern form of industrial organization he represented was not traditionally capitalist enough for conservatives who were at heart
19th-century classical liberals.
National Review readers responded to Burnham's paean to McNamara with a mixture of incomprehension and indignation. It
was a sign that even readers familiar with Burnham-he appeared in every issue of the magazine-did not always follow what he was saying.
The popular right wanted concepts that were helpful in labeling enemies, and Burnham was confusing matters by talking about changes
in the organization of government and industry that did not line up with anyone's value judgements.
More polemically useful was a different concept popularized by neoconservatives in the following decade: the "New Class."
"This 'new class' is not easily defined but may be vaguely described," Irving Kristol wrote in a 1975 essay for the Wall
Street Journal :
It consists of a goodly proportion of those college-educated people whose skills and vocations proliferate in a 'post-industrial
society' (to use Daniel Bell's convenient term). We are talking about scientists, teachers, and educational administrators, journalists
and others in the communication industries, psychologists, social workers, those lawyers and doctors who make their careers in
the expanding public sector, city planners, the staffs of the larger foundations, the upper levels of the government bureaucracy,
and so on.
"Members of the new class do not 'control' the media," he continued, "they are the media-just as they are our educational
system, our public health and welfare system, and much else."
Burnham, writing in National Review in 1978, drew a sharp contrast between this concept and his own ideas:
I have felt that this 'new class' is, so far, rather thin gruel. Intellectuals, verbalists, media types, etc. are conspicuous
actors these days, certainly; they make a lot of noise, get a lot of attention, and some of them make a lot of money. But, after
all, they are a harum-scarum crowd, and deflate even more quickly than they puff up. On TV they can out-talk any of the managers
of ITT, GM, or IBM, or the administration-managers of the great government bureaus and agencies, but, honestly, you're not going
to take that as a power test. Who hires and fires whom?
Burnham suffered a stroke later that year. Although he lived until 1987, his career as a writer was over. His last years coincided
with another great transformation of business and government. It began in the Carter administration, with moves to deregulate transportation
and telecommunications. This partial unwinding of the managerial revolution accelerated under Ronald Reagan. Regulatory and welfare-state
reforms, even privatization of formerly nationalized industries, also took off in the UK and Western Europe. All this did not, however,
amount to a restoration of the old capitalism or anything resembling laissez-faire.
The "[neo]liberal democracy" that triumphed at "the end of history"-to use Francis Fukuyama's words-was not the managerial capitalism
of the mid-20th century, either. It was instead the New Class's form of capitalism, one that could be embraced by Bill Clinton and
Tony Blair as readily as by any Republican or Thatcherite.
Irving Kristol had already noted in the 1970s that "this new class is not merely liberal but truly 'libertarian' in its approach
to all areas of life-except economics. It celebrates individual liberty of speech and expression and action to an unprecedented degree,
so that at times it seems almost anarchistic in its conception of the good life."
He was right about the New Class's "anything goes" mentality, but he was only partly correct about its attitude toward economics.
The young elite tended to scorn the bourgeois character of the old capitalism, and to them managerial figures like McNamara were
evil incarnate. But they had to get by-and they aspired to rule.
Burnham had observed that the New Class did not have the means-either money or manpower-to wield power the way the managers
or the capitalists of old did. It had to borrow power from other classes. Discovering where the New Class gets it is as easy as following
the money, which leads straight to the finance sector-practically to the doorstep of Goldman Sachs. Jerry Rubin's journey from Yippie
to yuppie was the paradigm of a generation.
Part of the tale can be told in a favorable light. New Left activists like Carl Oglesby fought the spiritual aridity and murderous
militarism of what they called "corporate liberalism"-Burnham's managerialism-while sincere young libertarians attacked the regulatory
state and seeded technological entrepreneurship. Yet the New Class as a whole is less like Carl Oglesby or Karl Hess than like
Hillary Clinton, who arguably embodies it as perfectly as McNamara did the managerial class.
Even the New Class's support for deregulation-to the advantage of its allies on Wall Street-was no sign of consistent commitment
to free-market principles. On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the
protectionism that would benefit hard industry and managerial interests. The individual-mandate feature of Obamacare and Romneycare
is a prime example of New Class cronyism: government compels individuals to buy a supposedly private product or service.
The alliance between finance and the New Class accounts for the disposition of power in America today. The New Class has also
enlisted another invaluable ally: the managerial classes of East Asia. Trade with China-the modern managerial state par excellence-helps
keep American industry weak relative to finance and the service economy's verbalist-dominated sectors. America's class war, like
many others, is not in the end a contest between up and down. It's a fight between rival elites: in this case, between the declining
managerial elite and the triumphant (for now) New Class and financial elites.
The New Class plays a priestly role in its alliance with finance, absolving Wall Street for the sin of making money in exchange
for plenty of that money to keep the New Class in power. In command of foreign policy, the New Class gets to pursue humanitarian
ideological projects-to experiment on the world. It gets to evangelize by the sword. And with trade policy, it gets to suppress its
class rival, the managerial elite, at home. Through trade pacts and mass immigration the financial elite, meanwhile, gets to maximize
its returns without regard for borders or citizenship. The erosion of other nations' sovereignty that accompanies American hegemony
helps toward that end too-though our wars are more ideological than interest-driven.
♦♦♦
So we come to an historic moment. Instead of an election pitting another Bush against another Clinton, we have a race that poses
stark alternatives: a choice not only between candidates but between classes-not only between administrations but between regimes.
Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes,
"big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the
bipartisan establishment, even if he goes down to defeat in November.
The New Class, after all, lacks a popular base as well as money of its own, and just as it relies on Wall Street to underwrite
its power, it depends on its competing brands of identity politics to co-opt popular support. For the center-left establishment,
minority voters supply the electoral muscle. Religion and the culture war have served the same purpose for the establishment's center-right
faction. Trump showed that at least one of these sides could be beaten on its own turf-and it seems conceivable that if Bernie Sanders
had been black, he might have similarly beaten Clinton, without having to make concessions to New Class tastes.
The New Class establishment of both parties may be seriously misjudging what is happening here. Far from being the last gasp of
the demographically doomed-old, racially isolated white people, as Gallup's analysis says-Trump's insurgency may be the prototype
of an aggressive new politics, of either left or right, that could restore the managerial elite to power.
This is not something that conservatives-or libertarians who admire the old capitalism rather than New Class's simulacrum-might
welcome. But the only way that some entrenched policies may change is with a change of the class in power.
Daniel McCarthy is the editor of The American Conservative .
Excellent analysis. What is important about the Trump phenomenon is not every individual issue, it's the potentially revolutionary
nature of the phenomenon. The opposition gets this. That's why they are hysterical about Trump. The conservative box checkers
do not.
"Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big
government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan
establishment, even if he goes down to defeat in November."
My question is, if Trump is not himself of the managerial class, in fact, could be considered one of the original new class
members, how would he govern? What explains his conversion from the new class to the managerial class; is he merely taking advantage
of an opportunity or is there some other explanation?
I'm genuinely confused by the role you ascribe to the 'managerial class' here. Going back to Berle and Means ('The Modern Corporation
and Private Property') the managerial class emerged when management was split from ownership in mid C20th capitalism. Managers
focused on growth, not profits for shareholders. The Shareholder revolution of the 1980s destroyed the managerial class, and destroyed
their unwieldy corporations.
You seem to be identifying the managerial class with a kind of cultural opposition to the values of [neo]liberal capitalism. And
instead of identifying the 'new class' with the new owner-managers of shareholder-driven firms, you identify them by their superficial
cultural effects.
This raises a deeper problem in how you talk about class in this piece. Marx taught that you identify classes by their
structural role in the system of production. I'm at a loss to see how either of the 'classes' you mention here relate to the system
of production. Does the 'new class' of journalists, academics, etc. actually own anything? If not, what is the point of ascribing
to them immense economic power?
I would agree that there is a new class of capitalists in America. But they are well known people like Sheldon Adelson, the Kochs,
Linda McMahon, the Waltons, Rick Scott the pharmaceutical entrepreneur, Mitt Romney, Mark Zuckerberg, and many many hedge fund
gazillionaires. These people represent the resurgence of a family-based, dynastic capitalism that is utterly different from the
managerial variety that prevailed in mid-century.
If there is a current competitor to international corporate capitalism, it is old-fashioned dynastic family capitalism. Not
Managerialism.
There is no "new class". That's simply a derogatory trope of the Right. The [neo]liberal elite educated, cosmopolitan and possessed
of sufficient wealth to be influential in political affairs and claims to power grounded in moral stances have a long pedigree
in both Western and non-Western lands. They were the Scribal Class in the ancient world, the Mandarins of China, and the Clergy
in the Middle Ages. This class for a time was eclipsed in the early modern period as first royal authority became dominant, followed
by the power of the Capitalist class (the latter has never really faded of course). But their reemergence in the late 20th century
is not a new or unique phenomenon.
In a year in which "trash Trump" and "trash Trump's supporters" are tricks-to-be-turned for more than 90% of mainstream journalists
and other media hacks, it's good to see Daniel McCarthy buck the "trash trend" and write a serious, honest analysis of the class
forces that are colliding during this election cycle.
Two thumbs way up for McCarthy, although his fine effort cannot save the reputation of those establishment whores who call
themselves journalists. Nothing can save them. They have earned the universality with which Americans hold them in contempt.
In 1976 when Gallup began asking about "the honesty and ethical standards" of various professions only 33% of Americans rated
journalists "very high or high."
By last December that "high or very high" rating for journalists had fallen to just 27%.
It is certain that by Election Day 2016 the American public's opinion of journalists will have fallen even further.
Most of your argument is confusing. The change I see is from a production economy to a finance economy. Wall Street rules, really.
Basically the stock market used to be a place where working folk invested their money for retirement, mostly through pensions
from unions and corporations. Now it's become a gambling casino, with the "house"-or the big banks-putting it's finger on the
roulette wheel. They changed the compensation package of CEO's, so they can rake in huge executive compensationmostly through
stock options-to basically close down everything from manufacturing to customer service, and ship it off to contract manufacturers
and outside services in oligarchical countries like mainland China and India.
I don't know what exactly you mean about the "new class", basically its the finance industry against everyone else.
One thing you right-wingers always get wrong, is on Karl Marx he was really attacking the money-changers, the finance speculators,
the banks. Back in the day, so-called "capitalists" like Henry Ford or George Eastman or Thomas Edison always complained about
the access to financing through the big money finance capitalists.
Don't overlook the economic value of intellectual property rights (patents, in particular) in the economic equation.
A big chunk of the 21st century economy is generated due to the intellectual property developed and owned by the New Class
and its business enterprises.
The economic value of ideas and intellectual property rights is somewhat implied in McCarthy's explanation of the New Class,
but I didn't see an explicit mention (perhaps I overlooked it).
I think the consideration of intellectual property rights and the value generated by IP might help to clarify the economic
power of the New Class for those who feel the analysis isn't quite complete or on target.
I'm not saying that IP only provides value to the New Class. We can find examples of IP throughout the economy, at all levels.
It's just that the tech and financial sectors seem to focus more on (and benefit from) IP ownership, licensing, and the information
captured through use of digital technology.
"What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy."
But today we have this: Trump pledges big US military
expansion . Trump doesn't appear to have any coherent policy, he just says whatever seems to be useful at that particular
moment.
[New] Class better describes the Never Trumpers. Mostly I have found them to be those involved in knowledge occupations (conservative
think tanks, hedge fund managers, etc.) who have a pecuniary interest in maintaining the Global Economy as opposed to the Virtuous
Intergenerational Economy that preceded. Many are dependent on funding sources for their livelihoods that are connected to the
Globalized Economy and financial markets.
Being white is not the defining characteristic of Trumpers because it if was then how come there are many white working class
voters for Hillary? The divide in the working class comes from being a member of a union or a member of the private non-unionized
working class.
Where the real class divide shows up is in those who are members of the Knowledge Class that made their living based on the
old Virtuous Economy where the elderly saved money in banks and the banks, in turn, lent that money out to young families to buy
houses, cars, and start businesses. The Virtuous Economy has been replaced by the Global Economy based on diverting money to the
stock market to fund global enterprises and prop up government pension funds.
The local bankers, realtors, private contractors, small savers and small business persons and others that depended on the Virtuous
Economy lost out to the global bankers, stock investors, pension fund managers, union contractors and intellectuals that propounded
rationales for the global economy as superior to the Virtuous Economy.
Where the class conflict between the Working and Knowledge Classes begins is where the Knowledge Class almost unilaterally
decided to shift to a global economy, at the expense of the Working Class, and to the self-benefit of the Knowledge Class. Those
who designed the Global Economy like Larry Summers of Harvard did not invite private or public labor to help design the new Globalist
Economy. The Working Class lost out big time in job losses and getting stuck with subprime home loans that busted their marriages
and created bankruptcies and foreclosures. The Knowledge Class was mostly unscathed by this class-based economic divide.
Beginning in the 50's and 60's, baby boomers were warned in school and cultural media that "a college diploma would become what
a high school diploma is today." An extraordinary cohort of Americans took this advice seriously, creating the smartest and most
successful generation in history. But millions did not heed that advice, cynically buoyed by Republicans who knowing that college
educated people vote largely Democrat launched a financial and cultural war on college education. The result is what you see
now: millions of people unprepared for modern employment; meanwhile we have to import millions of college-educated Asians and
Indians to do the work there aren't enough Americans to do.
Have to say, this seems like an attempt to put things into boxes that don't quite fit.
Trump's distinguishing ideology, which separates him from the current elite, is something he has summed up many times
nationalism vs. Globalism.
The core of it is that the government no longer serves the people. In the United States, that is kind of a bad thing, you know?
Like the EU in the UK, the people, who fought very hard for self-government, are seeing it undermined by the erosion of the nation
state in favor of international beaurocracy run by elites and the well connected.
Both this article and many comments on it show considerable confusion, and ideological opinion all over the map. What is happening
I think is that the world is changing due to globalism, technology, and the sheer huge numbers of people on the planet. As a
result some of the rigid trenches of thought as well as class alignments are breaking down.
In America we no longer have capitalism, of either the 19th century industrial or 20th century managerial varieties. Money
and big money is still important of course, but it is increasingly both aligned with and in turn controlled by the government.
The financial industry, the new tech giants, the health insurance industry are now almost indistinguishable from the government
ruling elite. The old leftrepresented by Sandersrails against this as big money coopting government, even while conservatives
are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both
are right in a sense.
The hyperconcentration of power in Washington and a few tributary locations like Wall Street and Silicon Valley, elite
academia and the mediacall that the New Class if you likemeans that most of AmericaMain Street, the flyover country has been
left behind. Trump instinctively brilliantly in some ways tapped into the resentment that this hyperconcentration of wealth
and government power has led to. That is why it cuts across right and left. The elites want to characterize this resentment as
backwards and "racist," but there is also something very American from Jefferson to Jackson to Teddy Roosevelt that revolts against
being lectured to and controlled by their would-be "betters."
The alienation of those left out is real and based on real erosion of the middle class and American dream under both parties'
elites. The potentially revolutionary capabilities of a political movement that could unite right and left in restoring some equilibrium
and opportunities to those left out is tremendous, but yet to be realized by either major party. The party that can harness these
folks who are after all the majority of Americans will have a ruling coalition for decades. If neither party can productively
harness this budding movement, we are headed for disarray, civil unrest, and potentially the dissolution of the USA.
I have one condition about which, Mr. Trump would lose my support - if he flinches on immigration, I will have to bow out.
I just don't buy the contentions about color here. He has made definitive moves to ensure that he intends to fight for US citizens
regardless of color. This nonsense about white racism, more bigotry in reality, doesn't pan out. The Republican party has been
comprised of mostly whites since forever and nearly all white sine the late 1960's. Anyone attempting to make hay out of what
has been the reality for than 40 years is really making the reverse pander. Of course most of those who have issues with blacks
and tend to be more expressive about it, are in the Republican party. But so what. Black Republicans would look at you askance,
should you attempt this FYI.
It's a so what. The reason you joining a party is not because the people in it like you, that is really beside the point. Both
Sec Rice and General Powell, are keenly aware of who's what it and that is the supposed educated elite. They are not members of
the party because it is composed of some pure untainted membership. But because they and many blacks align themselves with the
ideas of the party, or what the party used to believe, anyway.
It's the issues not their skin color that matters. And blacks who cleave to the democrats despite being sold down the tubes
on issues, well, for whatever reason, they just have thinner skin and the mistaken idea that the democrats deliver thanks to
Pres. Johnson. But what Pres. Johnson delivered democrats made a mockery of immediately as they stripped it of its intent and
used for their own liberal ends.
I remain convinced that if blacks wanted progress all they need do is swamp the Republican party as constituents and confront
whatever they thought was nonsense as constituents as they move on policy issues. Goodness democrats have embraced the lighter
tones despite having most black support. That is why the democrats are importing so many from other state run countries. They
could ignore blacks altogether. Sen Barbara Jordan and her deep voiced rebuke would do them all some good.
Let's face it - we are not going to remove the deeply rooted impact of skin color, once part of the legal frame of the country
for a quarter of the nations populous. What Republicans should stop doing is pretending, that everything concerning skin color
is the figment of black imagination. I am not budging an inch on the Daughters of the American Revolution, a perfect example of
the kind of peculiar treatment of the majority, even to those who fought for Independence and their descendants.
________________
I think that there are thousands and thousands of educated (degreed)people who now realize what a mess the educational and
social services system has become because of our immigration policy. The impact on social services here in Ca is no joke. In the
face of mounting deficits, the laxity of Ca has now come back to haunt them. The pressure to increase taxes weighed against the
loss of manual or hard labor to immigrants legal and otherwise is unmistakable here. There's debate about rsstroom etiquette in
the midst of serious financial issues - that's a joke. So this idea of dismissing people with degrees as being opposed to Mr.
Trump is deeply overplayed and misunderstood. If there is a class war, it's not because of Mr. Trump, those decks were stacked
in his favor long before the election cycle.
--------
"But millions did not heed that advice, cynically buoyed by Republicans whoknowing that college educated people vote largely
Democratlaunched a financial and cultural war on college education. The result is what . . . employment; meanwhile we have to
import millions of college-educated Asians and Indians to do the work there aren't enough Americans to do."
Hmmmm,
Nope. Republicans are notorious for pushing education on everything and everybody. It's a signature of hard work, self reliance,
self motivation and responsibility. The shift that has been tragic is that conservatives and Republicans either by a shove or
by choice abandoned the fields by which we turn out most future generations - elementary, HS and college education. Especially
in HS, millions of students are fed a daily diet of liberal though unchecked by any opposing ideas. And that is become the staple
for college education - as it cannot be stated just how tragic this has become for the nation. There are lots of issues to moan
about concerning the Us, but there is far more to embrace or at the very least keep the moaning in its proper context. No, conservatives
and Republicans did engage in discouraging an education.
And there will always be a need for more people without degrees than with them. even people with degrees are now getting hit
even in the elite walls of WS finance. I think I posted an article by John Maulden about the growing tensions resulting fro the
shift in the way trading is conducting. I can build a computer from scratch, that's a technical skill, but the days of building
computers by hand went as fast it came. The accusation that the population should all be trained accountants, book keepers, managers,
data processors, programmers etc. Is nice, but hardly very realistic (despite my taking liberties with your exact phrasing). A
degree is not going to stop a company from selling and moving its production to China, Mexico or Vietnam - would that were true.
In fact, even high end degree positions are being outsourced, medicine, law, data processing, programming . . .
How about the changes in economy that have forced businesses to completely disappear. We will never know how many businesses
were lost in the 2007/2008 financial mess. Recovery doesn't exist until the country's growth is robust enough to put people back
to work full time in a manner that enables them to sustain themselves and family.
That income gap is real and its telling.
___________________
even if I bought the Karl Marx assessment. His solutions were anything but a limited assault on financial sector oligarchs
and wizards. And in practice it has been an unmitigated disaster with virtually not a single long term national benefit. It's
very nature has been destructive, not only to infrastructure, but literally the lifeblood of the people it was intended to rescue.
Let's see if I can help Dreher clear up some confusion in his article. James Burnham's "Managerial Class" and the "New Class"
are overlapping and not exclusive. By the Managerial Class Burnham meant both the executive and managers in the private sector
and the Bureaucrats and functionaries in the public sector.
There are two middle classes in the US: the old Business Class and the New Knowledge Class. A manager would be in the Business
Class and a Bureaucrat in the New Class.
The rise of managers was a "revolution" because of the rise of modernization which meant the increasing mechanization,
industrialization, formalization and rationalization (efficiency) of society. Burnham's concern about the rise of the managerial
revolution was misplaced; what he should have focused on was modernization.
The New Class were those in the mostly government and nonprofit sectors that depended on knowledge for their livelihood without
it being coupled to any physical labor: teachers, intellectuals, social workers and psychiatrists, lawyers, media types, hedge
fund managers, real estate appraisers, financial advisors, architects, engineers, etc. The New Knowledge Class has only risen
since the New Deal created a permanent white collar, non-business class.
The Working Class are those who are employed for wages in manual work in an industry producing something tangible (houses,
cars, computers, etc.). The Working Class can also have managers, sometimes called supervisors. And the Working Class is comprised
mainly of two groups: unionized workers and private sector non-unionized workers. When we talk about the Working Class we typically
are referring to the latter.
The Trumpsters should not be distinguished as being a racial group or class (white) because there are many white people who
support Clinton. About 95% of Blacks vote Democratic in the US. Nowhere near that ratio of Whites are supporting Trump. So Trumps'
support should not be stereotyped as White.
The number one concern to Trumpsters is that they reflect the previous intergenerational economy where the elderly lent money
to the young to buy homes, cars and start small businesses. The Global bankers have shifted money into the stock market because
0.25% per year interest rates in a bank isn't making any money at all when money inflation runs at 1% to 2% (theft). This has
been replaced by a Global Economy that depends on financial bubbles and arbitraging of funds.
"The old leftrepresented by Sandersrails against this as big money coopting government, even while conservatives are exasperated
by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right
in a sense."
Why other couching this. Ten years ago if some Hollywood exec had said, no same sex marriage, no production company in your
town, the town would have shrugged. Today before shrugging, the city clerk is checking the account balance. When the governors
of Michigan, and Arizona bent down in me culpa's on related issue, because business interests piped in, it was an indication that
the game had seriously changed. Some 3 5% of the population facing no real opposition has decided that that their private
lives needed public endorsement and have proceeded to upend the entire social order - the game has shifted in ways I am not sure
most of the public fully grasps or desires.
Same sex weddings in US military chapels - the concept still turns my stomach. Advocates control the megaphones, I don't think
they control the minds of the public, despite having convinced a good many people that those who have chosen this expression are
under some manner of assault that demands a legal change - intelligent well educated, supposedly astute minded people actually
believe it. Even the Republican nominee believes it.
I love Barbara Streisand, but if the election means she moves to Canada, well, so be it. Take your "drag queens" impersonators
wit you. I enjoy Mr. and Mrs Pitt, I think have a social moral core but really? with millions of kids future at stake, endorsing
a terminal dynamic as if it will save society's ills - Hollywood doesn't even pretend to behave royally much less embody the sensitivities
of the same.
There is a lot to challenge about supporting Mr. Trump. He did support killing children in the womb and that is tragic. Unless
he has stood before his maker and made this right, he will have to answer for that. But no more than a trove of Republicans who
supported killing children in the womb and then came to their senses. I guess of there is one thing he and I agree on, it's not
drinking.
As for big budget military, it seems a waste, but if we are going to waste money, better it be for our own citizens. His Achilles
heel here is his intentions as to ISIS/ISIL. I think it's the big drain getting ready to suck him into the abyss of intervention
creep.
Missile defense just doesn't work. The tests are rigged and as Israel discovered, it's a hit and miss game with low probability
of success, but it makes for great propaganda.
I am supposed to be outraged by a football player stance on abusive government. While the democratic nominee is turning over
every deck chair she find, leaving hundreds of thousands of children homeless - let me guess, on the bright side, George Clooney
cheers the prospect of more democratic voters.
If Mr. Trumps only achievements are building a wall, over hauling immigration policy and expanding the size of the military.
He will be well on his way to getting ranked one of the US most successful presidents.
I never understood why an analysis needs to lard in every conceivable historical reference and simply assume its relevance, when
there are so many non constant facts and circumstances. There has always been and will always be class conflict, even if it
falls short of a war. Simply examining recent past circumstances, the wealthy class has been whooping up on all other classes.
This is not to suggest any sort of remedy, but simply to observe that income disparity over the past 30 years has substantially
benefitted on sector of class and political power remains in their hands today. To think that there will never be class conflict
is to side with a Marxian fantasy of egalitarianism, which will never come to pass. Winners and losers may change positions, but
the underlying conflict will always remain.
State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there.
Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they
would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those.
The split on Trump is first by race (obviously), then be gender (also somewhat obviously), and then by education. Even among
self-declared conservatives it's the college educated who tend to oppose him. This is a lot broader than simply losing some "new"
Knowledge Class, unless all college educated people are put in that grouping. In fact he is on track to lose among college educated
whites, something no GOP candidate has suffered since the days of FDR and WWII.
People don't really care for the actions of the elite but they care for the consequences of these actions. During the 1960's,
per capita GDP growth was around 3.5%. Today it stands at 0,49%. If you take into account inflation, it's negative. Add to this
the skewed repartition of said growth and it's intuitive that many people feel the pain; whom doesn't move forward, goes backwards.
People couldn't care for mass immigration, nation building or the emergence of China if their personal situation was not
impacted. But now, they begin to feel the results of these actions.
I have a simple philosophy regarding American politics that shows who is made of what, and we don't have to go through all
the philosophizing in this article: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable.
Anyone who puts Israeli interests above America's is un-American.
EliteComic beat me to the punch. I was disappointed that Ross Perot, who won over 20% of the popular vote twice, and was briefly
in the lead in early 1992, wasn't mentioned in this article.
Re: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli
interests above America's is un-American.
The first has nothing whatsoever to do with American citizenship. It's just a political issue on which, yes, reasonable
people can differ. However no American citizen should put the interests of any other country ahead of our own, except in a situation
where the US was itself up to no good and deserved its comeuppance. And then the interest is not that of any particular nation,
but of justice being done period.
A lot of this "New Class" stuff is just confusing mis-mash of this and that theory. Basically, America changed when the US
dollar replace gold as the medium of exchange in the world economy. Remember when we called it the PETRO-DOLLAR. As long as the
Saudis only accepted the US dollar as the medium of exchange for oil, then the American government could export it's inflation
and deficit spending. Budget deficits and trade deficits are intrinsically related. It allowed America to become a nation of consumers
instead of a nation of producers.
Who really cares about the federal debt. REally? We can print dollars, exchange these worthless dollars with China for hard
goods, and then China lends the dollars back to us, to pay for our government. Get it?
It's really a form of classic IMPERIALISM. To maintain this system, we've got the US military and we prop up the corrupt
dictatorships in Saudi Arabia, Iraq, Libya
Yeah, you can talk about the "new class", the corruption of the banking system by the idiotic "libertarian" or "free market
utopianism" of the Gingrich Congress, the transformation of American corporations to international corporations, and on and on.
But it's the US dollar as reserve currency that has allowed it all to happen. God help us, if it ends, we'll be crippled.
And damn the utopianism of you "libertarians" you're worse then Marxists when it comes to ideology over reality.
"State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back
in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would
only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those."
Ah, not it's policy on some measure able effect. The seatbelt law was debate across the country. The data indicated that it
did in fact save lives. And it's impact was universal applicable to every man women or child that got into a vehicle.
That was not a private bedroom issue. Of course businesses have advocated policy. K street is not a K-street minus that reality.
But GM did not demand having relations in parked cars be legalized or else.
You are taking my apples and and calling them seatbelts - false comparison on multiple levels, all to get me to acknowledge
that businesses have influence. It what they have chosen to have influence on -
I do not think the issue of class is relevant here whether it be new classes or old classes. There are essentially two classes
those who win given whatever the current economic arrangements are or those who lose given those same arrangements. People who
think they are losing support Trump versus people who think they are winning support Clinton. The polls demonstrates this Trump
supporters feel a great deal more anxiety about the future and are more inclined to think everything is falling apart whereas
Clinton supporters tend to see things as being okay and are optimistic about the future. The Vox work also shows this pervasive
sense that life will not be good for their children and grandchildren as a characteristic of Trump supporters.
The real shift I think is in the actual coalitions that are political parties. Both the GOP and the Dems have been coalitions
political parties usually are. Primary areas of agreement with secondary areas of disagreement. Those coalitions no longer work.
The Dems can be seen as a coalition of the liberal knowledge types who are winners in this economy and the worker types who
are often losers now in this economy. The GOP also is a coalition of globalist corporatist business types (winners) with workers
(losers) who they attracted in part because of culture wars and the Dixiecrats becoming GOPers. The needs of these two groups
in both parties no longer overlap. The crisis is more apparent in the GOP because well Trump. If Sanders had won the nomination
for the Dems (and he got close) then their same crisis would be more apparent. The Dems can hold their creaky coalition together
because Trump went into the fevered swamps of the alt. right.
I think this is even more obvious in the UK where you have a Labor Party that allegedly represents the interests of working
people but includes the cosmopolitan knowledge types. The cosmopolitans are big on the usual identity politics, unlimited immigration
and staying in the EU. They benefit from the current economic arrangement. But the workers in the Labor party have been hammered
by the current economic arrangements and voted in droves to get out of the EU and limit immigration. It seems pretty obvious that
there is no longer a coalition to sustain the Labor Party. Same with Tories some in the party love the EU,immigration, globalization
while others voted out of the EU, want immigration restricted and support localism. The crisis is about the inability of either
party to sustain its coalitions. Those in the Tory party who are leavers should be in a political party with the old Labor working
class while the Tory cosmopolitans should be in a party with the Labor cosmopolitans. The current coalitions not being in synch
is the political problem not new classes etc.
Here in the US the southern Dixiecrats who went to the GOP and are losers in this economy might find a better coalition with
the black, Latino and white workers who are still in the Dem party. But as in the UK ideological culture wars have become more
prominent and hence the coalitions are no longer economically based. If people recognized that politics can only address the economic
issues and they aligned themselves accordingly the membership of the parties would radically change.
The Clinton Class mocks The Country Class: Bill Clinton, "We all know how her opponent's done real well down in West Virginia
and eastern Kentucky. Because the coal people don't like any of us anymore." "They blame the president when the sun doesn't come
up in the morning now,"
"Trump's voters were most strongly characterized by their "racial isolation": they live in places with little ethnic diversity.
"
During the primaries whites in more diverse areas voted Trump. The only real exception was West Virginia. Utah, Wyoming, Iowa?
All voted for Cruz and "muh values".
In white enclaves like Paul Ryans district, which is 91%, whites are able to signal against white identity without having to
face the consequences.
"All three major African, Hispanic, & Asian-American overwhelming support HRC in the election."
That doesn't mean they actually support Hillary's policies and position. What do they really know about either? These demographics
simply vote overwhelmingly Democrat no matter who is on the ticket. If Alfred E. Newman were the candidate, this particular data
point would look just the same.
"On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would
benefit hard industry and managerial interests."
This doesn't ring true. Hard industry, and the managers that run it had no problem with moving jobs and factories overseas
in pursuit of cheaper labor. Plus, it solved their Union issues. I feel like the divide is between large corporations, with dilute
ownership and professional managers who nominally serve the interests of stock fund managers, while greatly enriching themselves
versus a multitude of smaller, locally owned businesses whose owners were also concerned with the health of the local communities
in which they lived.
The financial elites are a consequence of consolidation in the banking and finance industry, where we now have 4 or 5 large
institutions versus a multitude of local and regional banks that were locally focused.
"... By Jayati Ghosh, Professor of Economics and Chairperson at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. Originally published at The Frontline ..."
"... President Obama has been a fervent supporter of both these deals, with the explicit aim of enhancing and securing US power. "We have to make sure America writes the rules of the global economy. We should do it today while our economy is in the position of global strength. We've got to harness it on our terms. If we don't write the rules for trade around the world guess what? China will!", he famously said in a speech to workers in a Nike factory in Oregon, USA in May 2015. But even though he has made the case for the TPP plainly enough, his only chance of pushing even the TPP through is in the "lame duck" session of Congress just before the November Presidential election in the US. ..."
"... The official US version, expressed on the website of the US Trade Representative, is that the TPP "writes the rules for global trade-rules that will help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen the American middle class." This is mainly supposed to occur because of the tariff cuts over 18,000 items that have been written into the agreement, which in turn are supposed to lead to significant expansion of trade volumes and values. ..."
"... But this is accepted by fewer and fewer people in the US. Across the country, workers view such trade deals with great suspicion as causing shifts in employment to lower paid workers, mostly in the Global South. ..."
"... But in fact the TPP and the TTIP are not really about trade liberalisation so much as other regulatory changes, so in any case it is hardly surprising that the positive effects on trade are likely to be so limited. What is more surprising is how the entire discussion around these agreements is still framed around the issues relating to trade liberalisation, when these are in fact the less important parts of these agreements, and it is the other elements that are likely to have more negative and even devastating effects on people living in the countries that sign up to them. ..."
"... Three aspects of these agreements are particularly worrying: the intellectual property provisions, the restrictions on regulatory practices and the investor-state dispute settlement provisions ..."
"... All of these would result in significant strengthening of the bargaining power of corporations vis-ΰ-vis workers and citizens, would reduce the power of governments to bring in policies and regulations that affect the profits or curb the power of such corporations ..."
"... So if such features of US-led globalisation are indeed under threat, that is probably a good thing for the people of the US and for people in their trading partners who had signed up for such deals. ..."
"... The question arises: is Trump evil? Or merely awful? If Trump is merely awful, then we are not faced with voting for the Lesser Evil or otherwise voting Third Party in protest. If we are faced with a choice between Evil and Awful, perhaps a vote for Awful is a vote against Evil just by itself. ..."
"... Trump has backpedaled and frontpedaled on virtually everything, but on trade, he's got Sanders-level consistency. He's been preaching the same sanity since the 90s. https://www.youtube.com/watch?v=GZpMJeynBeg ..."
"... While I do not disagree with your comments, they must be placed in proper context: there is no substantive difference between Mike Pence and Tim Kaine, and the people who staff the campaigns of Trump and Clinton are essentially the same. (Fundamentally a replay of the 2000 election: Cheney/Bush vs. Lieberman/Gore.) ..."
"... Great Comment. Important to knock down the meme that "this is the most significant or important election of our time" - this is a carbon copy of what we have seen half a dozen times since WW2 alone and that's exactly how our elite handlers want it. Limit the choices, stoke fear, win by dividing the plebes. ..."
"... Let's face it, trade without the iron fist of capitalism will benefit us schlobs greatly and not the 1%. I'm all for being against it (TPP etc) and will vote that way. ..."
"... We'd also have put in enough puppet dictators in resource rich countries that we'd be able to get raw materials cheaply. The low labor/raw material cost will provide a significant advantage for exports but alas, our 99% won't be able to afford our own products. ..."
"... the TPP will completely outlaw any possibility of a "Buy America" clause in the future! ..."
"... The cynic in me wonders if under say NAFTA it would be possible for a multinational to sue for lost profits via isds if TPP fails to pass. That the failure to enact trade "liberalizing" legislation could be construed as an active step against trade. the way these things are so ambiguously worded, I wonder. ..."
"... Here's Obama's actual speech at the Nike headquarters (not factory). http://www.americanrhetoric.com/speeches/barackobama/barackobamatradenike.htm ..."
"... It should be noted that the Oregon Democrats who were free traitors and supported fast track authority were called out that day: Bonamici, Blumenauer, Schrader and Wyden. The only Oregon Ds that opposed: Sen. Merkley and Congressman DeFazio. ..."
"... The Market Realist is far more realistic about Oregon's free traitors' votes. http://marketrealist.com/2015/05/trans-pacific-partnership-affects-footwear-firms/ "US tariffs on footwear imported from Vietnam can range from 5% to 40%, according to OTEXA (Office of Textiles and Apparel). Ratification of the TPP will likely result in lower tariffs and higher profitability for Nike." ..."
"... So what's the incentive for Oregon's free traitors to support the TPP now? ..."
"... Perhaps they still need to show loyalty to their corporate owners and to the principle of "free trade". ..."
"... Obama: "We have to make sure America writes the rules of the global economy." ..."
"... Thank you, Mr. President, for resolving any doubts that the American project is an imperialist project! ..."
"... Yes, and I would add a jingoistic one as well. Manifest destiny, the Monroe doctrine, etc. are not just history lessons but are alive and well in the neoliberal mindset. The empire must keep expanding into every nook and cranny of the world, turning them into good consumerist slaves. ..."
"... Funny how little things change over the centuries. ..."
"... The West Is The Best, Subhuman Are All The Rest. The perpetual mantra of the Uebermensch since Columbus first made landfall. Hitler merely sought to apply the same to some Europeans. ..."
"... "How the West Came to Rule: The Geopolitical Origins of Capitalism", 2015, Alexander Anievas and Kerem Nisancioglu. ..."
"... The Dem candidate's husband made it appallingly clear what the purpose of the TPP is: "It's to make sure the future of the Asia-Pacific region is not dominated by China". ..."
"... Bill Clinton doesn't even care about "the rise of China". That's just a red herring he sets up to accuse opponents of TPP of soft-on-China treasonism. It's just fabricating a stick to beat the TPP-opponents with. Clinton's support for MFN for China shows what he really thinks about the "rise of China". ..."
"... Clinton's real motivation is the same as the TPP's real reason, to reduce America to colonial possession status of the anti-national corporations and the Global OverClass natural persons who shelter behind and within them. ..."
"... Obama. Liar or stupid? When Elizabeth Warren spoke out about the secrecy of the TPP, Obama, uncharacteristically, ran to the cameras to state that the TPP was not secret and that the charge being leveled by Warren was false. Obama's statement was that Warren had access to a copy so how dare she say it was secret. ..."
"... Obama (and Holder) effectively immunized every financial criminal involved in the great fraud and recession without bothering to run for a camera, and to this day has refused and avoided any elaboration on the subject, but he wasted no time trying to bury Warren publicly. The TPP is a continuation of Obama's give-away to corporations, or more specifically, the very important men who run them who Obama works for. And he is going to pull out all stops to deliver to the men he respects. ..."
"... It's a virtual "black market" of "money laundering" (sterilization). In foreign trade, IMPORTS decrease (-) the money stock of the importing country (and are a subtraction to domestic gDp figures), while EXPORTS increase (+) the money stock and domestic gDp (earnings repatriated to the U.S), and the potential money supply, of the exporting country. ..."
"... I don't WANT the US writing the rules of trade any longer. We know what US-written rules do: plunge worker wages into slave labor territory, guts all advanced country's manufacturing capability, sends all high tech manufacturing to 3rd world nations ..."
"... Time to toss the rules and re-write them for the greatest benefit of the greatest number of NON-wealthy and for the benefit of the planet/ecosystems, NOT for benefit of Wall St. ..."
By Jayati Ghosh, Professor of Economics and Chairperson at the Centre for Economic Studies and Planning, Jawaharlal Nehru
University, New Delhi. Originally published at
The Frontline
There is much angst in the Northern financial media about how the era of globalisation led actively by the United States may well
be coming to an end. This is said to be exemplified in the changed political attitudes to mega regional trade deals like the Trans
Pacific Partnership Agreement (TPP) that was signed (but has not yet been ratified) by the US and 11 other countries in Latin America,
Asia and Oceania; and the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) still being negotiated by the US and the
European Union.
President Obama has been a fervent supporter of both these deals, with the explicit aim of enhancing and securing US power.
"We have to make sure America writes the rules of the global economy. We should do it today while our economy is in the position
of global strength. We've got to harness it on our terms. If we don't write the rules for trade around the world guess what? China
will!", he famously said in a speech to workers in a Nike factory in Oregon, USA in May 2015. But even though he has made the case
for the TPP plainly enough, his only chance of pushing even the TPP through is in the "lame duck" session of Congress just before
the November Presidential election in the US.
However, the changing political currents in the US are making that ever more unlikely. Hardly anyone who is a candidate in the
coming elections, whether for the Presidency, the Senate or the House of Representatives, is willing to stick their necks out to
back the deal.
Both Presidential candidates in the US (Donald Trump and Hillary Clinton) have openly come out against the TPP. In Clinton's case
this is a complete reversal of her earlier position when she had referred to the TPP as "the gold standard of trade deals" and
it has clearly been forced upon her by the insurgent movement in the Democratic Party led by Bernie Sanders. She is already being
pushed by her rival candidate for not coming out more clearly in terms of a complete rejection of this deal. Given the significant
trust deficit that she still has to deal with across a large swathe of US voters, it will be hard if not impossible for her to backtrack
on this once again (as her husband did earlier with NAFTA) even if she does achieve the Presidency.
The official US version, expressed on the website of the US Trade Representative, is that the TPP "writes the rules for global
trade-rules that will help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen
the American middle class." This is mainly supposed to occur because of the tariff cuts over 18,000 items that have been written
into the agreement, which in turn are supposed to lead to significant expansion of trade volumes and values.
But this is accepted by fewer and fewer people in the US. Across the country, workers view such trade deals with great suspicion
as causing shifts in employment to lower paid workers, mostly in the Global South. Even the only US government study of the
TPP's likely impacts, by the International Trade Commission, could project at best only 1 per cent increase in exports due to the
agreement up to 2032. A study by Jeronim Capaldo and Alex Izurieta with Jomo Kwame Sundaram ("Trading down: Unemployment, inequality
and other risks of the Trans Pacific Partnership Agreement", Working Paper 16-01, Global Development and Environment Institute, January
2016) was even less optimistic, even for the US. It found that the benefits to exports and economic growth were likely to be relatively
small for all member countries, and would be negative in the US and Japan because of losses to employment and increases in inequality.
Wage shares of national income would decline in all the member countries.
But in fact the TPP and the TTIP are not really about trade liberalisation so much as other regulatory changes, so in any
case it is hardly surprising that the positive effects on trade are likely to be so limited. What is more surprising is how the entire
discussion around these agreements is still framed around the issues relating to trade liberalisation, when these are in fact the
less important parts of these agreements, and it is the other elements that are likely to have more negative and even devastating
effects on people living in the countries that sign up to them.
Three aspects of these agreements are particularly worrying:
the intellectual property provisions,
the restrictions on regulatory practices
the investor-state dispute settlement provisions.
Three aspects of these agreements are particularly worrying: the intellectual property provisions, the restrictions
on regulatory practices and the investor-state dispute settlement provisions.
All of these would result in significant strengthening of the bargaining power of corporations vis-ΰ-vis workers and citizens,
would reduce the power of governments to bring in policies and regulations that affect the profits or curb the power of such corporations
For example, the TPP (and the TTIP) require more stringent enforcement requirements of intellectual property rights: reducing
exemptions (e.g. allowing compulsory licensing only for emergencies); preventing parallel imports; extending IPRs to areas like life
forms, counterfeiting and piracy; extending exclusive rights to test data (e.g. in pharmaceuticals); making IPR provisions more detailed
and prescriptive. The scope of drug patents is extended to include minor changes to existing medications (a practice commonly employed
by drug companies, known as "evergreening"). Patent linkages would make it more difficult for many generic drugs to enter markets.
This would strengthen, lengthen and broaden pharmaceutical monopolies on cancer, heart disease and HIV/AIDS drugs, and in general
make even life-saving drugs more expensive and inaccessible in all the member countries. It would require further transformation
of countries' laws on patents and medical test data. It would reduce the scope of exemption in use of medical formulations through
public procurement for public purposes. All this is likely to lead to reductions in access to drugs and medical procedures because
of rising prices, and also impede innovation rather than encouraging it, across member countries.
There are also very restrictive copyright protection rules, that would also affect internet usage as Internet Service Providers
are to be forced to adhere to them. There are further restrictions on branding that would reinforce the market power of established
players.
The TPP and TTIP also contain restrictions on regulatory practices that greatly increase the power of corporations relative to
states and can even prevent states from engaging in countercyclical measures designed to boost domestic demand. It has been pointed
out by consumer groups in the USA that the powers of the Food and Drug Administration to regulate products that affect health of
citizens could be constrained and curtailed by this agreement. Similarly, macroeconomic stimulus packages that focus on boosting
domestic demand for local production would be explicitly prohibited by such agreements.
All these are matters for concern because these agreements enable corporations to litigate against governments that are perceived
to be flouting these provisions because of their own policy goals or to protect the rights of their citizens. The Investor-State
Dispute Settlement mechanism enabled by these agreements is seen to be one of their most deadly features. Such litigation is then
subject to supranational tribunals to which sovereign national courts are expected to defer, but which have no human rights safeguards
and which do not see the rights of citizen as in any way superior to the "rights" of corporations to their profits. These courts
can conduct closed and secret hearings with secret evidence. They do not just interpret the rules but contribute to them through
case law because of the relatively vague wording of the text, which can then be subject to different interpretations, and therefore
are settled by case law. The experience thus far with such tribunals has been problematic. Since they are legally based on "equal"
treatment of legal persons with no primacy for human rights, they have become known for their pro-investor bias, partly due to the
incentive structure for arbitrators, and partly because the system is designed to provide supplementary guarantees to investors,
rather than making them respect host countries laws and regulations.
If all these features of the TPP and the TTIP were more widely known, it is likely that there would be even greater public resistance
to them in the US and in other countries. Even as it is, there is growing antagonism to the trade liberalisation that is seen to
bring benefits to corporations rather than to workers, at a period in history when secure employment is seen to be the biggest prize
of all.
So if such features of US-led globalisation are indeed under threat, that is probably a good thing for the people of the US
and for people in their trading partners who had signed up for such deals.
I was watching a speech Premier Li gave at the Economic Club of NY last night, and it was interesting to see how all his (vetted,
pre-selected) questions revolved around anxieties having to do with resistance to global trade deals. Li made a few pandering
comments about how much the Chinese love American beef (stop it! you're killing me! har har) meant to diffuse those anxieties,
but it became clear that the fear among TPTB of people's dissatisfaction with the current economic is palpable. Let's keep it
up!
A federal appeals court on Tuesday threw out a $147 million civil price fixing judgment against Chinese manufacturers of
vitamin C, ruling the companies weren't liable in U.S. courts because they were acting under the direction of Chinese authorities.
The case raised thorny questions of how courts should treat foreign companies accused of violating U.S. antitrust law when
they are following mandates of a foreign government.
"I was only following orders" might not have worked in Nuremberg, but it's a-ok in international trade.
The question arises: is Trump evil? Or merely awful? If Trump is merely awful, then we are not faced with voting for the
Lesser Evil or otherwise voting Third Party in protest. If we are faced with a choice between Evil and Awful, perhaps a vote for
Awful is a vote against Evil just by itself.
Trump has already back peddaled on his TPP stance. He now says he wants to renegotiate the TTP and other trade deals. Whatever
that means. Besides, Trump is a distraction, its Mike Pence you should be keeping your eye on. He's American Taliban pure and
simple.
This is simply false. Trump has backpedaled and frontpedaled on virtually everything, but on trade, he's got Sanders-level
consistency. He's been preaching the same sanity since the 90s.
https://www.youtube.com/watch?v=GZpMJeynBeg
Hillary wants to start a war with Russia and pass the trade trifecta of TPP/TTIP/TiSA.
While I do not disagree with your comments, they must be placed in proper context: there is no substantive difference between
Mike Pence and Tim Kaine, and the people who staff the campaigns of Trump and Clinton are essentially the same. (Fundamentally
a replay of the 2000 election: Cheney/Bush vs. Lieberman/Gore.)
Trump was run to make Hillary look good, but that has turned out to be Mission Real Impossible!
We are seeing the absolute specious political theater at its worst, attempting to differentiate between Hillary Rodham Clinton
and the Trumpster the only major difference is that Clinton has far more real blood on her and Bill's hands.
Nope, there is no lesser of evils this time around . . .
Great Comment. Important to knock down the meme that "this is the most significant or important election of our time" -
this is a carbon copy of what we have seen half a dozen times since WW2 alone and that's exactly how our elite handlers want it.
Limit the choices, stoke fear, win by dividing the plebes.
Let's face it, trade without the iron fist of capitalism will benefit us schlobs greatly and not the 1%. I'm all for being
against it (TPP etc) and will vote that way.
>only 1 per cent increase in exports due to the agreement up to 2032.
At that point American's wages will have dropped near enough to Chinese levels that we can compete in selling to First World
countries . assuming there are any left.
We'd also have put in enough puppet dictators in resource rich countries that we'd be able to get raw materials cheaply.
The low labor/raw material cost will provide a significant advantage for exports but alas, our 99% won't be able to afford our
own products.
Naaah, never been about competition, since nobody is actually vetted when they offshore those jobs or replace American workers
with foreign visa workers.
But to sum it up as succinctly as possible: the TPP is about the destruction of workers' rights; the destruction of local and
small businesses; and the loss of sovereignty. Few Americans are cognizant of just how many businesses are foreign owned today
in America; their local energy utility or state energy utility, their traffic enforcement company which was privatized, their
insurance company (GEICO, etc.).
I remember when a political action group back in the '00s thought they had stumbled on a big deal when someone had hacked into
the system of the Bretton Woods Committee (the lobbyist group for the international super-rich which ONLY communicates with the
Speaker of the House and the Senate Majority Leader, and who shares the same lobbyist and D.C. office space as the Group of Thirty,
the lobbyist group for the central bankers [Larry Summers, Timothy Geithner, Mario Draghi, Ernesto Zedillo, Bill Dudley, etc.,
etc.]) and placed online their demand of the senate and the congress to kill the "Buy America" clause in the federal stimulus
program of a few years back (it was watered down greatly, and many exemptions were signed by then Commerce Secretary Gary Locke),
but such information went completely unnoticed or ignored, and of course, the TPP will completely outlaw any possibility of
a "Buy America" clause in the future!
The cynic in me wonders if under say NAFTA it would be possible for a multinational to sue for lost profits via isds if
TPP fails to pass. That the failure to enact trade "liberalizing" legislation could be construed as an active step against trade.
the way these things are so ambiguously worded, I wonder.
In June 2016, "[TransCanada] filed an arbitration claim under the North American Free Trade Agreement (NAFTA) over President
Obama's rejection of the pipeline, making good on its January threat to take legal action against the US decision.
According to the official request for arbitration, the $15 billion tab is supposed to help the company recover costs and damages
that it suffered "as a result of the US administration's breach of its NAFTA obligations." NAFTA is a comprehensive trade agreement
between the United States, Canada, and Mexico that went into effect in January 1, 1994. Under the agreement, businesses can challenge
governments over investment disputes.
In addition, the company filed a suit in US Federal Court in Houston, Texas in January asserting that the Obama Administration
exceeded the power granted by the US Constitution in denying the project."
It should be noted that the Oregon Democrats who were free traitors and supported fast track authority were called out
that day: Bonamici, Blumenauer, Schrader and Wyden. The only Oregon Ds that opposed: Sen. Merkley and Congressman DeFazio.
Obama's rhetoric May 5, 2015 at the Nike campus was all about how small businesses would prosper. Congresswoman Bonamici clings
to this rationale in her refusal to tell angry constituents at town halls whether she supports the TPP.
The Market Realist is far more realistic about Oregon's free traitors' votes.
http://marketrealist.com/2015/05/trans-pacific-partnership-affects-footwear-firms/
"US tariffs on footwear imported from Vietnam can range from 5% to 40%, according to OTEXA (Office of Textiles and Apparel). Ratification
of the TPP will likely result in lower tariffs and higher profitability for Nike."
That appeals to the other big athletic corporations that cluster in the Portland metro: Columbia Sportswear and Under Armour.
Yes, and I would add a jingoistic one as well. Manifest destiny, the Monroe doctrine, etc. are not just history lessons
but are alive and well in the neoliberal mindset. The empire must keep expanding into every nook and cranny of the world, turning
them into good consumerist slaves.
Funny how little things change over the centuries.
The West Is The Best, Subhuman Are All The Rest. The perpetual mantra of the Uebermensch since Columbus first made landfall.
Hitler merely sought to apply the same to some Europeans.
"How the West Came to Rule: The Geopolitical Origins of Capitalism", 2015, Alexander Anievas and Kerem Nisancioglu.
The Dem candidate's husband made it appallingly clear what the purpose of the TPP is: "It's to make sure the future of
the Asia-Pacific region is not dominated by China".
Would be nice if they had even a passing thought for those people in a certain North American region located in between Canada
and Mexico.
Bill Clinton doesn't even care about "the rise of China". That's just a red herring he sets up to accuse opponents of TPP
of soft-on-China treasonism. It's just fabricating a stick to beat the TPP-opponents with. Clinton's support for MFN for China
shows what he really thinks about the "rise of China".
Clinton's real motivation is the same as the TPP's real reason, to reduce America to colonial possession status of the
anti-national corporations and the Global OverClass natural persons who shelter behind and within them.
If calling the International Free Trade Conspiracy "American" is enough to get it killed and destroyed, then I don't mind having
a bunch of foreigners calling the Free Trade Conspiracy "American". Just as long as they are really against it, and can really
get Free Trade killed and destroyed.
Excellent post. Thank you. Should these so called "trade agreements" be approved, perhaps Investor-State Dispute Settlement
(ISDS arbitration) futures can be created by Wall Street and made the next speculative "Play-of-the-day" so that everyone has
a chance to participate in the looting. Btw, can you loot your own house?
Obama. Liar or stupid? When Elizabeth Warren spoke out about the secrecy of the TPP, Obama, uncharacteristically, ran to
the cameras to state that the TPP was not secret and that the charge being leveled by Warren was false. Obama's statement was
that Warren had access to a copy so how dare she say it was secret.
At the time he made that statement Warren could go to an offsite location to read the TPP in the presence of a member of the
Trade Commission, could not have staff with her, could not take notes, and could not discuss anything she read with anyone else
after she left. Or face criminal charges.
Yeah. Nothing secret about that.
Obama (and Holder) effectively immunized every financial criminal involved in the great fraud and recession without bothering
to run for a camera, and to this day has refused and avoided any elaboration on the subject, but he wasted no time trying to bury
Warren publicly. The TPP is a continuation of Obama's give-away to corporations, or more specifically, the very important men
who run them who Obama works for. And he is going to pull out all stops to deliver to the men he respects.
And add to that everything from David Dayen's book (" Chain of Title ") on Covington & Burling and Eric Holder and President
Obama, and Thomas Frank's book ("Listen, Liberals") and people will have the full picture!
It's a virtual "black market" of "money laundering" (sterilization). In foreign trade, IMPORTS decrease (-) the money stock
of the importing country (and are a subtraction to domestic gDp figures), while EXPORTS increase (+) the money stock and domestic
gDp (earnings repatriated to the U.S), and the potential money supply, of the exporting country.
So, there's a financial incentive (to maximize profits), not to repatriate foreign income (pushes up our exchange rate, currency
conversion costs, if domestic re-investment alternatives are considered more circumscribed, plus taxes, etc.).
In spite of the surfeit of $s, and E-$ credits, and unlike the days in which world-trade required a Marshall Plan jump start,
trade surpluses increasingly depend on the Asian Tiger's convertibility issues.
I don't WANT the US writing the rules of trade any longer. We know what US-written rules do: plunge worker wages into slave
labor territory, guts all advanced country's manufacturing capability, sends all high tech manufacturing to 3rd world nations
or even (potential) unfriendlies like China (who can easily put trojan spyware hard code or other vulnerabilities into critical
microchips the way WE were told the US could/would when it was leading on this tech when I was serving in the 90s). We already
know that US-written rules is simply a way for mega corporations to extend patents into the ever-more-distant future, a set of
rules that hands more control of arts over to the MPAA, rules that gut environmental laws, etc. Who needs the US-written agreements
when this is the result?
Time to toss the rules and re-write them for the greatest benefit of the greatest number of NON-wealthy and for the benefit
of the planet/ecosystems, NOT for benefit of Wall St.
"... When societies take the restraints off competition and free markets, inequality follows in its wake. It happened in the Gilded Age and it happened in the Neoliberal Era. the picture of competition leading to leveling is a jejune textbook fantasy. ..."
"To some extent that's correct, but competitive capitalism is not divisive. In fact, it is just
the opposite. Competition is a great leveling force. For example, when a firm discovers something
new, other firms, if they can, will copy it and duplicate the innovation. If a firm finds a highly
profitable strategy, other firms will mimic it and take some of those profits for themselves.
A firm might temporarily separate itself from other firms in an industry, but competition will
bring them back together. Sometimes there are impediments to this leveling process such as patents,
monopoly power, and talent that is difficult to duplicate, but competition is always there, waiting
and watching."
Nice defense of the market place with the appropriate caveat about how monopoly
power can interfere with it to the benefit of the few. We should note there is monopsony power
which at times impedes wages from rising. In such cases, unions and minimum wages can help not
hurt. Which is a shout out to Seattle for letting Uber driving unionize.
That really gets to my critique of capitalism. While Mark is certainly correct about emerging
markets, mature capitalism inevitably trends toward monopoly/oligopoly where all the benefits
disappear and we get the mess we are in today.
When societies take the restraints off competition and free markets, inequality follows in
its wake. It happened in the Gilded Age and it happened in the Neoliberal Era. the picture of
competition leading to leveling is a jejune textbook fantasy.
Societies have sometimes
succeeded in building broad prosperity and a fairly level distribution of income. They have done
it by creating strong socializing institutions and laws that place restraints on individual economic
liberty and accept the necessity of some degree of intelligent planning.
pgl ->Dan Kervick...
Yawn! Do define the "Neoliberal Era"? Is that the one where we passed anti-trust legislation or
the one where it was gutted? No scratch that - we have had enough of your bloviating for one day.
Also see Wendy Brown interview What Exactly Is Neoliberalism to Dissent Magazine (Nov 03, 2015)
== some quotes ===
"... I treat neoliberalism as a governing rationality through which everything is "economized"
and in a very specific way: human beings become market actors and nothing but, every field
of activity is seen as a market, and every entity (whether public or private, whether person,
business, or state) is governed as a firm. Importantly, this is not simply a matter of extending
commodification and monetization everywhere-that's the old Marxist depiction of capital's transformation
of everyday life. Neoliberalism construes even non-wealth generating spheres-such as learning,
dating, or exercising-in market terms, submits them to market metrics, and governs them with
market techniques and practices. Above all, it casts people as human capital who must constantly
tend to their own present and future value. ..."
"... The most common criticisms of neoliberalism, regarded solely as economic policy rather
than as the broader phenomenon of a governing rationality, are that it generates and legitimates
extreme inequalities of wealth and life conditions; that it leads to increasingly precarious
and disposable populations; that it produces an unprecedented intimacy between capital (especially
finance capital) and states, and thus permits domination of political life by capital; that
it generates crass and even unethical commercialization of things rightly protected from markets,
for example, babies, human organs, or endangered species or wilderness; that it privatizes
public goods and thus eliminates shared and egalitarian access to them; and that it subjects
states, societies, and individuals to the volatility and havoc of unregulated financial markets.
..."
"... with the neoliberal revolution that homo politicus is finally vanquished as a fundamental
feature of being human and of democracy. Democracy requires that citizens be modestly oriented
toward self-rule, not simply value enhancement, and that we understand our freedom as resting
in such self-rule, not simply in market conduct. When this dimension of being human is extinguished,
it takes with it the necessary energies, practices, and culture of democracy, as well as its
very intelligibility. ..."
"... For most Marxists, neoliberalism emerges in the 1970s in response to capitalism's falling
rate of profit; the shift of global economic gravity to OPEC, Asia, and other sites outside
the West; and the dilution of class power generated by unions, redistributive welfare states,
large and lazy corporations, and the expectations generated by educated democracies. From this
perspective, neoliberalism is simply capitalism on steroids: a state and IMF-backed consolidation
of class power aimed at releasing capital from regulatory and national constraints, and defanging
all forms of popular solidarities, especially labor. ..."
"... The grains of truth in this analysis don't get at the fundamental transformation of
social, cultural, and individual life brought about by neoliberal reason. They don't get at
the ways that public institutions and services have not merely been outsourced but thoroughly
recast as private goods for individual investment or consumption. And they don't get at the
wholesale remaking of workplaces, schools, social life, and individuals. For that story, one
has to track the dissemination of neoliberal economization through neoliberalism as a governing
form of reason, not just a power grab by capital. There are many vehicles of this dissemination
-- law, culture, and above all, the novel political-administrative form we have come to call
governance. It is through governance practices that business models and metrics come to irrigate
every crevice of society, circulating from investment banks to schools, from corporations to
universities, from public agencies to the individual. It is through the replacement of democratic
terms of law, participation, and justice with idioms of benchmarks, objectives, and buy-ins
that governance dismantles democratic life while appearing only to instill it with "best practices."
..."
"... Progressives generally disparage Citizens United for having flooded the American electoral
process with corporate money on the basis of tortured First Amendment reasoning that treats
corporations as persons. However, a careful reading of the majority decision also reveals precisely
the thoroughgoing economization of the terms and practices of democracy we have been talking
about. In the majority opinion, electoral campaigns are cast as "political marketplaces," just
as ideas are cast as freely circulating in a market where the only potential interference arises
from restrictions on producers and consumers of ideas-who may speak and who may listen or judge.
Thus, Justice Kennedy's insistence on the fundamental neoliberal principle that these marketplaces
should be unregulated paves the way for overturning a century of campaign finance law aimed
at modestly restricting the power of money in politics. Moreover, in the decision, political
speech itself is rendered as a kind of capital right, functioning largely to advance the position
of its bearer, whether that bearer is human capital, corporate capital, or finance capital.
This understanding of political speech replaces the idea of democratic political speech as
a vital (if potentially monopolizable and corruptible) medium for public deliberation and persuasion.
..."
"... My point was that democracy is really reduced to a whisper in the Euro-Atlantic nations
today. Even Alan Greenspan says that elections don't much matter much because, "thanks to globalization
. . . the world is governed by market forces," not elected representatives. ..."
Syaloch ->Dan Kervick...
I like where you're going, but your narrative here has a few problems:
"When societies take the restraints off competition and free markets, inequality follows
in its wake."
Free markets have restraints? Then they're not really "free", are they? And isn't that the
point?
"They have done it by creating strong socializing institutions and laws that place restraints
on individual economic liberty..."
I think Mark is defining economic liberty as the opposite of what you have in mind:
"The system works best when people have the freedom to enter a new business (if they have the
means and are willing to take the risk). It works best when people compete for jobs on equal footing,
have access to the same opportunities, when there are no artificial barriers in society that prevent
people from reaching their full potential."
Why not just say that strong socializing institutions and laws *increase* economic freedom?
DrDick ->Syaloch...
More to the point, "free markets" (largely unregulated) do not, have never, and cannot exist as
a viable system. Strong government regulation is essential to their viability.
Dan Kervick ->Syaloch...
Jeff Bezos had the freedom to create and enter a new business, and now he's a multi-gazillionaire
who uses his monopoly power to dictate terms. Mark Zuckerberg and the Koch brothers have used
their economic freedom to make themselves spectacularly wealthy and then move to buy control over
political processes.
The textbook picture of competition doesn't match reality. In that picture
the competitive economy is like an eternal game between equals. The players come and go, but no
one ever wins. The game goes on and on and on and on, and the conditions of the players is always
parity.
I don't know where economists came by this picture, but that's not what happens in most instances
in the real world. Generally, if you start out with a bunch of even competitors on a competitive
economic field, they will compete until one player defeats all of the others and rules the field.
Along the way, tacit coalitions will be built to gang up on the largest competitor and drive out
all of the small fry. The system tends with certainty toward oligopoly, if not always to monopoly.
The only way you can approximate enduring conditions of perfect competition is by rigging the
game with a bunch of highly restrictive rules designed to prevent human nature from taking its
course. For example, the ancient Greeks had a rule which allowed them to ostracize citizens who
had gotten too big.
I'm by no means arguing to get rid of private enterprise. But other countries have managed
to make intelligent use of restrained capitalist mechanisms within a more civilized and enlightened
social order. The United States has become an insane country: fanatically violent, aggressive,
uncivilized, nasty and anti-social. Conflict, competition and individual liberty are not effectively
balanced by moral, religious and political institutions that inhibit the vicious and narcissistic
tendencies of human beings. The popular image of the meaning of life perpetuated my the mass media
is crass and nihilistic.
Dan Kervick ->Syaloch...
"Why not just say that strong socializing institutions and laws *increase* economic freedom?"
I agree there are different kinds of freedom. Some restrictions on the economic freedom of capitalists
are enhancements of the workers' freedom not to live in fear of getting canned or impoverished.
But I really want to resist the doctrinal pressure in the US ideological system to cast everything
in the language of freedom. There are other important human valuesin addition to freedom. And
not every case in which people are given more choices makes them, or the people around them, happier.
likbez ->Syaloch...
The whole idea of "free markets" is an important neoliberal myth. Free for whom?
Only for multinationals.
The first for opening markets for multinationals under the banner of "free markets" is the cornerstone
of neoliberal ideology.
Free from what?
Free from regulation.
What about "fair markets" for a change?
ilsm ->DrDick...
US capitalism is not capitalism, it is exploitive greed and bankster plundering.
DrDick ->ilsm...
I agree with your characterization, but US capitalism is the only kind of actual capitalism that
has ever actually existed. Everywhere else has tempered its excesses with a healthy dose of socialism.
pgl ->DrDick...
19th century UK was far more laissez faire than our current set of rules. No socialism there.
Which was what Marx complained about.
DrDick ->pgl...
Which really makes my point, actually. You see the same basic patterns everywhere in the 19th
century that you do in the US today. We have only mildly reined it in compared to most of the
developed world.
"... It has been an absolute failure. Brexit has torpedoed TTIP and TPP has limited value - the largest economy in the partnership, Japan, has been largely integrated in to the US for the past 70 years. ..."
"... IMO the biggest failure of the US has been hating Russia too much. The Russians have just as much reason to be afraid of China ..."
"... It's old Cold War thinking that has seen America lose its hegemony -- similar to how the British were so focused on stopping German ascendancy they didn't see the Americans coming with the knife. ..."
The US grand strategy post-Bush was to reposition itself at the heart of a liberal economic system
excluding China through TTIP with the EU and TPP with Asia-Pac ex. China and Russia. The idea
was that this would enable the US to sustain its hegemony.
It has been an absolute failure. Brexit has torpedoed TTIP and TPP has limited value -
the largest economy in the partnership, Japan, has been largely integrated in to the US for the
past 70 years.
IMO the biggest failure of the US has been hating Russia too much. The Russians have just
as much reason to be afraid of China as the US do and have a pretty capable army.
If the US patched things up with the Russians, firstly it could redeploy forces and military
effort away from the Middle East towards Asia Pac and secondly it would give the US effective
leverage over China -- with the majority of the oil producing nations aligned with the US, China
would have difficulty in conducted a sustained conflict.
It's old Cold War thinking that has seen America lose its hegemony -- similar to how the
British were so focused on stopping German ascendancy they didn't see the Americans coming with
the knife.
"... The real problem is the Chinese do not believe in economic profits, just market rates of return on invested capital which to be honest is only about 2-5% depending on risk. ..."
No one disputes the need for more official infrastructure funding
:
What we find the most interesting is that the AIIB founders didn't ask
member countries to approve an expansion of either the World Bank or the
ADB. Instead, they opted for a new organization altogether.
Why? The problem is institutional legitimacy arising from issues of power
and governance :
-- Cecchetti & Schoenholtz
[ Why? Because when all is said and done the United States wants to be
able to control the Asian Development Bank, the IMF and World Bank and use
them to in turn "control" countries that it wishes to be subject to the
US but especially to control China as the New York Times editorial board
made clear today in supporting Japanese militarism. *
No one disputes the need for more official infrastructure funding
:
-- Cecchetti & Schoenholtz
[ Unless the word "official" suffices as an excuse, of course United
States and British policy makers in particular dispute the need for more
government supported infrastructure funding. Amartya Sen and Vijay Prashad
have made this entirely clear for India. *
The real problem is the Chinese do not believe in economic profits, just
market rates of return on invested capital which to be honest is only about
2-5% depending on risk.
Americans demand monopoly profits and ROIC so high that the price of
capital assets rapidly inflates.
Thus China's high speed rail plans are evil because China is advocating
high volumes of HSR construction that costs decline by economies of scale
leading to the replacement cost of any existing rail line being lower than
original cost so the result is capital depreciation lower the price of assets,
tangible and intangible, and the frantic pace of creating jobs and building
more capital - more rail - eliminates any monopoly power of any rail system,
thereby forcing revenues down to costs with the recovery of investment cost
stretched to decades, and ROIC forced toward zero.
And it's that policy of investing to eliminate profits that drives conservatives
insane. They scream, "it is bankrupt because those hundred year lifetime
assets are not paying for themselves and generating stock market gains in
seven years!"
Its like banking was from circa 1930 to 1980! It is like utility regulation
was from 1930 to 1980! How can wealth be created when monopoly power is
thwarted?!?
Just imagine how devastating if China uses the AIIB to build a rail network
speeding goods between China and the tip of Africa and every place in between!
Highly destructive of wealth.
Though I want to smooth the writing and terminology, I completely agree.
Again, a terrific thoroughly enlightening comment. ]
anne :
And :after failing to stop the AIIB, and refusing to participate as a
founding member, the United States should join the institution as soon as it
can, participating actively in holding it to the highest 21st century standards
:.
-- Cecchetti & Schoenholtz
[ Surely the IMF and the like are responsible for the "explosive" 38 year
growth in real per capita Gross Domestic Product and 35 year growth in total
factor productivity from Mexico, neighbor to the United States, to the Philippines,
to Kenya : ]
Total Factor Productivity at Constant National Prices for China, India, Brazil
and South Africa, 1976-2011
(Indexed to 1976)
anne -> anne :
Even supposing analysts short of an Amartya Sen wish to be judicious in actually
looking to the data of the last 38 years, as even Sen has found there is a price
for arguing about the obvious importance of soft (social welfare spending) and
hard institutional infrastructure spending in China:
Real per capita Gross Domestic Product for China and Kenya, 1976-2014
(Indexed to 1976)
anne :
And :after failing to stop the AIIB, and refusing to participate
as a founding member, the United States should join the institution as soon
as it can, participating actively in holding it to the highest 21st century
standards :.
Total Factor Productivity at Constant National Prices for China,
United States and United Kingdom, 1976-2011
(Indexed to 1976)
anne :
No one disputes the need for more official infrastructure funding :
And :after failing to stop the AIIB, and refusing to participate as a
founding member, the United States should join the institution as soon as it
can, participating actively in holding it to the highest 21st century standards
:.
Total Factor Productivity at Constant National Prices for United States, United Kingdom, France, Netherlands, Germany and China,
1976-2011
(Indexed to 1976)
anne :
No one disputes the need for more official infrastructure funding :
What we find the most interesting is that the AIIB founders didn't ask member
countries to approve an expansion of either the World Bank or the ADB. Instead,
they opted for a new organization altogether.
Why? The problem is institutional legitimacy arising from issues of power
and governance :
Total Factor Productivity at Constant National Prices for China, Korea, Hong Kong and Singapore, 1976-2011
(Indexed to 1976)
anne :
No one disputes the need for more official infrastructure funding
:
And :after failing to stop the AIIB, and refusing to participate
as a founding member, the United States should join the institution as soon
as it can, participating actively in holding it to the highest 21st century
standards :.
Total Factor Productivity at Constant National Prices for Sweden,
Denmark, Norway, Finland and China, 1976-2011
(Indexed to 1976)
anne :
No one disputes the need for more official infrastructure funding
:
And :after failing to stop the AIIB, and refusing to participate
as a founding member, the United States should join the institution as soon
as it can, participating actively in holding it to the highest 21st century
standards :.
Total Factor Productivity at Constant National Prices for Ireland,
Portugal, Spain, Italy, Greece and China, 1976-2011
(Indexed to 1976)
anne :
No one disputes the need for more official infrastructure funding
:
And :after failing to stop the AIIB, and refusing to participate
as a founding member, the United States should join the institution as soon
as it can, participating actively in holding it to the highest 21st century
standards :.
Total Factor Productivity at Constant National Prices for China, Japan
and Korea, 1976-2011
(Indexed to 1976)
kthomas :
yawn
anne :
Yawn
[ When did the United States experience 38 years of 8.6% real per capita
GDP growth yearly? How about the United Kingdom? How about any other country?
I have just begun, go ahead choose another country to go with China. I am
waiting. Go ahead. I will include the astonishing total factor productivity
growth as well. ]
anne :
While most of the G20 nations, including the big European states, Australia,
and South Korea, are among the founding members, the United States, Japan,
and Canada are noticeably not :
-- Cecchetti & Schoenholtz
[ I found it startling and discouraging that Greece virtually alone in
Europe did not apply to be a founding member of the AIIB. ]
anne :
No one disputes the need for more official infrastructure funding
:
And :after failing to stop the AIIB, and refusing to participate
as a founding member, the United States should join the institution as soon
as it can, participating actively in holding it to the highest 21st century
standards :.
Total Factor Productivity at Constant National Prices for China,
United Kingdom, Australia and Canada, 1976-2011
(Indexed to 1976)
anne -> anne :
Yawn
[ I am still waiting, choose a country to go with China. ]
anne -> anne :
No one disputes the need for more official infrastructure funding
:
And :after failing to stop the AIIB, and refusing to participate
as a founding member, the United States should join the institution as soon
as it can, participating actively in holding it to the highest 21st century
standards :.
Total Factor Productivity at Constant National Prices for Indonesia,
Philippines, Thailand and China, 1976-2011
(Indexed to 1976)
anne -> anne :
Yawn
[ Still waiting, choose a country to go with China. ]
Bruce Webb :
As to why the AIIB decided to go alone (at least without the US) it may
have something to do with a fact that I stumbled on in relation to the Greece
crisis. I am sure that most people here knew the basic fact and perhaps
appreciate the irony but I didn't know whether to weep or laugh outright.
The U.S. only controls 17% of voting powers of the IMF. Why barely a
sixth! Yet any positive decision requires an 85% vote. Meaning that in operational
terms the U.S. might as well hold 51%.
You see similar things with NATO. It's a partnership that has high officers
rotating in from here or there. But which requires that the overall NATO
Commander be an American.
Nothing undemocratic or hegemonic here! Nope! Moving right along!
anne -> Bruce Webb :
The U.S. only controls 17% of voting powers of the IMF. Why barely a
sixth! Yet any positive decision requires an 85% vote. Meaning that in operational
terms the U.S. might as well hold 51%.
You see similar things with NATO. It's a partnership that has high officers
rotating in from here or there. But which requires that the overall NATO
Commander be an American.
Nothing undemocratic or hegemonic here! Nope! Moving right along!
[ Perfect and important. ]
anne -> Bruce Webb :
I am sure that most people here knew the basic fact and perhaps appreciate
the irony but I didn't know whether to weep or laugh outright :.
[ No, in continually whining about the need for Asian Infrastructure
Investment Bank to be transparent and democratic the United States was making
sure never ever to explain the historic lack of transparency and anti-democratic
nature of the IMF and World Bank and Asian Development Bank. ]
"... Bill Clinton: "The geopolitical reasons for [TPP], from America's point of view, are pretty clear. It's designed to make sure that the future of the Asia-Pacific region, economically, is not totally dominated by China" ..."
"... " The full 40-page paper (PDF) [from the Global Development And Environment Institute at Tufts University] goes into the details [of projected economic gains from trade deals]. Along the way, it provides a highly critical analysis of the underlying econometric model used for almost all of the official studies of CETA, TPP and TTIP - the so-called "computable general equilibrium" (CGE) approach. In particular, the authors find that using the CGE model to analyze a potential trade deal effectively guarantees that there will be a positive outcome ("net welfare gains") because of its unrealistic assumptions" [ TechDirt ]. ..."
Bill Clinton: "The geopolitical reasons for [TPP], from America's point of view, are pretty
clear. It's designed to make sure that the future of the Asia-Pacific region, economically, is not
totally dominated by China" [
CNBC ].
"However, he stopped short [by about an inch, right?] of supporting the TPP. He added that his
wife [who is running for President' has said provisions on currency manipulation must be enforced
and measures put in place in the United States to address any labor market dislocations that result
from trade deals." Oh. "Provisions enforced" sounds like executive authority, to me. And "measures
put in place" sounds like a side deal. In other words, Bill Clinton just floated Hillary's trial
balloon for passing TPP, if Obama can't get it done in the lame duck. Of course, if you parsed her
words, you knew she wasn't lying , exactly .
" The full 40-page
paper (PDF) [from the Global Development And Environment Institute at Tufts University] goes
into the details [of projected economic gains from trade deals]. Along the way, it provides a highly
critical analysis of the underlying econometric model used for almost all of the official studies
of CETA, TPP and TTIP - the so-called "computable general equilibrium" (CGE) approach. In particular,
the authors find that using the CGE model to analyze a potential trade deal effectively guarantees
that there will be a positive outcome ("net welfare gains") because of its unrealistic assumptions"
[
TechDirt ].
"Conservative lawmakers looking for a way to buck Donald Trump's populist message on trade may
have gotten a little more cover with more than 30 conservative and libertarian groups sending a letter
today to Congress expressing strong support for free trade" [
Politico ]. National
Taxpayers Union, Club for Growth, FreedomWorks
"France is set to arrive at the meeting with a proposal to suspend TTIP negotiations, our Pro
Trade colleagues in Brussels report. But for the deal's supporters, there's hop'e: 'France will not
win the day,' Alberto Mucci, Christian Oliver and Hans von der Burchard write. 'Britain [???], Italy,
Spain, Poland, the Nordic countries and the Baltics will thwart any attempt to end the Transatlantic
Trade and Investment Partnership in Bratislava'" [
Politico ].
"... Expressing his overall objections to the TPP, Stiglitz said "corporate interests... were at the table" when it was being crafted. He also condemned "the provisions on intellectual property that will drive up drug prices" and "the 'investment provisions' which will make it more difficult to regulate and actually harm trade." ..."
"... The Democratic candidate, for her part, supported the deal before coming out against it , but for TPP foes, uncertainty about her position remains, especially since she recently named former Colorado Senator and Interior Secretary-and " vehement advocate for the TPP "-Ken Salazar to be chair of her presidential transition team. ..."
"... Rep. Debbie Dingell (D-Mich.) said , "We have to make sure that bill never sees the light of day after this election," while Rep. Alan Grayson (D-Fla.) said at the American Postal Workers Union convention in Walt Disney World, "If this goes through, it's curtains for the middle class in this country." ..."
Nobel Prize-winning economist Joseph Stiglitz has reiterated his opposition
to the Trans Pacific
Partnership (TPP), saying on Tuesday that President Barack Obama's push
to get the trade deal passed during the upcoming lame-duck session of Congress
is "outrageous" and "absolutely wrong."
Stiglitz, an economics professor at
Columbia University and chief economist of the Roosevelt Institute,
made the comments on CNN's "Quest Means Business."
His criticism comes as Obama aggressively
campaigns to get lawmakers to pass the TPP in the Nov. 9 to Jan. 3 window-even
as
resistance mounts against the 12-nation deal.
Echoing an
argument made by Center for Economic
and Policy Research co-director Mark Weisbrot, Stiglitz said, "At the lame-duck
session you have congressmen voting who know that they're not accountable anymore."
Lawmakers "who are not politically accountable because they're leaving may,
in response to promises of jobs or just subtle understandings, do things that
are not in the national interest," he said.
Expressing his overall objections to the TPP, Stiglitz said "corporate
interests... were at the table" when it was being crafted. He also condemned
"the provisions on intellectual property that will drive up drug prices" and
"the 'investment provisions' which will make it more difficult to regulate and
actually harm trade."
"The advocates of trade said it was going to benefit everyone,"
he added. "The evidence is it's benefited a few and left a lot behind."
Stiglitz has also been advising the
Hillary
Clinton presidential campaign. The Democratic candidate, for her part,
supported the deal before coming out
against it, but for TPP foes, uncertainty about her position remains, especially
since she recently
named former Colorado Senator and Interior Secretary-and "vehement
advocate for the TPP"-Ken Salazar to be chair of her presidential transition
team.
Opposition to the TPP also appeared Tuesday in Michigan and Florida, where
union members and lawmakers criticized what they foresee as the deal's impacts
on working families.
Rep. Debbie Dingell (D-Mich.)
said, "We have to make sure that bill never sees the light of day after
this election," while Rep. Alan Grayson (D-Fla.)
said at the American Postal Workers Union convention in Walt Disney World,
"If this goes through, it's curtains for the middle class in this country."
We cannot allow this agreement to forsake the American middle class, while foreign governments
are allowed to devalue their currency and artificially prop-up their industries.
The Trans-Pacific Partnership trade deal is a bad deal for the American people. This historically
massive trade deal -- accounting for 40 percent of global trade -- would reduce restrictions on foreign
corporations operating within the U.S., limit our ability to protect our environment, and create
more incentives for U.S. businesses to outsource investments and jobs overseas to countries with
lower labor costs and standards.
Over and over we hear from TPP proponents how the TPP will boost our economy, help American workers,
and set the standards for global trade. The International Trade Commission report released last May
(https://www.usitc.gov/publications/332/pub4607.pdf)
confirms that the opposite is true. In exchange for just 0.15 percent boost in GDP by 2032, the TPP
would decimate American manufacturing capacity, increase our trade deficit, ship American jobs overseas,
and result in losses to 16 of the 25 U.S. economic sectors. These estimates don't even account for
the damaging effects of currency manipulation, environmental impacts, and the agreement's deeply
flawed Investor State Dispute Settlement (ISDS) process.
There's no reason to believe the provisions of this deal relating to labor standards, preserving
American jobs, or protecting our environment, will be enforceable. Every trade agreement negotiated
in the past claimed to have strong enforceable provisions to protect American jobs -- yet no such
enforcement has occurred, and agreements like the North American Free Trade Agreement (NAFTA) have
resulted in the loss of hundreds of thousands of American jobs. Former Secretary of Labor Robert
Reich has called TPP "NAFTA on steroids." The loss of U.S. jobs under the TPP would likely be unprecedented.
"... Existing "trade" agreements like NAFTA allow corporations to sue governments for passing laws and regulations that limit their profits. They set up special " corporate courts " in which corporate attorneys decide the cases. These corporate "super courts" sit above governments and their own court systems, and countries and their citizens cannot even appeal the rulings. ..."
"... Now, corporations are pushing two new "trade" agreements - one covering Pacific-are countries and one covering Atlantic-area countries - that expand these corporate rights and move governments out of their way. The Pacific agreement is called the Trans-Pacific Partnership (TPP) and the Atlantic one is called the Trans-Atlantic Trade and Investment Partnership (TTIP). ..."
"... International corporations that want to intimidate countries have access to a private legal system designed just for them. And to unlock its power, sometimes all it takes is a threat. ..."
"... ISDS is so tilted and unpredictable, and the fines the arbitrators can impose are so catastrophically large, that bowing to a company's demands, however extreme they may be, can look like the prudent choice. ..."
BuzzFeed is running a very important investigative series called
"Secrets
of a Global Super Court." It describes what they call "a parallel legal
universe, open only to corporations and largely invisible to everyone else."
Existing "trade" agreements like NAFTA allow corporations to sue governments
for passing laws and regulations that limit their profits. They set up special
"corporate
courts" in which corporate attorneys decide the cases. These corporate "super
courts" sit above governments and their own court systems, and countries
and their citizens cannot even appeal the rulings.
Picture a poor "banana republic" country ruled by a dictator and his
cronies. A company might want to invest in a factory or railroad - things
that would help the people of that country as well as deliver a return to
the company. But the company worries that the dictator might decide to just
seize the factory and give it to his brother-in-law. Agreements to protect
investors, and allowing a tribunal not based in such countries (courts where
the judges are cronies of the dictator), make sense in such situations.
Here's the thing: Corporate investors see themselves as legitimate "makers"
and see citizens and voters and their governments - always demanding taxes and
fair pay and public safety - to be illegitimate "takers." Corporations are all
about "one-dollar-one-vote" top-down systems of governance. They consider "one-person-one-vote"
democracy to be an illegitimate, non-functional system that meddles with their
more-important profit interests. They consider any governmental legal or regulatory
system to be "burdensome." They consider taxes as "theft" of the money they
have "earned."
To them, any government anywhere is just another "banana republic"
from which they need special protection.
"Trade" Deals Bypass Borders
Investors and their corporations have set up a way to get around the borders
of these meddling governments, called "trade" deals. The trade deals elevate
global corporate interests above any national interest. When a country signs
a "trade" deal, that country is agreeing not to do things that protect the country's
own national interest - like impose tariffs to protect key industries or national
strategies, or pass laws and regulations - when those things interfere with
the larger, more important global corporate "trade" interests.
Now, corporations are pushing two new "trade" agreements - one covering
Pacific-are countries and one covering Atlantic-area countries - that expand
these corporate rights and move governments out of their way. The Pacific agreement
is called the Trans-Pacific Partnership (TPP) and the Atlantic one is called
the Trans-Atlantic Trade and Investment Partnership (TTIP).
Secrets of a Global Super Court
BuzzFeed's series on these corporate courts,
"Secrets
of a Global Super Court," explains the investor-state dispute settlement
(ISDS) provisions in the "trade" deals that have come to dominate the world
economy. These provisions set up "corporate
courts" that place corporate profits above the interests of governments
and set up a court system that sits above the court systems of the countries
in the "trade" deals.
In a little-noticed 2014 dissent, US Chief Justice John Roberts warned
that ISDS arbitration panels hold the alarming power to review a nation's
laws and "effectively annul the authoritative acts of its legislature, executive,
and judiciary." ISDS arbitrators, he continued, "can meet literally anywhere
in the world" and "sit in judgment" on a nation's "sovereign acts."
[. . .]
Reviewing publicly available information for about 300 claims filed during
the past five years, BuzzFeed News found more than 35 cases in which the
company or executive seeking protection in ISDS was accused of criminal
activity, including money laundering, embezzlement, stock manipulation,
bribery, war profiteering, and fraud.
Among them: a bank in Cyprus that the US government accused of
financing terrorism and organized crime, an oil company executive accused
of embezzling millions from the impoverished African nation of Burundi,
and the Russian oligarch known as "the
Kremlin's banker."
One lawyer who regularly represents governments said he's seen evidence
of corporate criminality that he "couldn't believe." Speaking on the condition
that he not be named because he's currently handling ISDS cases, he said,
"You have a lot of scuzzy sort-of thieves for whom this is a way to hit
the jackpot."
Part Two,
"The Billion-Dollar Ultimatum," looks at how "International corporations
that want to intimidate countries have access to a private legal system designed
just for them. And to unlock its power, sometimes all it takes is a threat."
Of all the ways in which ISDS is used, the most deeply hidden are the
threats, uttered in private meetings or ominous letters, that invoke those
courts. The threats are so powerful they often eliminate the need to actually
bring a lawsuit. Just the knowledge that it could happen is enough.
[. . .] ISDS is so tilted and unpredictable, and the fines the arbitrators
can impose are so catastrophically large, that bowing to a company's demands,
however extreme they may be, can look like the prudent choice. Especially
for nations struggling to emerge from corrupt dictatorships or to lift their
people from decades of poverty, the mere threat of an ISDS claim triggers
alarm. A single decision by a panel of three unaccountable, private lawyers,
meeting in a conference room on some other continent, could gut national
budgets and shake economies to the core.
Indeed, financiers and ISDS lawyers have created a whole new business:
prowling for ways to sue nations in ISDS and make their taxpayers fork over
huge sums, sometimes in retribution for enforcing basic laws or regulations.
The financial industry is pushing novel ISDS claims that countries
never could have anticipated - claims that, in some instances,
would be barred in US courts and those of other developed nations, or
that strike at emergency decisions nations make to cope with crises.
ISDS gives particular leverage to traders and speculators who chase
outsize profits in the developing world. They can buy into local disputes
that they have no connection to, then turn the disputes into costly international
showdowns. Standard Chartered, for example, bought the debt of a Tanzanian
company that was in dire financial straits and racked by scandal; now, the
bank has filed an ISDS claim demanding that the nation's taxpayers hand
over the full amount that the private company owed - more than $100 million.
Asked to comment, Standard Chartered said its claim is "valid."
But instead of helping companies resolve legitimate disputes over seized
assets, ISDS has increasingly become a way for rich investors to make money
by speculating on lawsuits, winning huge awards and forcing taxpayers to
foot the bill.
Here's how it works: Wealthy financiers with idle cash have purchased
companies that are well placed to bring an ISDS claim, seemingly for the
sole purpose of using that claim to make a buck. Sometimes, they set up
shell corporations to create the plaintiffs to bring ISDS cases.
And some hedge funds and private equity firms bankroll ISDS cases as third
parties - just like billionaire Peter Thiel bankrolled Hulk Hogan in his
lawsuit against Gawker Media.
The Progressive Change Campaign Committee (PCCC) released this statement
on the ISDS provisions in TPP:
"Under the Trans-Pacific Partnership, Wall Street would be allowed to
sue the government in extrajudicial, corporate-run tribunals over any regulation
and American taxpayers would be on the hook for damages. This is an outrage.
We need more accountability and fairness in our economy not less. And
we need to preserve our ability to make our own rules.
"It's time for Obama to take notice of the widespread, bipartisan opposition
to the TPP and take this agreement off the table before he causes lasting
political harm to Democrats with voters."
"... "No TPP - a certainty in case Donald Trump is elected in November - means the end of US economic hegemony over Asia. Hillary Clinton knows it; and it's no accident President Obama is desperate to have TPP approved during a short window of opportunity, the lame-duck session of Congress from November 9 to January 3." ..."
"... To me, the key to our economic hegemony lies in our reserve currency hegemony. They will have to continue to supply us to get the currency. Unless we have injected too much already (no scholars have come forth to say how much trade deficits are necessary for the reserve currency to function as the reserve currency, and so, we have just kept buying and I am wondering if we have bought too much and there is a need to starting running trade surpluses to soak up the excess money just asking, I don't know the answer). ..."
A response to Hillary Clinton's America Exceptionalist Speech:
1. America Exceptionalist vs. the World..
2. Brezinski is extremely dejected.
3. Russia-China on the march.
4. "There will be blood. Hillary Clinton smells it already ."
"No TPP - a certainty in case Donald Trump is elected in November
- means the end of US economic hegemony over Asia. Hillary Clinton knows
it; and it's no accident President Obama is desperate to have TPP approved
during a short window of opportunity, the lame-duck session of Congress
from November 9 to January 3."
To me, the key to our economic hegemony lies in our reserve currency
hegemony. They will have to continue to supply us to get the currency. Unless
we have injected too much already (no scholars have come forth to say how
much trade deficits are necessary for the reserve currency to function as
the reserve currency, and so, we have just kept buying and I am wondering
if we have bought too much and there is a need to starting running trade
surpluses to soak up the excess money just asking, I don't know the answer).
Regarding the push to pass the TPP and TISA I've been needing to get
this off my chest and this seems to be as good a time as any:
In the face of public opposition to the TPP and TISA proponents have
trotted out a new argument: "we have come too far", "our national credibility
would be damaged if we stop now." The premise of which is that negotiations
have been going on so long, and have involved such effort that if the
U.S. were to back away now we would look bad and would lose significant
political capital.
On one level this argument is true. The negotiations have been long,
and many promises were made by the negotiators to secure to to this
point. Stepping back now would expose those promises as false and would
make that decade of effort a loss. It would also expose the politicians
who pushed for it in the face of public oppoosition to further loss
of status and to further opposition.
However, all of that is voided by one simple fact. The negotiations
were secret. All of that effort, all of the horse trading and the promise
making was done by a self-selected body of elites, for that same body,
and was hidden behind a wall of secrecy stronger than that afforded
to new weapons. The deals were hidden not just from the general public,
not from trade unions or environmental groups, but from the U.S. Congress
itself.
Therefore it has no public legitimacy. The promises made are not
"our" promises but Michael Froman's promises. They are not backed by
the full faith and credit of the U.S. government but only by the words
of a small body of appointees and the multinational corporations that
they serve. The corporations were invited to the table, Congress was
not.
What "elites" really mean when they say "America's credibility is
on the line" is that their credibility is on the line. If these deals
fail what will be lost is not America's stature but the premise that
a handful of appointees can cut deals in private and that the rest of
us will make good.
When that minor loss is laid against the far greater fact that the
terms of these deals are bad, that prior deals of this type have harmed
our real economies, and that the rules will further erode our national
sovreignity, there is no contest.
Michael Froman's reputation has no value. Our sovreignity, our economy,
our nation, does.
"What "elites" really mean when they say "America's credibility is on
the line" is that their credibility is on the line. If these deals fail
what will be lost is not America's stature but the premise that a handful
of appointees can cut deals in private and that the rest of us will make
good."
Yes! And the victory will taste so sweet when we bury this filthy, rotten,
piece of garbage. Obama's years of effort down the drain, his legacy tarnished
and unfinished.
I want TPP's defeat to send a clear message that the elites can't count
on their politicians to deliver for them. Let's make this thing their Stalingrad!
Leave deep scars so that they give up on TISA and stop trying to concoct
these absurd schemes like ISDS.
sorry but i don't see it that way at all. 'they' got a propaganda machine
to beat all 'they' make n break reps all the time. i do see a desperation
on a monetary/profit scale. widening the 'playing field' offers more profits
with less risk. for instance, our Pharams won't have to slash their prices
at the risk of sunshine laws, wish-washy politicians, competition, nor a
pissed off public. jmo tho')
LOL "America's credibility" LOL, these people need to get out more. In
the 60's you could hike high up into the Andes and the sheep herder had
two pics on the wall of his hut: Jesus and JFK. America retains its cachet
as a place to make money and be entertained, but as some kind of beacon
of morality and fair play in the world? Dead, buried, and long gone, the
hype-fest of slogans and taglines can only cover up so many massive, atrocious
and hypocritical actions and serial offenses.
Clinton Inc was mostly Bill helping Epstein get laid until after Kerry
lost. If this was the reelection of John Edwards, Kerry's running mate,
and a referendum on 12 years of Kerronomics, Bill and Hill would be opening
night speakers at the DNC and answers to trivia questions.
My guess is Obama is dropped swiftly and unceremoniously especially since
he doesn't have much of a presence in Washington.
"It looks as if we'll be firing Tomahawk cruise missiles at Syria in
the coming days, and critics are raising legitimate concerns:"
"Yet there is value in bolstering international norms against egregious
behavior like genocide or the use of chemical weapons. Since President Obama
established a "red line" about chemical weapons use, his credibility has
been at stake: he can't just whimper and back down."
Obama did back down.
NIcholas Kristof, vigilant protector of American credibility through
bombing Syria.
Ah yes the credibility of our ιlites. With their sterling record on Nafta's
benefits, Iraq's liberation, Greece's rebound, the IMF's rehabilitation
of countries
We must pass TPP or Tom Friedman will lose credibility, what?
"... pro-TPPers "consciously seek to weaken the national defense," that's exactly what's going on. Neoliberalism, through offshoring, weakens the national defense, because it puts our weaponry at the mercy of fragile and corruptible supply chains. ..."
"... Now, when we think about how corrupt the political class has become, it's not hard to see why Obama is confident that he will win. ..."
"... I think raising the ante rhetorically by framing a pro-TPP vote as treason could help sway a close vote; and if readers try that frame out, I'd like to hear the results ..."
There are two reasons: First, they consciously seek to weaken the national
defense. And second, the Investor-State Dispute Settlement (ISDS) system is
a
surrender of national sovereignty .
National Defense
This might be labeled the "Ghost Fleet" argument, since we're informed that
Paul Singer and Augustus Cole's techno-thriller has really caught the attention
of the national security class below the political appointee level, and that
this is a death blow for neoliberalism. Why? "The multi-billion dollar, next
generation F-35 aircraft, for instance, is rendered powerless after it is revealed
that Chinese microprocessor manufacturers had implanted malicious code into
products intended for the jet" (
Foreign Policy ). Clearly, we need, well, industrial policy, and we need
to bring a lot of manufacturing home.
From Brigadier General (Retired) John Adams :
In 2013, the Pentagon's Defense Science Board put forward a remarkable
report describing one of the most significant but little-recognized threats
to US security: deindustrialization. The report argued that the loss of
domestic U.S. manufacturing facilities has not only reduced U.S. living
standards but also compromised U.S. technology leadership "by enabling new
players to learn a technology and then gain the capability to improve on
it." The report explained that the offshoring of U.S. manufacturing presents
a particularly dangerous threat to U.S. military readiness through the "compromise
of the supply chain for key weapons systems components."
Our military is now shockingly vulnerable to major disruptions in the
supply chain, including from substandard manufacturing practices, natural
disasters, and price gouging by foreign nations. Poor manufacturing practices
in offshore factories lead to problem-plagued products, and foreign producers-acting
on the basis of their own military or economic interests-can sharply raise
prices or reduce or stop sales to the United States.
The link between TPP and this kind of offshoring has been well-established.
And, one might say, the link between neo-liberal economic policy "and this
kind of offshoring has been well-established" as well.
So, when I framed the issue as one where pro-TPPers "consciously seek
to weaken the national defense," that's exactly what's going on. Neoliberalism,
through offshoring, weakens the national defense, because it puts our weaponry
at the mercy of fragile and corruptible supply chains. Note that re-industrializing
America has positive appeal, too: For the right, on national security grounds;
and for the left, on labor's behalf (and maybe helping out the Rust Belt that
neoliberal policies of the last forty years did so much to destroy. Of course,
this framing would make Clinton a traitor, but you can't make an omelette without
breaking eggs. (Probably best to to let the right, in its refreshingly direct
fashion, use the actual "traitor" word, and the left, shocked, call for the
restoration of civility, using verbiage like "No, I wouldn't say she's a traitor.
She's certainly 'extremely careless' with our nation's security.")
ISDS
The Investor-State Dispute Settlement system is a hot mess (unless you represent
a corporation, or are one of tiny fraternity of international corporate lawyers
who can plead and/or judge ISDS cases).
Yves wrote :
What may have torched the latest Administration salvo is a well-timed
joint publication by Wikileaks and the New York Times of a recent version
of the so-called investment chapter. That section sets forth one of the
worst features of the agreement, the investor-state dispute settlement process
(ISDS). As we've described at length in earlier posts, the ISDS mechanism
strengthens the existing ISDS process. It allows for secret arbitration
panels to effectively overrule national regulations by allowing foreign
investors to sue governments over lost potential future profits in secret
arbitration panels. Those panels have been proved to be conflict-ridden
and arbitrary. And the grounds for appeal are limited and technical.
Here again we have a frame that appeals to both right and left. The very
thought of surrendering national sovereignty to an international organization
makes any good conservative's back teeth itch. And the left sees the "lost profits"
doctrine as a club to prevent future government programs they would like to
put in place (single payer, for example). And in both cases, the neoliberal
doctrine of putting markets before anything else makes pro-TPP-ers traitors.
To the right, because nationalism trumps internationalism; to the left, because
TPP prevents the State from looiking after the welfare of its people.
The Political State of Play
All I know is what I read in the papers, so what follows can only be speculation.
That said, there are two ways TPP could be passed: In the lame duck session,
by Obama, or after a new President is inaugurated, by Clinton (or possibly by
Trump[1]).
[OBAMA:] And hopefully, after the election is over and the dust settles,
there will be more attention to the actual facts behind the deal and it
won't just be a political symbol or a political football. And I will actually
sit down with people on both sides, on the right and on the left. I'll sit
down publicly with them and we'll go through the whole provisions. I would
enjoy that, because there's a lot of misinformation.
I'm really confident I can make the case this is good for American workers
and the American people. And people said we weren't going to be able to
get the trade authority to even present this before Congress, and somehow
we muddled through and got it done. And I intend to do the same with respect
to the actual agreement.
So it is looking like a very close vote. (For procedural and political
reasons, Obama will not bring it to a vote unless he is sure he has the
necessary votes). Now let's look at one special group of Representatives
who can swing this vote: the actual lame-ducks, i.e., those who will be
in office only until Jan. 3. It depends partly on how many lose their election
on Nov. 8, but the average number of representatives who left after the
last three elections was about 80.
Most of these people will be looking for a job, preferably one that can
pay them more than $1 million a year. From the data provided by OpenSecrets.org,
we can estimate that about a quarter of these people will become lobbyists.
(An additional number will work for firms that are clients of lobbyists).
So there you have it: It is all about corruption, and this is about as
unadulterated as corruption gets in our hallowed democracy, other than literal
cash under a literal table. These are the people whom Obama needs to pass
this agreement, and the window between Nov. 9 and Jan. 3 is the only time
that they are available to sell their votes to future employers without
any personal political consequences whatsoever. The only time that the electorate
can be rendered so completely irrelevant, if Obama can pull this off.
(The article doesn't talk about the Senate, but Fast Track passed the Senate
with a filibuster-proof super-majority, so the battle is in the House anyhow.
And although the text of TPP cannot be amended - that's what fast track means!
- there are still ways to affect the interpretation and enforcement of the text,
so Obama and his corporate allies have bargaining chips beyond Beltway sinecures.[2])
Now, when we think about how corrupt the political class has become,
it's not hard to see why Obama is confident that he will win. (
Remember , "[T]he preferences of economic elites have far more independent
impact upon policy change than the preferences of average citizens do.") However,
if the anti-TPP-ers raise the rhetorical stakes from policy disagreement to
treason, maybe a few of those 80 representatives will do the right thing (or,
if you prefer, decide that the reputational damage to their future career makes
a pro-TPP vote not worth it. Who wants to play golf with a traitor?)
Passing TPP after the Inaugural
After the coronation inaugural, Clinton will have to use more
complicated tactics than dangling goodies before the snouts of representatives
leaving for K Street. (We've seen that Clinton's putative opposition to TPP
is based on lawyerly parsing; and her base supports it. So I assume a Clinton
administration would go full speed ahead with it.) My own thought has been that
she'd set up a "conversation" on trade, and then buy off the national unions
with "jobs for the boys," so that they sell their locals down the river. Conservative
Jennifer Rubin has a better proposal , which meets Clinton's supposed criterion
of not hurting workers even better:
Depending on the election results and how many pro-free-trade Republicans
lose, it still might not be sufficient. Here's a further suggestion: Couple
it with a substantial infrastructure project that Clinton wants, but with
substantial safeguards to make sure that the money is wisely spent. Clinton
gets a big jobs bill - popular with both sides - and a revised TPP gets
through.
What Clinton needs is a significant revision to TPP that she can tout
as a real reform to trade agreements, one that satisfies some of the TPP's
critics on the left. A minor tweak is unlikely to assuage anyone; this change
needs to be a major one. Fortunately, there is a TPP provision that fits
the bill perfectly: investor state dispute settlement (ISDS), the procedure
that allows foreign investors to sue governments in an international tribunal.
Removing ISDS could triangulate the TPP debate, allowing for enough support
to get it through Congress.
Obama can't have a conversation on trade, or propose a jobs program, let
alone jettison ISDS; all he's got going for him is corruption.[3] So, interestingly,
although Clinton can't take the simple road of bribing the 80 represenatives,
she does have more to bargain with on policy. Rubin's jobs bill could at least
be framed as a riposte to the "Ghost Fleet" argument, since both are about "jawbs,"
even if infrastructure programs and reindustrialization aren't identical in
intent. And while I don't think Clinton would allow ISDS to be removed (
her corporate donors love it ), at least somebody's thinking about how to
pander to the left. Nevertheless, what does a jobs program matter if the new
jobs leave the country anyhow? And suppose ISDS is removed, but the removal
of the precautionary principle remains? We'd still get corporate-friendly decisions,
bilaterally. And people would end up balancing the inevitable Clinton complexity
and mush against the simplicity of the message that a vote for TPP is a vote
against the United States.
Conclusion
I hope I've persuaded you that TPP is still very much alive, and that both
Obama in the lame duck, and Clinton (or even Trump) when inaugurated have reasonable
hopes of passing it. However, I think raising the ante rhetorically by framing
a pro-TPP vote as treason could help sway a close vote; and if readers try that
frame out, I'd like to hear the results (especially when the result comes
from a letter to your Congress critter). Interestingly, Buzzfeed just published
tonight the first in a four-part series, devoted to the idea that ISDS is what
we have said it is all along: A surrender of national sovereignty.
Here's
a great slab of it :
Imagine a private, global super court that empowers corporations to bend
countries to their will.
Say a nation tries to prosecute a corrupt CEO or ban dangerous pollution.
Imagine that a company could turn to this super court and sue the whole
country for daring to interfere with its profits, demanding hundreds of
millions or even billions of dollars as retribution.
Imagine that this court is so powerful that nations often must heed its
rulings as if they came from their own supreme courts, with no meaningful
way to appeal. That it operates unconstrained by precedent or any significant
public oversight, often keeping its proceedings and sometimes even its decisions
secret. That the people who decide its cases are largely elite Western corporate
attorneys who have a vested interest in expanding the court's authority
because they profit from it directly, arguing cases one day and then sitting
in judgment another. That some of them half-jokingly refer to themselves
as "The Club" or "The Mafia."
And imagine that the penalties this court has imposed have been so crushing
- and its decisions so unpredictable - that some nations dare not risk a
trial, responding to the mere threat of a lawsuit by offering vast concessions,
such as rolling back their own laws or even wiping away the punishments
of convicted criminals.
This system is already in place, operating behind closed doors in office
buildings and conference rooms in cities around the world. Known as investor-state
dispute settlement, or ISDS, it is written into a vast network of treaties
that govern international trade and investment, including NAFTA and the
Trans-Pacific Partnership, which Congress must soon decide whether to ratify.
That's the stuff to give the troops!
NOTE
[1] Trump:
"I pledge to never sign any trade agreement that hurts our workers." Lotta
wiggle room there, and the lawyerly parsing is just like Clinton's. I don't
think it's useful to discuss what Trump might do on TPP, because until there
are other parties to the deal, there's no deal to be had. Right now, we're just
looking at
Trump doing A-B testing - not that there's anything wrong with that - which
the press confuses with policy proposals. So I'm not considering Trump because
I don't think we have any data to go on.
To pacify [those to whom he will corrupt appeal], Obama will
have to convince them that what they want will anyway be achieved, even
if these are not legally part of the TPP because the TPP text cannot be
amended.
He can try to achieve this through bilateral side agreements on specific
issues. Or he can insist that some countries take on extra obligations beyond
what is required by the TPP as a condition for obtaining a U.S. certification
that they have fulfilled their TPP obligations.
This certification is required for the U.S. to provide the TPP's benefits
to its partners, and the U.S. has previously made use of this process to
get countries to take on additional obligations, which can then be shown
to Congress members that their objectives have been met.
In other words, side deals.
[3] This should not be taken to imply that Clinton does not have corruption
going for her, too. She can also make all the side deals Obama can.
"... One of the main concerns with TTIP is that it could allow multinational corporations to effectively "sue" governments for taking actions that might damage their businesses. Critics claim American companies might be able to avoid having to meet various EU health, safety and environment regulations by challenging them in a quasi-court set up to resolve disputes between investors and states. ..."
"... These developments take place against the background of another major free trade agreement - the Trans Pacific Partnership ( TPP ) - hitting snags on the way to being pushed through Congress. ..."
"... "US Faces Major Setback" Well, actually, US corporations face a major setback. Average US citizens face a reprieve. ..."
TTIP negotiations have been ongoing since 2013 in an effort to establish a massive
free trade zone that would eliminate many tariffs. After 14 rounds of talks
that have lasted three years not a single common item out of
the 27 chapters being discussed has been agreed on. The United States has
refused to agree on an equal playing field between European and American companies
in the sphere of public procurement sticking to the principle of "buy American".
The opponents of the deal believe that in its current guise the TTIP is too
friendly to US businesses. One of the main concerns with TTIP is that it
could allow multinational corporations to effectively "sue" governments for
taking actions that might damage their businesses. Critics claim American companies
might be able to avoid having to meet various EU health, safety and environment
regulations by challenging them in a quasi-court set up to resolve disputes
between investors and states.
In Europe thousands of people supported by society groups, trade unions and
activists take to the streets expressing protest against the deal. Three million
people have signed a petition calling for it to be scrapped. For instance, various
trade unions and other groups have called for protests against the TTIP across
Germany to take place on September 17. A trade agreement with Canada has also
come under attack.
These developments take place against the background of another major
free trade agreement - the Trans Pacific Partnership (TPP)
- hitting snags on the way to being pushed through Congress. The chances
are really slim.
silverer Sep 5, 2016 9:51 AM
"US Faces Major Setback" Well, actually, US corporations face a major
setback. Average US citizens face a reprieve.
"... Speaking to a local radio station before the joint rally, Farage urged Americans to "go out and fight" against Hillary Clinton. ..."
"... "I am going to say to people in this country that the circumstances, the similarities, the parallels between the people who voted Brexit and the people who could beat Clinton in a few weeks time here in America are uncanny," Farage told Super Talk Mississippi. "If they want things to change they have get up out of their chairs and go out and fight for it. It can happen. We've just proved it." ..."
"... It's not for me as a foreign politician to say who you should vote for ... All I will say is that if you vote for Hillary Clinton, then nothing will change. She represents the very politics that we've just broken through the Brexit vote in the United Kingdom. ..."
...the British politician, who was invited by Mississippi governor Phil Bryant, will draw parallels
between what he sees as the inspirational story of Brexit and Trump's campaign. Farage will describe
the Republican's campaign as a similar crusade by grassroots activists against "big banks and global
political insiders" and how those who feel disaffected and disenfranchised can become involved in
populist, rightwing politics. With Trump lagging in the polls, just as Brexit did prior to the vote
on the referendum, Farage will also hearten supporters by insisting that they can prove pundits and
oddsmakers wrong as well.
This message resonates with the Trump campaign's efforts to reach out to blue collar voters who
have become disillusioned with American politics, while also adding a unique flair to Trump's never
staid campaign rallies.
The event will mark the first meeting between Farage and Trump.
Arron Banks, the businessman who backed Leave.EU, the Brexit campaign group associated with the
UK Independence party (Ukip), tweeted that he would be meeting Trump over dinner and was looking
forward to Farage's speech.
The appointment last week of Stephen Bannon, former chairman of the Breitbart website, as
"CEO" of Trump's campaign has seen the example of the Brexit vote, which Breitbart enthusiastically
advocated, rise to the fore in Trump's campaign narrative.
Speaking to a local radio station before the joint rally, Farage urged Americans to "go out
and fight" against Hillary Clinton.
"I am going to say to people in this country that the circumstances, the similarities, the
parallels between the people who voted Brexit and the people who could beat Clinton in a few weeks
time here in America are uncanny," Farage told Super Talk Mississippi. "If they want things to change
they have get up out of their chairs and go out and fight for it. It can happen. We've just proved
it."
"I am being careful," he added when asked if he supported the controversial Republican nominee.
"It's not for me as a foreign politician to say who you should vote for ... All I will say is
that if you vote for Hillary Clinton, then nothing will change. She represents the very politics
that we've just broken through the Brexit vote in the United Kingdom."
"... As Mr. Buffet so keenly said it, There is a war going on, and we are winning. ..."
"... Just type `TPP editorial' into news.google.com and watch a toxic sludge of straw men, misdirection, and historical revisionism flow across your screen. And the `objective' straight news reporting is no better. ..."
"... "Why is it afraid of us?" Because we the people are perceived to be the enemy of America the Corporation. Whistleblowers have already stated that the NSA info is used to blackmail politicians and military leaders, provide corporate espionage to the highest payers and more devious machinations than the mind can grasp from behind a single computer. 9/11 was a coup I say that because looking around the results tell me that. ..."
"... The fourth estate (the media) has been purchased outright by the second estate (the nobility). I guess you could call this an 'estate sale'. All power to the markets! ..."
Free Trade," the banner of Globalization, has not only wrecked the world's economy, it has left Western
Democracy in shambles. Europe edges ever closer to deflation. The Fed dare not increase interest
rates, now poised at barely above zero. As China's stock market threatened collapse, China poured
billions to prop it up. It's export machine is collapsing. Not once, but twice, it recently manipulated
its currency to makes its goods cheaper on the world market. What is happening?
The following two
graphs tell most of the story. First, an overview of Free Trade.
Capital fled from developed countries to undeveloped countries with slave-cheap labor, countries
with no environmental standards, countries with no support for collective bargaining. Corporations,
like Apple, set up shop in China and other undeveloped countries. Some, like China, manipulated its
currency to make exported goods to the West even cheaper. Some, like China, gave preferential tax
treatment to Western firm over indigenous firms. Economists cheered as corporate efficiency unsurprisingly
rose. U.S. citizens became mere consumers.
Thanks to Bill Clinton and the Financial Modernization Act, banks, now unconstrained, could peddle
rigged financial services, offer insurance on its own investment productsin short, banks were free
to play with everyone's moneyand simply too big to fail. Credit was easy and breezy. If nasty Arabs
bombed the Trade Center, why the solution was simple: Go to the shopping malland buy. That remarkable
piece of advice is just what freedom has been all about.
Next: China's export machine sputters.
China's problem is that there are not enough orders to keep the export machine going. There comes
a time when industrialized nations simply run out of cashI mean the little people run out of cash.
CEOs and those just below themalong with slick Wall Street gauchosmade bundles on Free Trade, corporate
capital that could set up shop in any impoverished nation in the world.. No worries about labordirt
cheapor environmental regulationsjust bring your gas masks. At some point the Western consumer
well was bound to run dry. Credit was exhausted; the little guy could not buy anymore. Free trade
was on its last legs.
So what did China do then? As its markets crashed, it tried to revive its export model, a model
based on foreign firms exporting cheap goods to the West. China lowered its exchange rates, not once
but twice. Then China tried to rescue the markets with cash infusion of billions. Still its market
continued to crash. Manufacturing plants had closedthousands of them. Free Trade and Globalization
had run its course.
And what has the Fed been doing? Why quantitative easyincrease the money supply and lower short
term interest rates. Like China's latest currency manipulation, both were merely stop-gap measures.
No one, least of all Obama and his corporate advisors, was ready to address corporate outsourcing
that has cost millions of jobs. Prime the pump a little, but never address the real problem.
The WTO sets the groundwork for trade among its member states. That groundwork is deeply flawed.
Trade between impoverished third world countries and sophisticated first world economies is not merely
a matter of regulating "dumping"-not allowing one country to flood the market with cheap goods-nor
is it a matter of insuring that the each country does not favor its indigenous firms over foreign
firms. Comparable labor and environmental standards are necessary. Does anyone think that a first
world worker can compete with virtual slave labor? Does anyone think that a first world nation with
excellent environmental regulations can compete with a third world nation that refuses to protect
its environment?
Only lately has Apple even mentioned that it might clean up its mess in China. The Apple miracle
has been on the backs of the Chinese poor and abysmal environmental wreckage that is China.
The WTO allows three forms of inequities-all of which encourage outsourcing: labor arbitrage,
tax arbitrage, and environmental arbitrage. For a fuller explanation of these inequities and the
"race to the bottom," see
here.
Of course now we have the mother of all Free Trade deals the Trans-Pacific Partnership (TPP)
carefully wrapped in a black box so that none of us can see what finally is in store for us. Nothing
is ever "Free"even trade. I suspect that China is becoming a bit too noxious and poisonous. It simply
has to deal with its massive environmental problems. Time to move the game to less despoiled and
maybe more impoverished countries. Meanwhile, newscasters are always careful to tout TPP.
Fast Tracking is a con man's game. Do it so fast that the marks never have a chance to watch their
wallets. In hiding negotiations from prying, public eyes, Obama, has given the con men a bigger edge:
A screen to hide the corporations making deals. Their interest is in profits, not in public good.
Consider the media. Our only defense is a strong independent media. At one time,
newsrooms were not required to be profitable. Reporting the news was considered a community service.
Corporate ownership provided the necessary funding for its newsroomsand did not interfere.
But the 70′s and 80′s corporate ownership required its newsrooms to be profitable. Slowly but
surely, newsrooms focused on personality, entertainment, and wedge issuesalways careful not to rock
the corporate boat, always careful not to tread on governmental policy. Whoever thought that one
major news serviceFoxwould become a breeding ground for one particular party.
But consider CNN: It organizes endless GOP debates; then spends hours dissecting them. Create
the news; then sell itand be sure to spin it in the direction you want.
Are matters of substance ever discussed? When has a serious foreign policy debate ever been allowed
occurredwithout editorial interference from the media itself. When has trade and outsourcing been
seriously discussedother than by peripheral news media?
Meanwhile, news media becomes more and more centralized. Murdoch now owns National Geographic!
Now, thanks to Bush and Obama, we have the chilling effect of the NSA. Just whom does the NSA
serve when it collects all of our digital information? Is it being used to ferret out the plans of
those exercising their right of dissent? Is it being used to increase the profits of favored corporations?
Why does it need all of your and my personal informationfrom bank accounts, to credit cards, to
travel plans, to friends with whom we chat .Why is it afraid of us?
jefemt, October 23, 2015 at 9:43 am
As Mr. Buffet so keenly said it, There is a war going on, and we are winning.
If 'they' are failing, I'd hate to see success!
Isn't it the un-collective WE who are failing?
failing to organize,
failing to come up with plausible, 90 degrees off present Lemming-to-Brink path alternative plans
and policies,
failing to agree on any of many plausible alternatives that might work
Divided- for now- hopefully not conquered ..
I gotta scoot and get back to Dancing with the Master Chefs
allan, October 23, 2015 at 10:03 am
Just type `TPP editorial' into news.google.com and watch a toxic sludge of straw men, misdirection,
and historical revisionism flow across your screen. And the `objective' straight news reporting
is no better.
Vatch, October 23, 2015 at 10:36 am
Don't just watch the toxic sludge; respond to it with a letter to the editor (LTE) of the offending
publication! For some of those toxic editorials, and contact information for LTEs, see:
A few of the editorials may now be obscured by paywalls or registration requirements, but most
should still be visible. Let them know that we see through their nonsense!
TedWa, October 23, 2015 at 10:38 am
"Why is it afraid of us?" Because we the people are perceived to be the enemy of America
the Corporation. Whistleblowers have already stated that the NSA info is used to blackmail politicians
and military leaders, provide corporate espionage to the highest payers and more devious machinations
than the mind can grasp from behind a single computer. 9/11 was a coup I say that because looking
around the results tell me that.
TG, October 23, 2015 at 3:27 pm
The fourth estate (the media) has been purchased outright by the second estate (the nobility).
I guess you could call this an 'estate sale'. All power to the markets!
Pelham, October 23, 2015 at 8:32 pm
Even when newsrooms were more independent they probably would not, in general, have reported
on free trade with any degree of skepticism. The recent disappearance of the old firewall between
the news and corporate sides has made things worse, but at least since the "professionalization"
of newsrooms that began to really take hold in the '60s, journalists have tended to identify far
more with their sources in power than with their readers.
There have, of course, been notable exceptions. But even these sometimes serve more to obscure
the real day-to-day nature of journalism's fealty to the corporate world than to bring about any
significant change.
CHRIS HEDGES: We're going to be discussing a great Ponzi scheme that not only defines not only
the U.S. but the global economy, how we got there and where we're going. And with me to discuss this
issue is the economist Michael Hudson, author of
Killing
the Host: How Financial Parasites and Debt Destroy the Global Economy. A professor of economics
who worked for many years on Wall Street, where you don't succeed if you don't grasp Marx's dictum
that capitalism is about exploitation. And he is also, I should mention, the godson of Leon Trotsky.
I want to open this discussion by reading a passage from your book, which I admire very much,
which I think gets to the core of what you discuss. You write,
"Adam Smith long ago remarked that profits often are highest in nations going fastest to
ruin. There are many ways to create economic suicide on a national level. The major way through
history has been through indebting the economy. Debt always expands to reach a point where it
cannot be paid by a large swathe of the economy. This is the point where austerity is imposed
and ownership of wealth polarizes between the One Percent and the 99 Percent. Today is not the
first time this has occurred in history. But it is the first time that running into debt has occurred
deliberately." Applauded. "As if most debtors can get rich by borrowing, not reduced to a condition
of debt peonage."
So let's start with the classical economists, who certainly understood this. They were reacting
of course to feudalism. And what happened to the study of economics so that it became gamed by ideologues?
HUDSON: The essence of classical economics was to reform industrial capitalism, to streamline
it, and to free the European economies from the legacy of feudalism. The legacy of feudalism was
landlords extracting land-rent, and living as a class that took income without producing anything.
Also, banks that were not funding industry. The leading industrialists from James Watt, with his
steam engine, to the railroads
HEDGES: From your book you make the point that banks almost never funded industry.
HUDSON: That's the point: They never have. By the time you got to Marx later in the 19th century,
you had a discussion, largely in Germany, over how to make banks do something they did not do under
feudalism. Right now we're having the economic surplus being drained not by the landlords
but also by banks and bondholders.
Adam Smith was very much against colonialism because that lead to wars, and wars led to public
debt. He said the solution to prevent this financial class of bondholders burdening the economy by
imposing more and more taxes on consumer goods every time they went to war was to finance wars on
a pay-as-you-go basis. Instead of borrowing, you'd tax the people. Then, he thought, if everybody
felt the burden of war in the form of paying taxes, they'd be against it. Well, it took all of the
19th century to fight for democracy and to extend the vote so that instead of landlords controlling
Parliament and its law-making and tax system through the House of Lords, you'd extend the vote to
labor, to women and everybody. The theory was that society as a whole would vote in its self-interest.
It would vote for the 99 Percent, not for the One Percent.
By the time Marx wrote in the 1870s, he could see what was happening in Germany. German banks
were trying to make money in conjunction with the government, by lending to heavy industry, largely
to the military-industrial complex.
HEDGES: This was Bismarck's kind of social I don't know what we'd call it. It was a form
of capitalist socialism
HUDSON: They called it State Capitalism. There was a long discussion by Engels, saying, wait a
minute. We're for Socialism. State Capitalism isn't what we mean by socialism. There are two kinds
of state-oriented.
HEDGES: I'm going to interject that there was a kind of brilliance behind Bismarck's policy
because he created state pensions, he provided health benefits, and he directed banking toward industry,
toward the industrialization of Germany which, as you point out, was very different in Britain and
the United States.
HUDSON: German banking was so successful that by the time World War I broke out, there were discussions
in English economic journals worrying that Germany and the Axis powers were going to win because
their banks were more suited to fund industry. Without industry you can't have really a military.
But British banks only lent for foreign trade and for speculation. Their stock market was a hit-and-run
operation. They wanted quick in-and-out profits, while German banks didn't insist that their clients
pay as much in dividends. German banks owned stocks as well as bonds, and there was much more of
a mutual partnership.
That's what most of the 19th century imagined was going to happen that the world
was on the way to socializing banking. And toward moving capitalism beyond the feudal level, getting
rid of the landlord class, getting rid of the rent, getting rid of interest. It was going to be labor
and capital, profits and wages, with profits being reinvested in more capital. You'd have an expansion
of technology. By the early twentieth century most futurists imagined that we'd be living in a leisure
economy by now.
HEDGES: Including Karl Marx.
HUDSON: That's right. A ten-hour workweek. To Marx, socialism was to be an outgrowth of the reformed
state of capitalism, as seemed likely at the time if labor organized in its self-interest.
HEDGES: Isn't what happened in large part because of the defeat of Germany in World War I?
But also, because we took the understanding of economists like Adam Smith and maybe Keynes. I don't
know who you would blame for this, whether Ricardo or others, but we created a fictitious economic
theory to praise a rentier or rent-derived, interest-derived capitalism that countered productive
forces within the economy. Perhaps you can address that.
HUDSON: Here's what happened. Marx traumatized classical economics by taking the concepts of Adam
Smith and John Stuart Mill and others, and pushing them to their logical conclusion.
Progressive
capitalist advocates Ricardian socialists such as John Stuart Mill wanted to tax away the land
or nationalize it. Marx wanted governments to take over heavy industry and build infrastructure to
provide low-cost and ultimately free basic services. This was traumatizing the landlord class and
the One Percent. And they fought back. They wanted to make everything part of "the market," which
functioned on credit supplied by them and paid rent to them.
None of the classical economists imagined how the feudal interests these great vested interests
that had all the land and money actually would fight back and succeed. They thought that the future
was going to belong to capital and labor. But by the late 19th century, certainly in America,
people like John Bates Clark came out with a completely different theory, rejecting the classical
economics of Adam Smith, the Physiocrats and John Stuart Mill.
HEDGES: Physiocrats are, you've tried to explain, the enlightened French economists.
HUDSON: The common denominator among all these classical economists was the distinction between
earned income and unearned income. Unearned income was rent and interest. Earned incomes were wages
and profits. But John Bates Clark came and said that there's no such thing as unearned income. He
said that the landlord actually earns his rent by taking the effort to provide a house and
land to renters, while banks provide credit to earn their interest. Every kind of income is thus
"earned," and everybody earns their income. So everybody who accumulates wealth, by definition, according
to his formulas, get rich by adding to what is now called Gross Domestic Product (GDP).
HEDGES: One of the points you make in
Killing
the Host which I liked was that in almost all cases, those who had the capacity to make money
parasitically off interest and rent had either if you go back to the origins looted and seized
the land by force, or inherited it.
HUDSON: That's correct. In other words, their income is unearned. The result of this anti-classical
revolution you had just before World War I was that today, almost all the economic growth in the
last decade has gone to the One Percent. It's gone to Wall Street, to real estate
HEDGES: But you blame this on what you call Junk Economics.
HUDSON: Junk Economics is the anti-classical reaction.
HEDGES: Explain a little bit how, in essence, it's a fictitious form of measuring the economy.
HUDSON: Well, some time ago I went to a bank, a block away from here a Chase Manhattan bank
and I took out money from the teller. As I turned around and took a few steps, there were two pickpockets.
One pushed me over and the other grabbed the money and ran out. The guard stood there and saw it.
So I asked for the money back. I said, look, I was robbed in your bank, right inside. And they said,
"Well, we don't arm our guards because if they shot someone, the thief could sue us and we don't
want that." They gave me an equivalent amount of money back.
Well, imagine if you count all this crime, all the money that's taken, as an addition to GDP.
Because now the crook has provided the service of not stabbing me. Or suppose somebody's held up
at an ATM machine and the robber says, "Your money or your life." You say, "Okay, here's my money."
The crook has given you the choice of your life. In a way that's how the Gross National Product accounts
are put up. It's not so different from how Wall Street extracts money from the economy. Then also
you have landlords extracting
HEDGES: Let's go back. They're extracting money from the economy by debt peonage. By raising
HUDSON: By not playing a productive role, basically.
HEDGES: Right. So it's credit card interest, mortgage interest, car loans, student loans. That's
how they make their funds.
HUDSON: That's right. Money is not a factor of production. But in order to have access to credit,
in order to get money, in order to get an education, you have to pay the banks. At New York University
here, for instance, they have Citibank. I think Citibank people were on the board of directors at
NYU. You get the students, when they come here, to start at the local bank. And once you are in a
bank and have monthly funds taken out of your account for electric utilities, or whatever, it's very
cumbersome to change.
So basically you have what the classical economists called the rentier class. The class
that lives on economic rents. Landlords, monopolists charging more, and the banks. If you have a
pharmaceutical company that raises the price of a drug from $12 a shot to $200 all of a sudden, their
profits go up. Their increased price for the drug is counted in the national income accounts as if
the economy is producing more. So all this presumed economic growth that has all been taken by the
One Percent in the last ten years, and people say the economy is growing. But the economy isn't growing
HEDGES: Because it's not reinvested.
HUDSON: That's right. It's not production, it's not consumption. The wealth of the One Percent
is obtained essentially by lending money to the 99 Percent and then charging interest on it, and
recycling this interest at an exponentially growing rate.
HEDGES: And why is it important, as I think you point out in your book, that economic theory
counts this rentier income as productive income? Explain why that's important.
HUDSON: If you're a rentier, you want to say that you earned your income by
HEDGES: We're talking about Goldman Sachs, by the way.
HUDSON: Yes, Goldman Sachs. The head of Goldman Sachs came out and said that Goldman Sachs workers
are the most productive in the world. That's why they're paid what they are. The concept of productivity
in America is income divided by labor. So if you're Goldman Sachs and you pay yourself $20 million
a year in salary and bonuses, you're considered to have added $20 million to GDP, and that's enormously
productive. So we're talking in a tautology. We're talking with circular reasoning here.
So the issue is whether Goldman Sachs, Wall Street and predatory pharmaceutical firms, actually
add "product" or whether they're just exploiting other people. That's why I used the word parasitism
in my book's title. People think of a parasite as simply taking money, taking blood out of a host
or taking money out of the economy. But in nature it's much more complicated. The parasite can't
simply come in and take something. First of all, it needs to numb the host. It has an enzyme so that
the host doesn't realize the parasite's there. And then the parasites have another enzyme that takes
over the host's brain. It makes the host imagine that the parasite is part of its own body, actually
part of itself and hence to be protected.
That's basically what Wall Street has done. It depicts itself as part of the economy. Not as a
wrapping around it, not as external to it, but actually the part that's helping the body grow, and
that actually is responsible for most of the growth. But in fact it's the parasite that is taking
over the growth.
The result is an inversion of classical economics. It turns Adam Smith upside down. It says what
the classical economists said was unproductive parasitism actually is the real economy. And that
the parasites are labor and industry that get in the way of what the parasite wants which is to
reproduce itself, not help the host, that is, labor and capital.
HEDGES: And then the classical economists like Adam Smith were quite clear that unless that
rentier income, you know, the money made by things like hedge funds, was heavily taxed and put back
into the economy, the economy would ultimately go into a kind of tailspin. And I think the example
of that, which you point out in your book, is what's happened in terms of large corporations with
stock dividends and buybacks. And maybe you can explain that.
HUDSON: There's an idea in superficial textbooks and the public media that if companies make a
large profit, they make it by being productive. And with
HEDGES: Which is still in textbooks, isn't it?
HUDSON: Yes. And also that if a stock price goes up, you're just capitalizing the profits and
the stock price reflects the productive role of the company. But that's not what's been happening
in the last ten years. Just in the last two years, 92 percent of corporate profits in America have
been spent either on buying back their own stock, or paid out as dividends to raise the price of
the stock.
HEDGES: Explain why they do this.
HUDSON: About 15 years ago at Harvard, Professor Jensen said that the way to ensure that corporations
are run most efficiently is to make the managers increase the price of the stock. So if you give
the managers stock options, and you pay them not according to how much they're producing or making
the company bigger, or expanding production, but the price of the stock, then you'll have the corporation
run efficiently, financial style.
So the corporate managers find there are two ways that they can increase the price of the stock.
The first thing is to cut back long-term investment, and use the money instead to buy back their
own stock. But when you buy your own stock, that means you're not putting the money into capital
formation. You're not building new factories. You're not hiring more labor. You can actually increase
the stock price by firing labor.
HEDGES: That strategy only works temporarily.
HUDSON: Temporarily. By using the income from past investments just to buy back stock, fire the
labor force if you can, and work it more intensively. Pay it out as dividends. That basically is
the corporate raider's model. You use the money to pay off the junk bond holders at high interest.
And of course, this gets the company in trouble after a while, because there is no new investment.
So markets shrink. You then go to the labor unions and say, gee, this company's near bankruptcy,
and we don't want to have to fire you. The way that you can keep your job is if we downgrade your
pensions. Instead of giving you what we promised, the defined benefit pension, we'll turn it into
a defined contribution plan. You know what you pay every month, but you don't know what's going to
come out. Or, you wipe out the pension fund, push it on to the government's Pension Benefit Guarantee
Corporation, and use the money that you were going to pay for pensions to pay stock dividends. By
then the whole economy is turning down. It's hollowed out. It shrinks and collapses. But by that
time the managers will have left the company. They will have taken their bonuses and salaries and
run.
HEDGES: I want to read this quote from your book, written by David Harvey, in
A Brief
History of Neoliberalism, and have you comment on it.
"The main substantive achievement of neoliberalism has been to redistribute rather than
to generate wealth and income. [By] 'accumulation by dispossession' I mean the commodification
and privatization of land, and the forceful expulsion of peasant populations; conversion of various
forms of property rights (common collective state, etc.) into exclusive private property rights;
suppression of rights to the commons; colonial, neocolonial, and the imperial processes of appropriation
of assets (including natural resources); and usury, the national debt and, most devastating
at all, the use of the credit system as a radical means of accumulation by dispossession. To
this list of mechanisms, we may now add a raft of techniques such as the extraction of rents from
patents, and intellectual property rights (such as the diminution or erasure of various forms
of common property rights, such as state pensions, paid vacations, and access to education, health
care) one through a generation or more of class struggle. The proposal to privatize all state
pension rights, pioneered in Chile under the dictatorship is, for example, one of the cherished
objectives of the Republicans in the US."
This explains the denouement. The final end result you speak about in your book is, in essence,
allowing what you call the rentier or the speculative class to cannibalize the entire society until
it collapses.
HUDSON: A property right is not a factor of production. Look at what happened in Chicago, the
city where I grew up. Chicago didn't want to raise taxes on real estate, especially on its expensive
commercial real estate. So its budget ran a deficit. They needed money to pay the bondholders, so
they sold off the parking rights to have meters you know, along the curbs. The result is that they
sold to Goldman Sachs 75 years of the right to put up parking meters. So now the cost of living and
doing business in Chicago is raised by having to pay the parking meters. If Chicago is going to have
a parade and block off traffic, it has to pay Goldman Sachs what the firm would have made
if the streets wouldn't have been closed off for a parade. All of a sudden it's much more expensive
to live in Chicago because of this.
But this added expense of having to pay parking rights to Goldman Sachs to pay out interest
to its bondholders is counted as an increase in GDP, because you've created more product simply
by charging more. If you sell off a road, a government or local road, and you put up a toll booth
and make it into a toll road, all of a sudden GDP goes up.
If you go to war abroad, and you spend more money on the military-industrial complex, all this
is counted as increased production. None of this is really part of the production system of the capital
and labor building more factories and producing more things that people need to live and do business.
All of this is overhead. But there's no distinction between wealth and overhead.
Failing to draw that distinction means that the host doesn't realize that there is a parasite
there. The host economy, the industrial economy, doesn't realize what the industrialists realized
in the 19th century: If you want to be an efficient economy and be low-priced and under-sell
competitors, you have to cut your prices by having the public sector provide roads freely. Medical
care freely. Education freely.
If you charge for all of these, you get to the point that the U.S. economy is in today. What if
American factory workers were to get all of their consumer goods for nothing. All their food,
transportation, clothing, furniture, everything for nothing. They still couldn't compete with
Asians or other producers, because they have to pay up to 43% of their income for rent or mortgage
interest, 10% or more of their income for student loans, credit card debt. 15% of their paycheck
is automatic withholding to pay Social Security, to cut taxes on the rich or to pay for medical care.
So Americans built into the economy all this overhead. There's no distinction between growth and
overhead. It's all made America so high-priced that we're priced out of the market, regardless of
what trade policy we have.
HEDGES: We should add that under this predatory form of economics, you game the system. So
you privatize pension funds, you force them into the stock market, an overinflated stock market.
But because of the way companies go public, it's the hedge fund managers who profit. And it's those
citizens whose retirement savings are tied to the stock market who lose. Maybe we can just conclude
by talking about how the system is fixed, not only in terms of burdening the citizen with debt peonage,
but by forcing them into the market to fleece them again.
HUDSON: Well, we talk about an innovation economy as if that makes money. Suppose you have an
innovation and a company goes public. They go to Goldman Sachs and other Wall Street investment banks
to underwrite the stock to issue it at $40 a share. What's considered a successful float is when,
immediately, Goldman and the others will go to their insiders and tell them to buy this stock and
make a quick killing. A "successful" flotation doubles the price in one day, so that at the end of
the day the stock's selling for $80.
HEDGES: They have the option to buy it before anyone else, knowing that by the end of the day
it'll be inflated, and then they sell it off.
HUDSON: That's exactly right.
HEDGES: So the pension funds come in and buy it at an inflated price, and then it goes back
down.
HUDSON: It may go back down, or it may be that the company just was shortchanged from the very
beginning. The important thing is that the Wall Street underwriting firm, and the speculators it
rounds up, get more in a single day than all the years it took to put the company together. The company
gets $40. And the banks and their crony speculators also get $40.
So basically you have the financial sector ending up with much more of the gains. The name of
the game if you're on Wall Street isn't profits. It's capital gains. And that's something that wasn't
even part of classical economics. They didn't anticipate that the price of assets would go up for
any other reason than earning more money and capitalizing on income. But what you have had in the
last 50 years really since World War II has been asset-price inflation. Most middle-class families
have gotten the wealth that they've got since 1945 not really by saving what they've earned by working,
but by the price of their house going up. They've benefited by the price of the house. And they think
that that's made them rich and the whole economy rich.
The reason the price of housing has gone up is that a house is worth whatever a bank is going
to lend against it. If banks made easier and easier credit, lower down payments, then you're going
to have a financial bubble. And now, you have real estate having gone up as high as it can. I don't
think it can take more than 43% of somebody's income to buy it. But now, imagine if you're joining
the labor force. You're not going to be able to buy a house at today's prices, putting down a little
bit of your money, and then somehow end up getting rich just on the house investment. All of this
money you pay the bank is now going to be subtracted from the amount of money that you have available
to spend on goods and services.
So we've turned the post-war economy that made America prosperous and rich inside out. Somehow
most people believed they could get rich by going into debt to borrow assets that were going to rise
in price. But you can't get rich, ultimately, by going into debt. In the end the creditors always
win. That's why every society since Sumer and Babylonia have had to either cancel the debts, or you
come to a society like Rome that didn't cancel the debts, and then you have a dark age. Everything
collapses.
"... Furthermore, as Mark Kleiman sagely observes , the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins - but we now have an ideology utterly opposed to such redistribution in full control of one party, and with blocking power against anything but a minor move in that direction by the other. ..."
A Protectionist Moment? : ... if Sanders were to make it to the White House, he would find
it very hard to do anything much about globalization - not because it's technically or economically
impossible, but because the moment he looked into actually tearing up existing trade agreements
the diplomatic, foreign-policy costs would be overwhelmingly obvious. ...
But it's also true
that much of the elite defense of globalization is basically dishonest: false claims of inevitability,
scare tactics (
protectionism causes depressions !), vastly exaggerated claims for the benefits of trade liberalization
and the costs of protection, hand-waving away the large distributional effects that are what standard
models actually predict. I hope, by the way, that I haven't done any of that...
Furthermore, as Mark Kleiman
sagely observes , the conventional case for trade liberalization relies on the assertion that
the government could redistribute income to ensure that everyone wins - but we now have an ideology
utterly opposed to such redistribution in full control of one party, and with blocking power against
anything but a minor move in that direction by the other.
So the elite case for ever-freer trade is largely a scam, which voters probably sense even
if they don't know exactly what form it's taking.
Ripping up the trade agreements we already have would, again, be a mess, and I would say that
Sanders is engaged in a bit of a scam himself in even hinting that he could do such a thing. Trump
might actually do it, but only as part of a reign of destruction on many fronts.
But it is fair to say that the case for more trade agreements - including TPP, which hasn't
happened yet - is very, very weak. And if a progressive makes it to the White House, she should
devote no political capital whatsoever to such things.
Again, just because automation has been a major factor in job loss doesn't mean "off shoring"
(using the term broadly and perhaps somewhat inaccurately) is not a factor.
The "free" trade deals suck. They are correctly diagnosed as part of the problem.
What would you propose to fix the problems caused by automation?
Automation frees labor to do more productive and less onerous tasks. We should expand our solar
production and our mass transit. We need to start re-engineering our urban areas. This will not
bring back the number of jobs it would take to make cities like Flint thrive once again.
Flint and Detroit have severe economic problems because they were mismanaged by road building
and suburbanization in the 1950s and 1960s. Money that should have been spent on maintaining and
improving urban infrastructure was instead plowed into suburban development that is not dense
enough to sustain the infrastructure required to support it. People moved to the suburbs, abandoned
the built infrastructure of the cities and kissed them goodbye.
Big roads polluted the cities with lead, noise, diesel particles and ozone and smog. Stroads
created pedestrian kill zones making urban areas, unwalkable, unpleasant- an urban blights to
drive through rather than destinations to drive to.
Government subsidized the white flight to the suburbs that has left both the suburbs and the
urban cores with too low revenue to infrastructure ratio. The inner suburbs have aged into net
losers, their infrastructure must be subsidized. Big Roads were built on the Big Idea that people
would drive to the city to work and play and then drive home. That Big idea has a big problem.
Urban areas are only sustainable when they have a high resident density. The future of cities
like Flint and Detroit will be tearing out the roads and replacing them with streets and houses
and renewing the housing stock that has been abandoned. It needs to be done by infill, revitalizing
inner neighborhoods and working outward. Cities like Portland have managed to protect much of
their core, but even they are challenged by demands for suburban sprawl.
Slash and burn development, creating new suburbs and abandoning the old is not a sustainable
model. Not only should we put people to work replacing the Flint lead pipes, but much of the city
should be rebuilt from the inside out. Flint is the leading edge of this problem that requires
fundamental changes in our built environment to fix. I recommend studying Flint as an object lesson
of what bad development policy could do to all of our cities.
An Interview with Frank Popper about Shrinking Cities, Buffalo Commons, and the Future of Flint
How does America's approach shrinking cities compare to the rest of the world?
I think the American way is to do nothing until it's too late, then throw everything at it
and improvise and hope everything works. And somehow, insofar as the country's still here, it
has worked. But the European or the Japanese way would involve much more thought, much more foresight,
much more central planning, and much less improvising. They would implement a more, shall we say,
sustained effort. The American way is different. Europeans have wondered for years and years why
cities like Detroit or Cleveland are left to rot on the vine. There's a lot of this French hauteur
when they ask "How'd you let this happen?"
Do shrinking cities have any advantages over agricultural regions as they face declining populations?
The urban areas have this huge advantage over all these larger American regions that are going
through this. They have actual governments with real jurisdiction. Corrupt as Detroit or Philadelphia
or Camden may be, they have actual governments that are supposed to be in charge of them. Who's
in charge of western Kansas? Who's in charge of the Great Plains? Who is in charge of the lower
Mississippi Delta or central Appalachia? All they've got are these distant federal agencies whose
past performance is not exactly encouraging.
Why wasn't there a greater outcry as the agricultural economy and the industrial economy collapsed?
One reason for the rest of the country not to care is that there's no shortage of the consumer
goods that these places once produced. All this decline of agriculture doesn't mean we're running
out of food. We've got food coming out of our ears. Likewise, Flint has suffered through all this,
but it's not like it's hard to buy a car in this country. It's not as if Flint can behave like
a child and say "I'm going to hold my nose and stop you from getting cars until you do the right
thing." Flint died and you can get zero A.P.R. financing. Western Kansas is on its last legs and,
gee, cereal is cheaper than ever.
In some sense that's the genius of capitalism - it's heartless. But if you look at the local
results and the cultural results and the environmental results you shake your head. But I don't
see America getting away from what I would call a little sarcastically the "wisdom" of the market.
I don't think it's going to change.
So is there any large-scale economic fallout from these monumental changes?
Probably not, and it hurts to say so. And the only way I can feel good about saying that is
to immediately point to the non-economic losses, the cultural losses. The losses of ways of life.
The notion of the factory worker working for his or her children. The notion of the farmer working
to build up the country and supply the rest of the world with food. We're losing distinctive ways
of life. When we lose that we lose something important, but it's not like The Wall Street Journal
cares. And I feel uncomfortable saying that. From a purely economic point of view, it's just the
price of getting more efficient. It's a classic example of Schumpeter's theory of creative destruction,
which is no fun if you're on the destruction end.
Does the decline of cities like Flint mirror the death of the middle class in the United States?
I think it's more the decline of the lower-middle class in the United States. Even when those
jobs in the auto factories paid very high wages they were still for socially lower-middle-class
people. I think there was always the notion in immigrant families and working-class families who
worked in those situations that the current generation would work hard so that the children could
go off and not have to do those kind of jobs. And when those jobs paid well that was a perfectly
reasonable ambition. It's the cutting off of that ambition that really hurts now. The same thing
has been true on farms and ranches in rural parts of the united states.
It is a much different thing to be small minded about trade than it is to be large minded about
everything else. The short story that it is all about automation and not trade will always get
a bad reception because it is small minded. When you add in the large minded story about everything
else then it becomes something entirely different from the short story. We all agree with you
about everything else. You are wrong about globalization though. Both financialization and globalization
suck and even if we paper over them with tax and transfer then they will still suck. One must
forget what it is to be a created equal human to miss that. Have you never felt the job of accomplishment?
Does not pride and self-confidence matter in your life?
While automation is part of the story, offshoring is just as important. Even when there is not
net loss in the numbers of jobs in aggregate, there is significant loss in better paying jobs
in manufacturing. It is important to look at the distributional effects within countries, as well
as between them
It would probably be cheaper and easier to just fix them. We don't need to withdraw from trade.
We just need to fix the terms of trade that cause large trade deficits and cross border capital
flows and also fix the FOREX system rigging.
What would it take to ignore trade agreements? They shouldn't be any more difficult to ignore
than the Geneva Conventions, which the US routinely flaunts.
In order to import we must export and in order to export we must import. The two are tied together.
Suppressing imports means we export less.
What free trade does is lower the price level relative to wages. It doesn't uniformly lower
the price level but rather lowers the cost of goods that are capable of being traded internationally.
It lowers the price on those goods that are disproportionately purchased by those with low incomes.
Free trade causes a progressive decline in the price level while protectionism causes a regressive
increase in the price level.
Funny rebuttal! Bhagwati probably has a model that says the opposite! But then he grew up in India
and should one day get a Nobel Prize for his contributions to international economics.
Our media needs to copy France 24, ... and have real debates about real issues. What we get is
along the lines of ignoring the problem then attacking any effort to correct. for example, the
media stayed away from the healthcare crisis, too complicated, but damn they are good at criticizing.
A seriously shameful article. Krugman has been a booster of trade & globalization for 30 years:
marginally more nuanced than the establishment, but still a booster.
Now, the establishment has what it wanted and the effects have been disastrous for those not
in the top 20 percent of the income distribution.
At this stage, comes insult to injury. Establishment economists (like Mr. Krugman) can reinvent
themselves with "brilliant new studies" showing the costs and damage of globalization. They pay
no professional costs for the grievous injuries inflicted; there is no mention of the fact that
critical outsider economists have been predicting and writing about these injuries and were right;
and they blithely say we must stay the course because we are locked-in and have few options.
Krugman is not Greg Mankiw. Most people who actually get international economics (Mankiw does
not) are not of the free trade benefits all types. Paul Samuelson certainly does not buy into
Mankiw's spin. Funny thing - Mankiw recently cited an excellent piece from Samuelson only to dishonestly
suggest Samuelson did not believe in what he wrote.
Why are you mischaracterizing what Krugman has written? That's my point. Oh wait - you misrepresent
what people write so you can "win" a "debate". Never mind. Please proceed with the serial dishonesty.
"The truth is that if Sanders were to make it to the White House, he would find it very hard to
do anything much about globalization - not because it's technically or economically impossible,
but because the moment he looked into actually tearing up existing trade agreements the diplomatic,
foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders
currently benefits from the luxury of irresponsibility: he's never been anywhere close to the
levers of power, so he could take principled-sounding but arguably feckless stances in a way that
Clinton couldn't and can't."
As Dean Baker says, we need to confront Walmart and Goldman Sachs at home, who like these policies,
more than the Chinese.
The Chinese want access to our consumer market. They'd also like if we did't invade countries
like Iraq.
"so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn't"
And what is that? Tear up trade deals? It is Krugman who is engaging in straw man arguments.
Krugman does indeed misrepresent Sanders' positions on trade. Sander is not against trade, he
merely insists on *Fair Trade*, which incorporates human rights and environmental protections.
His opposition is to the kinds of deals, like NAFTA and TPP, which effectively gut those (a central
element in Kruman's own critique of the latter).
Krugman has definitely backed off his (much) earlier boosterism and publicly said so. This is
an excellent piece by him, though it does rather downplay his earlier stances a bit. This is one
of the things I especially like about him.
I can get the idea that some people win, some people lose from liberalized trade. But what really
bugs me about the neoliberal trade agenda is that it has been part of a larger set of economically
conservative, laissez faire policies that have exacerbated the damages from trade rather than
offsetting them.
At the same time they were exposing US workers to greater competition from abroad and destroying
and offshoring working class jobs via both trade and liberalized capital flows, the neoliberals
were also doing things like "reinventing government" - that is, shrinking structural government
spending and public investment - and ending welfare. They have done nothing serious about steering
capital and job development efforts toward the communities devastated by the liberalization.
The neoliberal position has seem to come down to "We can't make bourgeois progress without
breaking a few working class eggs."
Agreed! "Krugman has been a booster of trade & globalization for 30 years: marginally more nuanced
than the establishment, but still a booster.'
Now he claims that he saw the light all along! "much of the elite defense of globalization
is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!),
vastly exaggerated claims for the benefits of trade liberalization and the costs of protection,
hand-waving away the large distributional effects that are what standard models actually predict.
I hope, by the way, that I haven't done any of that..."
You would be hard pressed to find any Krugman clips that cited any of those problems in the
past. Far from being an impartial economist, he was always an avid booster of free trade, overlooking
those very downsides that he suddenly decides to confess.
As far as I know, Sanders has not proposed ripping up the existing trade deals. His information
page on trade emphasizes (i) his opposition to these deals when they were first negotiated and
enacted, and (ii) the principles he will apply to the consideration of future trade deals. Much
of his argumentation concerning past deals is put forward to motivate his present opposition to
TPP.
Note also that Sanders connects his discussion of the harms of past trade policy to the Rebuild
America Act. That is, his approach is forward facing. We can't undo most of the past damage by
recreating the old working class economy we wrecked, but we can be aggressive about using government-directed
national investment programs to create new, high-paying jobs in the US.
You could have said the same about the 1920s
We can't undo most of the past damage by recreating the old agrarian class economy we wrecked,
but we can be aggressive about using government-directed national investment programs to create
new, high-paying jobs in the US.
The march of progress:
Mechanization of agriculture with displacement of large numbers of Ag workers.
The rise of factory work and large numbers employed in manufacturing.
Automation of Manufacturing with large displacement of workers engaged in manufacturing.
What do we want our workers to do? This question must be answered at the highest level of society
and requires much government facilitation. The absence of government facilitation is THE problem.
Memo to Paul Krugman - lead with the economics and stay with the economics. His need to get into
the dirty business of politics dilutes what he ends up sensibly writes later on.
""The truth is that if Sanders were to make it to the White House, he would find it very hard
to do anything much about globalization - not because it's technically or economically impossible,
but because the moment he looked into actually tearing up existing trade agreements the diplomatic,
foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders
currently benefits from the luxury of irresponsibility: he's never been anywhere close to the
levers of power, so he could take principled-sounding but arguably feckless stances in a way that
Clinton couldn't and can't."
Yeah, it's pretty dishonest for Krugman to pretend that Sanders' position is "ripping up the trade
agreements we already have" and then say Sanders is "engaged in a bit of a scam" because he can't
do that. Sanders actual position (trying to stop new trade deals like the TPP) is something the
president has a lot of influence over (they can veto the deal). Hard to tell what Krugman is doing
here other than deliberately spreading misinformation.
Also worth noting that he decides to compare Sanders' opposition to trade deals with Trump,
and ignore the fact that Clinton has come out against the TPP as well .
Busy with real life, but yes, I know what happened in the primaries yesterday. Triumph for
Trump, and big upset for Sanders - although it's still very hard to see how he can catch Clinton.
Anyway, a few thoughts, not about the horserace but about some deeper currents.
The Sanders win defied all the polls, and nobody really knows why. But a widespread guess is
that his attacks on trade agreements resonated with a broader audience than his attacks on Wall
Street; and this message was especially powerful in Michigan, the former auto superpower. And
while I hate attempts to claim symmetry between the parties - Trump is trying to become America's
Mussolini, Sanders at worst America's Michael Foot * - Trump has been tilling some of the same
ground. So here's the question: is the backlash against globalization finally getting real political
traction?
You do want to be careful about announcing a political moment, given how many such proclamations
turn out to be ludicrous. Remember the libertarian moment? The reformocon moment? Still, a protectionist
backlash, like an immigration backlash, is one of those things where the puzzle has been how long
it was in coming. And maybe the time is now.
The truth is that if Sanders were to make it to the White House, he would find it very hard
to do anything much about globalization - not because it's technically or economically impossible,
but because the moment he looked into actually tearing up existing trade agreements the diplomatic,
foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders
currently benefits from the luxury of irresponsibility: he's never been anywhere close to the
levers of power, so he could take principled-sounding but arguably feckless stances in a way that
Clinton couldn't and can't.
But it's also true that much of the elite defense of globalization is basically dishonest:
false claims of inevitability, scare tactics (protectionism causes depressions! ** ), vastly exaggerated
claims for the benefits of trade liberalization and the costs of protection, hand-waving away
the large distributional effects that are what standard models actually predict. I hope, by the
way, that I haven't done any of that; I think I've always been clear that the gains from globalization
aren't all that (here's a back-of-the-envelope on the gains from hyperglobalization *** - only
part of which can be attributed to policy - that is less than 5 percent of world GDP over a generation);
and I think I've never assumed away the income distribution effects.
Furthermore, as Mark Kleiman sagely observes, **** the conventional case for trade liberalization
relies on the assertion that the government could redistribute income to ensure that everyone
wins - but we now have an ideology utterly opposed to such redistribution in full control of one
party, and with blocking power against anything but a minor move in that direction by the other.
So the elite case for ever-freer trade is largely a scam, which voters probably sense even
if they don't know exactly what form it's taking.
Ripping up the trade agreements we already have would, again, be a mess, and I would say that
Sanders is engaged in a bit of a scam himself in even hinting that he could do such a thing. Trump
might actually do it, but only as part of a reign of destruction on many fronts.
But it is fair to say that the case for more trade agreements - including Trans-Pacific Partnership,
which hasn't happened yet - is very, very weak. And if a progressive makes it to the White House,
she should devote no political capital whatsoever to such things.
Michael Mackintosh Foot (1913 2010) was a British Labour Party politician and man of letters
who was a Member of Parliament (MP) from 1945 to 1955 and from 1960 until 1992. He was Deputy
Leader of the Labour Party from 1976 to 1980, and later the Leader of the Labour Party and Leader
of the Opposition from 1980 to 1983.
Associated with the left of the Labour Party for most of his career, Foot was an ardent supporter
of the Campaign for Nuclear Disarmament and British withdrawal from the European Economic Community.
He was appointed to the Cabinet as Secretary of State for Employment under Harold Wilson in 1974,
and he later served as Leader of the House of Commons under James Callaghan. A passionate orator,
he led Labour through the 1983 general election, when the party obtained its lowest share of the
vote at a general election since 1918 and the fewest parliamentary seats it had had at any time
since before 1945.
There was so much wrong with Mitt Romney's Trump-is-a-disaster-whom-I-will-support-in-the-general
* speech that it may seem odd to call him out for bad international macroeconomics. But this is
a pet peeve of mine, in an area where I really, truly know what I'm talking about. So here goes.
In warning about Trumponomics, Romney declared:
"If Donald Trump's plans were ever implemented, the country would sink into prolonged recession.
A few examples. His proposed 35 percent tariff-like penalties would instigate a trade war and
that would raise prices for consumers, kill our export jobs and lead entrepreneurs and businesses
of all stripes to flee America."
After all, doesn't everyone know that protectionism causes recessions? Actually, no. There
are reasons to be against protectionism, but that's not one of them.
Think about the arithmetic (which has a well-known liberal bias). Total final spending on domestically
produced goods and services is
Total domestic spending + Exports Imports = GDP
Now suppose we have a trade war. This will cut exports, which other things equal depresses
the economy. But it will also cut imports, which other things equal is expansionary. For the world
as a whole, the cuts in exports and imports will by definition be equal, so as far as world demand
is concerned, trade wars are a wash.
OK, I'm sure some people will start shouting "Krugman says protectionism does no harm." But
no: protectionism in general should reduce efficiency, and hence the economy's potential output.
But that's not at all the same as saying that it causes recessions.
But didn't the Smoot-Hawley tariff cause the Great Depression? No. There's no evidence at all
that it did. Yes, trade fell a lot between 1929 and 1933, but that was almost entirely a consequence
of the Depression, not a cause. (Trade actually fell faster ** during the early stages of the
2008 Great Recession than it did after 1929.) And while trade barriers were higher in the 1930s
than before, this was partly a response to the Depression, partly a consequence of deflation,
which made specific tariffs (i.e. tariffs that are stated in dollars per unit, not as a percentage
of value) loom larger.
Again, not the thing most people will remember about Romney's speech. But, you know, protectionism
was the only reason he gave for believing that Trump would cause a recession, which I think is
kind of telling: the GOP's supposedly well-informed, responsible adult, trying to save the party,
can't get basic economics right at the one place where economics is central to his argument.
The Gains From Hyperglobalization (Wonkish)
By Paul Krugman
Still taking kind of an emotional vacation from current political madness. Following up on
my skeptical post on worries about slowing trade growth, * I wondered what a state-of-the-art
model would say.
The natural model to use, at least for me, is Eaton-Kortum, ** which is a very ingenious approach
to thinking about multilateral trade flows. The basic model is Ricardian - wine and cloth and
labor productivity and all that - except that there are many goods and many countries, transportation
costs, and countries are assumed to gain productivity in any particular industry through a random
process. They make some funny assumptions about distributions - hey, that's kind of the price
of entry for this kind of work - and in return get a tractable model that yields gravity-type
equations for international trade flows. This is a good thing, because gravity models *** of trade
- purely empirical exercises, with no real theory behind them - are known to work pretty well.
Their model also yields a simple expression for the welfare gains from trade:
Real income = A*(1-import share)^(-1/theta)
where A is national productivity and theta is a parameter of their assumed random process (don't
ask); they suggest that theta=4 provides the best match to available data.
Now, what I wanted to do was apply this to the rapid growth of trade that has taken place since
around 1990, what Subramanian **** calls "hyperglobalization". According to Subramanian's estimates,
overall trade in goods and services has risen from about 19 percent of world GDP in the early
1990s to 33 percent now, bringing us to a level of integration that really is historically unprecedented.
There are some conceptual difficulties with using this rise directly in the Eaton-Kortum framework,
because much of it has taken the form of trade in intermediate goods, and the framework isn't
designed to handle that. Still, let me ignore that, and plug Subramanian's numbers into the equation
above; I get a 4.9 percent rise in real incomes due to increased globalization.
That's by no means small change, but it's only a fairly small fraction of global growth. The
Maddison database ***** gives us a 45 percent rise in global GDP per capita over the same period,
so this calculation suggests that rising trade was responsible for around 10 percent of overall
global growth. My guess is that most people who imagine themselves well-informed would give a
bigger number.
By the way, for those critical of globalization, let me hasten to concede that by its nature
the Eaton-Kortum model doesn't let us talk about income distribution, and it also makes no room
for the possible role of globalization in causing secular stagnation. ******
Still, I thought this was an interesting calculation to make - which may show more about my
warped sense of what's interesting than it does about anything else.
General Equilibrium Analysis of the Eaton-Kortum Model of International Trade
By Fernando Alvarez and Robert E. Lucas
We study a variation of the Eaton-Kortum model, a competitive, constant-returns-to-scale multicountry
Ricardian model of trade. We establish existence and uniqueness of an equilibrium with balanced
trade where each country imposes an import tariff. We analyze the determinants of the cross-country
distribution of trade volumes, such as size, tariffs and distance, and compare a calibrated version
of the model with data for the largest 60 economies. We use the calibrated model to estimate the
gains of a world-wide trade elimination of tariffs, using the theory to explain the magnitude
of the gains as well as the differential effect arising from cross-country differences in pre-liberalization
of tariffs levels and country size.
The gravity model of international trade in international economics, similar to other gravity
models in social science, predicts bilateral trade flows based on the economic sizes (often using
GDP measurements) and distance between two units. The model was first used by Jan Tinbergen in
1962.
The Hyperglobalization of Trade and Its Future
By Arvind Subramanian and Martin Kessler
Abstract
The open, rules-based trading system has delivered immense benefits-for the world, for individual
countries, and for average citizens in these countries. It can continue to do so, helping today's
low-income countries make the transition to middle-income status. Three challenges must be met
to preserve this system. Rich countries must sustain the social consensus in favor of open markets
and globalization at a time of considerable economic uncertainty and weakness; China and other
middle-income countries must remain open; and mega-regionalism must be prevented from leading
to discrimination and trade conflicts. Collective action should help strengthen the institutional
underpinnings of globalization. The world should move beyond the Doha Round dead to more meaningful
multilateral negotiations to address emerging challenges, including possible threats from new
mega-regional agreements. The rising powers, especially China, will have a key role to play in
resuscitating multilateralism.
"Furthermore, as Mark Kleiman sagely observes, the conventional case for trade liberalization
relies on the assertion that the government could redistribute income to ensure that everyone
wins"
That was never the conventional case for trade. Plus it's kind of odd that you have to add
"plus have the government redistribute" to the case your making.
Tom Pally above is correct. Krugman has been on the wrong side of this issue. He's gotten better,
but the timing is he's gotten better as the Democratic Party has moved to the left and pushed
back against corporate trade deals. Even Hillary came out late against Obama's TPP.
Sanders has nothing about ripping up trade deals. He has said he won't do any more.
As cawley predicted, once Sanders won Michigan, Krugman started hitting him again at his blog.
With cheap shots I might add. He's ruining his brand.
Tell Morning Edition: It's Not "Free Trade" Folks
by Dean Baker
Published: 10 March 2016
Hey, can an experienced doctor from Germany show up and start practicing in New York next week?
Since the answer is no, we can say that we don't have free trade. It's not an immigration issue,
if the doctor wants to work in a restaurant kitchen, she would probably get away with it. We have
protectionist measures that limit the number of foreign doctors in order to keep their pay high.
These protectionist measures have actually been strengthened in the last two decades.
We also have strengthened patent and copyright protections, making drugs and other affected
items far more expensive. These protections are also forms of protectionism.
This is why Morning Edition seriously misled its listeners in an interview with ice cream barons
Ben Cohen and Jerry Greenfield over their support of Senator Bernie Sanders. The interviewer repeatedly
referred to "free trade" agreements and Sanders' opposition to them. While these deals are all
called "free trade" deals to make them sound more palatable ("selective protectionism to redistribute
income upward" doesn't sound very appealing), that doesn't mean they are actually about free trade.
Morning Edition should not have used the term employed by promoters to push their trade agenda.
This has been Dean Baker's excellent theme for a very long time. And if you actually paid attention
to what Krugman said about TPP - he agreed with Dean's excellent points. But do continue to set
up straw man arguments so you can dishonestly attack Krugman.
No. That is not a sign of a faulty memory, quite the contrary.
Krugman writes column after column praising trade pacts and criticizing (rightly, I might add)
the yahoos who object for the wrong reasons.
But he omits a few salient facts like
- the gains are small,
- the government MUST intervene with redistribution for this to work socially,
- there are no (or minimal) provisions for that requirement in the pacts.
I would say his omissions speak volumes and are worth remembering.
Krugman initially wrote a confused column about the TPP, treating it as a simple free trade deal
which he said would have little impact because tariffs were already so low. But he did eventually
look into the matter further and wound up agreeing with Baker's take.
"That was never the conventional case for trade". Actually it was. Of course Greg Mankiw never
got the memo so his free trade benefits all BS confuses a lot of people. Mankiw sucks at international
trade.
David Glasner attacks Krugman from the right, but he doesn't whitewash the past as you do.
He remembers Gore versus Perot:
"Indeed, Romney didn't even mention the Smoot-Hawley tariff, but Krugman evidently forgot the
classic exchange between Al Gore and the previous incarnation of protectionist populist outrage
in an anti-establishment billionaire candidate for President:
GORE I've heard Mr. Perot say in the past that, as the carpenters says, measure twice and cut
once. We've measured twice on this. We have had a test of our theory and we've had a test of his
theory. Over the last five years, Mexico's tariffs have begun to come down because they've made
a unilateral decision to bring them down some, and as a result there has been a surge of exports
from the United States into Mexico, creating an additional 400,000 jobs, and we can create hundreds
of thousands of more if we continue this trend. We know this works. If it doesn't work, you know,
we give six months notice and we're out of it. But we've also had a test of his theory.
PEROT When?
GORE In 1930, when the proposal by Mr. Smoot and Mr. Hawley was to raise tariffs across the
board to protect our workers. And I brought some pictures, too.
[Larry] KING You're saying Ross is a protectionist?
GORE This is, this is a picture of Mr. Smoot and Mr. Hawley. They look like pretty good fellows.
They sounded reasonable at the time; a lot of people believed them. The Congress passed the Smoot-Hawley
Protection Bill. He wants to raise tariffs on Mexico. They raised tariffs, and it was one of the
principal causes, many economists say the principal cause, of the Great Depression in this country
and around the world. Now, I framed this so you can put it on your wall if you want to.
You obviously have not read Krugman. Here is from his 1997 Slate piece:
But putting Greenspan (or his successor) into the picture restores much of the classical vision
of the macroeconomy. Instead of an invisible hand pushing the economy toward full employment in
some unspecified long run, we have the visible hand of the Fed pushing us toward its estimate
of the noninflationary unemployment rate over the course of two or three years. To accomplish
this, the board must raise or lower interest rates to bring savings and investment at that target
unemployment rate in line with each other.
And so all the paradoxes of thrift, widow's cruses, and so on become irrelevant. In particular,
an increase in the savings rate will translate into higher investment after all, because the Fed
will make sure that it does.
To me, at least, the idea that changes in demand will normally be offset by Fed policy--so
that they will, on average, have no effect on employment--seems both simple and entirely reasonable.
Yet it is clear that very few people outside the world of academic economics think about things
that way. For example, the debate over the North American Free Trade Agreement was conducted almost
entirely in terms of supposed job creation or destruction. The obvious (to me) point that the
average unemployment rate over the next 10 years will be what the Fed wants it to be, regardless
of the U.S.-Mexico trade balance, never made it into the public consciousness. (In fact, when
I made that argument at one panel discussion in 1993, a fellow panelist--a NAFTA advocate, as
it happens--exploded in rage: "It's remarks like that that make people hate economists!")
Yes. But please do not interrupt PeterK with reality. He has important work do with his bash all
things Krugman agenda. BTW - it is a riot that he cites Ross Perot on NAFTA. Perot has a self
centered agenda there which Gore exposed. Never trust a corrupt business person whether it is
Perot or Trump.
Yes the model PeterK is using is unclear. He doesn't seem to have a grasp on the economics of
the issues. He seems to think that Sanders is a font of economic wisdom who is not to be questioned.
I would hate to see the left try to make a flawed candidate into the larger than life icon that
the GOP has made out of Reagan.
"Yes the model PeterK is using is unclear. He doesn't seem to have a grasp on the economics of
the issues."
Dean Baker and Jared Bernstein. Like you I want full employment and rising wages. And like
Krugman I am very much an internationalist. I want us to deal fairly with the rest of the world.
We need to cooperate especially in the face of global warming.
1. My first, best solution would be fiscal action. Like everyone else. I prefer Sanders's unicorn
plan of $1 trillion over five years rather than Hillary's plan which is one quarter of the size.
Her plan puts more pressure on the Fed and monetary policy.
a. My preference would be to pay for it with Pigouvian taxes on the rich, corporations, and
the financial sector.
b. if not a, then deficit spending like Trudeau in Canada
C. if the deficit hawks block that, then monetary-financing would be the way around them.
2. close the trade deficit. Dean Baker and Bernstein have written about this a lot. Write currency
agreements into trade deals. If we close the trade deficit and are at full employment, then we
can import more from the rest of the world.
3. If powerful interests block 1. and 2. then lean on monetary policy. Reduce the price of
credit to boost demand. It works as a last resort.
"I would hate to see the left try to make a flawed candidate into the larger than life icon
that the GOP has made out of Reagan.'
I haven't seen any evidence of this. It would be funny if the left made an old Jewish codger
from Brooklyn into an icon. Feel the Bern!!!
Sanders regularly points out it's not about him as President fixing everything, it's about
creating a movement. It's about getting people involved. He can't do it by himself. Obama would
say this too. Elizabeth Warren become popular by saying the same things Sanders is saying.
However to say that the conventional case for trade liberalization relies on the Compensation
Principle isn't quite accurate. The conventional case has traditionally relied on the assertion
that "we" are better off with trade since we could *theoretically* distribute the gains. However,
free trade boosters never seem to get around to worrying about distributing the gains *in practice*.
In practice, free trade is typically justified simply by the net aggregate gain, regardless of
how these gains are distributed or who is hurt in the process.
To my mind, before considering some trade liberalization deal we should FIRST agree to and
implement the redistribution mechanisms and only then reduce barriers. Implementing trade deals
in a backward, half-assed way as has typically been the case often makes "us" worse off than autarky.
"Krugman has at times advocated free markets in contexts where they are often viewed as controversial.
He has ... likened the opposition against free trade and globalization to the opposition against
evolution via natural selection (1996),[167]
(In fact, when I made that argument at one panel discussion in 1993, a fellow panelist--a NAFTA
advocate, as it happens--exploded in rage: "It's remarks like that that make people hate economists!")
[Thanks to electoral politics, we're all fellow panelists now.]
"To me, at least, the idea that changes in demand will normally be offset by Fed policy--so that
they will, on average, have no effect on employment--seems both simple and entirely reasonable.
Yet it is clear that very few people outside the world of academic economics think about things
that way."
As we've seen the Fed is overly fearful of inflation, so the Fed doesn't offset the trade deficit
as quickly as it should. Instead we suffer hysteresis and reduction of potential output.
"The truth is that if Sanders were to make it to the White House, he would find it very hard to
do anything much about globalization - not because it's technically or economically impossible,
but because the moment he looked into actually tearing up existing trade agreements the diplomatic,
foreign-policy costs would be overwhelmingly obvious."
Here Krugman is more honest. We're basically buying off the Chinese, etc. The cost for stopping
this would be less cooperation from the Chinese, etc.
This is new. He never used to say this kind of thing. Instead he'd go after "protectionists"
as luddites.
"This is new. He never used to say this kind of thing. Instead he'd go after "protectionists"
as luddites."
You have Krugman confused with Greg Mankiw. Most real international economics (Mankiw is not
one) recognize the distributional consequences of free trade v. protectionism. Then again - putting
forth the Mankiw uninformed spin is a prerequisite for being on Team Republican. Of course Republicans
will go protectionist whenever it is politically expedient as in that temporary set of steel tariffs.
Helped Bush-Cheney in 2004 and right after that - no tariffs. Funny how that worked.
Where is the "redistribution from government" in the TPP. There isn't any.
Even the NAFTA side agreements on labor and the environment are toothless. The point of these
corporate trade deals is to profit from the lower labor and environmental standards of poorer
countries.
The fact that you resort to calling me a professional Krugman hater means you're not interested
in an actual debate about actual ideas. You've lost the debate and I'm not participating.
One is not allowed to criticize Krugman lest one be labeled a professional Krugman hater?
Your resort to name calling just weakens the case you're making.
You of late have wasted so much space misrepresenting what Krugman has said. Maybe you don't hate
him - maybe you just want to get his attention. For a date maybe. Lord - the troll in you is truly
out of control.
Sandwichman may think Krugman changed his views but if one actually read what he has written over
the years (as opposed to your cherry picking quotes), you might have noticed otherwise. But of
course you want Krugman to look bad. It is what you do.
Sizeable numbers of Americans have seen wages decline in real terms for nearly 20 years. Many/most
parents in many communities do not see a better future before them, or for their children.
Notable quotes:
"... Democracy demands that ballot access rules be selected by referendum, not by the very legacy parties that maintain legislative control by effectively denying ballot access to parties that will pose a challenge to their continued rule. ..."
"... I think the U.S. Party system, in the political science sense, shifted to a new state during George W Bush's administration as, in Kevin Phillip's terms the Republican Party was taken over by Theocrats and Bad Money. ..."
"... My understanding is trumps support disproportionately comes from the small business owning classes, Ie a demographic similar to the petite bourgeoisie who have often been heavily involved in reactionary movements. This gets oversold as "working class" when class is defined by education level rather than income. ..."
"... Racism serves as an organizing principle. Politically, in an oppressive and stultifying hierarchy like the plantation South, racism not incidentally buys the loyalty of subalterns with ersatz status. ..."
"... For a time, the balkanization of American political communities by race, religion and ethnicity was an effective means to the dominance of an tiny elite with ties to an hegemonic community, but it backfired. Dismantling that balkanization has left the country with a very low level of social affiliation and thus a low capacity to organize resistance to elite depredations. ..."
"... Watching Clinton scoop up bankster money, welcome Republicans neocons to the ranks of her supporters does not fill me with hope. ..."
Legislators affiliated with the duopoly parties should not write the rules governing the ballot
access of third parties. This exclusionary rule making amounts to preserving a self-dealing duopoly.
Elections are the interest of the people who vote and those elected should not be able to subvert
the democratic process by acting as a cartel.
Democracy demands that ballot access rules be selected by referendum, not by the very legacy
parties that maintain legislative control by effectively denying ballot access to parties that
will pose a challenge to their continued rule.
Of course any meaningful change would require a voluntary diminishment of power of the duopoly
that now has dictatorial control over ballot access, and who will prevent any Constitutional Amendment
that would enhance the democratic nature of the process.
bruce wilder 08.02.16 at 8:02 pm
I think the U.S. Party system, in the political science sense, shifted to a new state during
George W Bush's administration as, in Kevin Phillip's terms the Republican Party was taken over
by Theocrats and Bad Money.
Ronan(rf) 08.04.16 at 10:35 pm
"I generally don't give a shit about polls so I have no "data" to evidence this claim,
but my guess is the majority of Trump's support comes from this broad middle"
My understanding is trumps support disproportionately comes from the small business owning
classes, Ie a demographic similar to the petite bourgeoisie who have often been heavily involved
in reactionary movements. This gets oversold as "working class" when class is defined by education
level rather than income.
This would make some sense as they are generally in economically unstable jobs, they tend to
be hostile to both big govt (regulations, freeloaders) and big business (unfair competition),
and while they (rhetorically at least) tend to value personal autonomy and self sufficiency ,
they generally sell into smaller, local markets, and so are particularly affected by local demographic
and cultural change , and decline. That's my speculation anyway.
bruce wilder 08.06.16 at 4:28 pm
I am somewhat suspicious of leaving dominating elites out of these stories of racism as an
organizing principle for political economy or (cultural) community.
Racism served the purposes of a slaveholding elite that organized political communities to
serve their own interests. (Or, vis a vis the Indians a land-grab or genocide.)
Racism serves as an organizing principle. Politically, in an oppressive and stultifying
hierarchy like the plantation South, racism not incidentally buys the loyalty of subalterns with
ersatz status. The ugly prejudices and resentful arrogance of working class whites is thus
a component of how racism works to organize a political community to serve a hegemonic master
class. The business end of racism, though, is the autarkic poverty imposed on the working communities:
slaves, sharecroppers, poor blacks, poor whites - bad schools, bad roads, politically disabled
communities, predatory institutions and authoritarian governments.
For a time, the balkanization of American political communities by race, religion and ethnicity
was an effective means to the dominance of an tiny elite with ties to an hegemonic community,
but it backfired. Dismantling that balkanization has left the country with a very low level of
social affiliation and thus a low capacity to organize resistance to elite depredations.
bruce wilder 08.06.16 at 4:31 pm
Watching Clinton scoop up bankster money, welcome Republicans neocons to the ranks of her
supporters does not fill me with hope.
Trump and the other illiberal populists have been benefiting from three overlapping backlashes.
The first is cultural. Movements for civil liberties have been remarkably successful over the
last 40 years. Women, ethnic and religious minorities, and the LGBTQ community have secured important
gains at a legal and cultural level. It is remarkable, for instance, how quickly same-sex marriage
has become legal in more than 20 countries when no country recognized it before 2001.
Resistance has always existed to these movements to expand the realm of civil liberties. But this
backlash increasingly has a political face. Thus the rise of parties that challenge multiculturalism
and immigration in Europe, the movements throughout Africa and Asia that support the majority over
the minorities, and the Trump/Tea Party takeover of the Republican Party with their appeals to primarily
white men.
The second backlash is economic. The globalization of the economy has created a class of enormously
wealthy individuals (in the financial, technology, and communications sectors). But globalization
has left behind huge numbers of low-wage workers and those who have watched their jobs relocate to
other countries.
Illiberal populists have directed all that anger on the part of people left behind by the world
economy at a series of targets: bankers who make billions, corporations that are constantly looking
for even lower-wage workers, immigrants who "take away our jobs," and sometimes ethnic minorities
who function as convenient scapegoats. The targets, in other words, include both the very powerful
and the very weak.
The third backlash, and perhaps the most consequential, is political. It's not just that people
living in democracies are disgusted with their leaders and the parties they represent. Rather, as
political scientists Roberto Stefan Foa and Yascha Mounk
write in the Journal of Democracy , "they have also become more cynical about the value
of democracy as a political system, less hopeful that anything they do might influence public policy,
and more willing to express support for authoritarian alternatives."
Foa and Mounk are using 20 years of data collected from surveys of citizens in Western Europe
and North America the democracies with the greatest longevity. And they have found that support
for illiberal alternatives is greater among the younger generation than the older one. In other countries
outside Europe and North America, the disillusionment with democratic institutions often takes the
form of a preference for a powerful leader who can break the rules if necessary to preserve order
and stability like Putin in Russia or Abdel Fattah el-Sisi in Egypt or Prayuth Chan-ocha in Thailand.
These three backlashes cultural, economic, political are also anti-internationalist because
international institutions have become associated with the promotion of civil liberties and human
rights, the greater globalization of the economy, and the constraint of the sovereignty of nations
(for instance, through the European Union or the UN's "responsibility to protect" doctrine).
... ... ....
The current political order is coming apart. If we don't come up with a fair, Green, and internationalist
alternative, the illiberal populists will keep winning. John Feffer is the director of Foreign
Policy In Focus.
"... if neo-liberalism is partly defined by the free flow of goods, labor and capital - and that has been the Republican agenda since at least Reagan - how is Trump a continuation of the same tradition?" ..."
"... Trump is a conservative (or right populist, or whatever), and draws on that tradition. He's not a neoliberal. ..."
"... Trump is too incoherent to really represent the populist view. He's consistent w/the trade and immigration views but (assuming you can actually figure him out) wrong on banks, taxes, etc. ..."
"... But the next populists we see might be more full bore. When that happens, you'll see much more overlap w/Sanders economic plans for the middle class. ..."
"... There's always tension along the lead running between the politician and his constituents. The thing that seems most salient to me at the present moment is the sense of betrayal pervading our politics. At least since the GFC of 2008, it has been hard to deny that the two Parties worked together to set up an economic betrayal. And, the long-running saga of the wars in Iraq and Afghanistan also speak to elite failure, as well as betrayal. ..."
"... Trump is a novelty act. He represents a chance for people who feel resentful without knowing much of anything about anything to cast a middle-finger vote. They wouldn't be willing to do that, if times were really bad, instead of just disappointing and distressing. ..."
"... There's also the fact Reagan tapped a fair number of Nixon people, as did W years later. Reagan went after Nixon in the sense of running against him, and taking the party in a much more hard-right direction, sure. But he was repudiated largely because he got caught doing dirty tricks with his pants down. ..."
"... From what I can tell - the 1972 election gave the centrists in the democratic party power to discredit and marginalize the anti-war left, and with it, the left in general. ..."
"... Ready even now to whine that she's a victim and that the whole community is at fault and that people are picking on her because she's a woman, rather than because she has a habit of making accusations like this every time she comments. ..."
"... That is a perfect example of predatory "solidarity". Val is looking for dupes to support her ..."
"Once again, if neo-liberalism is partly defined by the free flow of goods, labor and capital
- and that has been the Republican agenda since at least Reagan - how is Trump a continuation
of the same tradition?"
You have to be willing to see neoliberalism as something different
from conservatism to have the answer make any sense. John Quiggin has written a good deal here
about a model of U.S. politics as being divided into left, neoliberal, and conservative. Trump
is a conservative (or right populist, or whatever), and draws on that tradition. He's not a neoliberal.
... ... ...
T 08.12.16 at 5:52 pm
RP @683
That's a bit of my point. I think Corey has defined the Republican tradition solely
in response to the Southern Strategy that sees a line from Nixon (or Goldwater) to Trump. But
that gets the economics wrong and the foreign policy too - the repub foreign policy view has not
been consistent across administrations and Trump's economic pans (to the extent he has a plan)
are antithetical to the Nixon W tradition. I have viewed post-80 Dem administrations as neoliberals
w/transfers and Repub as neoliberals w/o transfers.
Trump is too incoherent to really represent the populist view. He's consistent w/the trade
and immigration views but (assuming you can actually figure him out) wrong on banks, taxes, etc.
But the next populists we see might be more full bore. When that happens, you'll see much
more overlap w/Sanders economic plans for the middle class. Populists have nothing against
gov't programs like SS and Medicare and were always for things like the TVA and infrastructure
spending. Policies aimed at the poor and minorities not so much.
T @ 685: Trump is too incoherent to really represent the populist view.
There's always tension along the lead running between the politician and his constituents.
The thing that seems most salient to me at the present moment is the sense of betrayal pervading
our politics. At least since the GFC of 2008, it has been hard to deny that the two Parties worked
together to set up an economic betrayal. And, the long-running saga of the wars in Iraq and Afghanistan
also speak to elite failure, as well as betrayal.
These are the two most unpopular candidates in living memory. That is different.
I am not a believer in "the fire next time". Trump is a novelty act. He represents a chance
for people who feel resentful without knowing much of anything about anything to cast a middle-finger
vote. They wouldn't be willing to do that, if times were really bad, instead of just disappointing
and distressing.
Nor will Sanders be back. His was a last New Deal coda. There may be second acts in American
life, but there aren't 7th acts.
If there's a populist politics in our future, it will have to have a much sharper edge. It
can talk about growth, but it has to mean smashing the rich and taking their stuff. There's very
rapidly going to come a point where there's no other option, other than just accepting cramdown
by the authoritarian surveillance state built by the neoliberals. that's a much taller order than
Sanders or Trump have been offering.<
Corey, you write: "It's not just that the Dems went after Nixon, it's also that Nixon had so few
allies. People on the right were furious with him because they felt after this huge ratification
that the country had moved to the right, Nixon was still governing as if the New Deal were the
consensus. So when the time came, he had very few defenders, except for loyalists like Leonard
Garment and G. Gordon Liddy. And Al Haig, God bless him."
You've studied this more than I have,
but this is at least somewhat at odds with my memory. I recall some prominent attackers of Nixon
from the Republican party that were moderates, at least one of whom was essentially kicked out
of the party for being too liberal in later years. There's also the fact Reagan tapped a fair
number of Nixon people, as did W years later. Reagan went after Nixon in the sense of running
against him, and taking the party in a much more hard-right direction, sure. But he was repudiated
largely because he got caught doing dirty tricks with his pants down.
To think that something similar would happen to Clinton (watergate like scandal) that would
actually have a large portion of the left in support of impeachment, she would have to be as dirty
as Nixon was, *and* the evidence to really put the screws to her would have to be out, as it was
against Nixon during watergate.
OTOH, my actual *hope* would be that a similar left-liberal sea change comparable to 1980 from
the right would be plausible. I don't think a 1976-like interlude is plausible though, that would
require the existence of a moderate republican with enough support within their own party to win
the nomination. I suppose its possible that such a beast could come to exist if Trump loses a
landslide, but most of the plausible candidates have already left or been kicked out of the party.
From what I can tell - the 1972 election gave the centrists in the democratic party power
to discredit and marginalize the anti-war left, and with it, the left in general. A comparable
election from the other side would give republican centrists/moderates the ability to discredit
and marginalize the right wing base. But unlike Democrats in 1972, there aren't any moderates
left in the Republican party by my lights. I'm much more concerned that this will simply re-empower
the hard-core conservatives with plausbly-deniable dog-whistle racism who are now the "moderates",
and enable them to whitewash their history.
Unfortunately, unlike you, I'm not convinced that a landslide is possible without an appeal
to Reagan/Bush republicans. I don't think we're going to see a meaningful turn toward a real left
until Democrats can win a majority of statehouses and clean up the ridiculous gerrymandering.
Val: "Similarly with your comments on "identity politics" where you could almost be seen
by MRAs and white supremacists as an ally, from the tone of your rhetoric."
That is 100% perfect Val. Insinuates that BW is a sort-of-ally of white supremacists - an infuriating
insinuation. Does this insinuation based on a misreading of what he wrote. Completely resistant
to any sort of suggestion that what she dishes out so expansively to others had better be something
she should be willing to accept herself, or that she shouldn't do it. Ready even now to whine
that she's a victim and that the whole community is at fault and that people are picking on her
because she's a woman, rather than because she has a habit of making accusations like this every
time she comments.
That is a perfect example of predatory "solidarity". Val is looking for dupes to support
her - for people to jump in saying "Why are you being hostile to women?" in response to people's
response to her comment.
"... More than a dozen Republican rivals, described as the strongest GOP field since 1980, were sent packing. This was the year Americans rose up to pull down the establishment in a peaceful storming of the American Bastille. ..."
"... If 2016 taught us anything, it is that if the establishment's hegemony is imperiled, it will come together in ferocious solidarity - for the preservation of their perks, privileges and power. All the elements of that establishment - corporate, cultural, political, media - are today issuing an ultimatum to Middle America: Trump is unacceptable. Instructions are going out to Republican leaders that either they dump Trump, or they will cease to be seen as morally fit partners in power. ..."
"... Our CIA, NGOs and National Endowment for Democracy all beaver away for "regime change" in faraway lands whose rulers displease us. How do we effect "regime change" here at home? ..."
"... Donald Trump's success, despite the near-universal hostility of the media, even much of the conservative media, was due in large part to the public's response to the issues he raised. ..."
"I'm afraid the election is going to be rigged," Donald Trump told voters
in Ohio and Sean Hannity on Fox News. And that hit a nerve.
"Dangerous," "toxic," came the recoil from the media.
Trump is threatening to "delegitimize" the election results of 2016.
Well, if that is what Trump is trying to do, he has no small point. For consider
what 2016 promised and what it appears about to deliver.
This longest of election cycles has rightly been called the Year of the Outsider.
It was a year that saw a mighty surge of economic populism and patriotism, a
year when a 74-year-old Socialist senator set primaries ablaze with mammoth
crowds that dwarfed those of Hillary Clinton.
It was the year that a non-politician, Donald Trump, swept Republican primaries
in an historic turnout, with his nearest rival an ostracized maverick in his
own Republican caucus, Senator Ted Cruz.
More than a dozen Republican rivals, described as the strongest GOP field
since 1980, were sent packing. This was the year Americans rose up to pull down
the establishment in a peaceful storming of the American Bastille.
But if it ends with a Clintonite restoration and a ratification of the same
old Beltway policies, would that not suggest there is something fraudulent about
American democracy, something rotten in the state?
If 2016 taught us anything, it is that if the establishment's hegemony
is imperiled, it will come together in ferocious solidarity - for the preservation
of their perks, privileges and power. All the elements of that establishment
- corporate, cultural, political, media - are today issuing an ultimatum to
Middle America: Trump is unacceptable. Instructions are going out to Republican
leaders that either they dump Trump, or they will cease to be seen as morally
fit partners in power.
It testifies to the character of Republican elites that some are seeking
ways to carry out these instructions, though this would mean invalidating and
aborting the democratic process that produced Trump.
But what is a repudiated establishment doing issuing orders to anyone?
Why is it not Middle America issuing the demands, rather than the other way
around?
Specifically, the Republican electorate should tell its discredited and rejected
ruling class: If we cannot get rid of you at the ballot box, then tell us how,
peacefully and democratically, we can be rid of you?
You want Trump out? How do we get you out? The Czechs had their Prague Spring.
The Tunisians and Egyptians their Arab Spring. When do we have our American
Spring? The Brits had their "Brexit," and declared independence of an arrogant
superstate in Brussels. How do we liberate ourselves from a Beltway superstate
that is more powerful and resistant to democratic change?
Our CIA, NGOs and National Endowment for Democracy all beaver away for
"regime change" in faraway lands whose rulers displease us. How do we effect
"regime change" here at home?
Donald Trump's success, despite the near-universal hostility of the media,
even much of the conservative media, was due in large part to the public's response
to the issues he raised.
He called for sending illegal immigrants back home, for securing America's
borders, for no amnesty. He called for an America First foreign policy to
keep us out of wars that have done little but bleed and bankrupt us.
He called for an economic policy where the Americanism of the people
replaces the globalism of the transnational elites and their K Street lobbyists
and congressional water carriers.
He denounced NAFTA, and the trade deals and trade deficits with China,
and called for rejection of the Trans-Pacific Partnership.
By campaign's end, he had won the argument on trade, as Hillary Clinton was
agreeing on TPP and confessing to second thoughts on NAFTA.
But if TPP is revived at the insistence of the oligarchs of Wall Street,
the Business Roundtable, the U.S. Chamber of Commerce - backed by conscript
editorial writers for newspapers that rely on ad dollars - what do elections
really mean anymore?
And if, as the polls show we might, we get Clinton - and TPP, and amnesty,
and endless migrations of Third World peoples who consume more tax dollars than
they generate, and who will soon swamp the Republicans' coalition - what was
2016 all about?
Would this really be what a majority of Americans voted for in this most
exciting of presidential races?
"Those who make peaceful revolution impossible will make violent revolution
inevitable," said John F. Kennedy.
The 1960s and early 1970s were a time of social revolution in America, and
President Nixon, by ending the draft and ending the Vietnam war, presided over
what one columnist called the "cooling of America."
But if Hillary Clinton takes power, and continues America on her present
course, which a majority of Americans rejected in the primaries, there is going
to be a bad moon rising.
And the new protesters in the streets will not be overprivileged children
from Ivy League campuses.
"... the capitalist economy is more and more an asset driven one. This article does not even begin to address the issue of asset valuations, the explicit CB support for asset inflation and the effect on inequality, and especially generational plunder. ..."
"... the problem of living standards is obviously a Malthusian one. despite all the progress of social media tricks, we cannot fool nature. the rate of ecological degradation is alarming, and now irreversible. "the market" is now moving rapidly to real assets. This will eventually lead to war as all war is eventually for resources. ..."
No matter what central banks do, their actions will not be able to create the same level of
economic growth that we have become used to over the past seven decades.
Economic growth does not come from the central banks; if government sought to provide the basics
for all its citizens, including health care, education, a home, and proper food and all the infrastructure
needed to give people the basics, then you could have something akin to "growth" while at the
same time making life more pleasant for the less fortunate. There seems to be no definition of
economic growth that includes everyone.
This seems a very elaborate way of stating a simple problem, that can be summarised in three
points.
The living standards of most people have fallen over the last thirty years or so because of
the impact of neoliberal economic policies. Conventional politicians are promising only more
of the same. Therefore people are increasingly voting for non-conventional politicians.
Neoliberalism has only exacerbated falling living standards. Living standards would be falling
even without it, albeit more gradually.
Neoliberalism itself may even be nothing more than a standard type response of species that
have expanded beyond the capacity of their environment to support them. What we see as an evil
ideology is only the expression of a mechanism that apportions declining resources to the elites,
like shutting shutting down the periphery so the core can survive as in hypothermia.
I really don't have problem with this. Let the financial sector run the world into the ground
and get it over with.
In defference to a great many knowledgable commentors here that work in the FIRE sector, I
don't want to create a damning screed on the cost of servicing money, but at some point even the
most considered opinions have to acknowledge that that finance is flooded with *talent* which
creates a number of problems; one being a waste of intellect and education in a field that doesn't
offer much of a return when viewed in an egalitarian sense, secondly; as the field grows due to,
the technical advances, the rise in globilization, and the security a financial occuptaion offers
in an advanced first world country nowadays, it requires substantially more income to be devoted
to it's function.
This income has to be derived somewhere, and the required sacrifices on every facet of a global
economy to bolster positions and maintain asset prices has precipitated this decline in the well
being of peoples not plugged-in to the consumer capitalist regime and dogma.
Something has to give here, and I honestly couldn't care about your 401k or home resale value,
you did this to yourself as much as those day-traders who got clobbered in the dot-com crash.
the capitalist economy is more and more an asset driven one. This article does not even
begin to address the issue of asset valuations, the explicit CB support for asset inflation and
the effect on inequality, and especially generational plunder.
the problem of living standards is obviously a Malthusian one. despite all the progress
of social media tricks, we cannot fool nature. the rate of ecological degradation is alarming,
and now irreversible. "the market" is now moving rapidly to real assets. This will eventually
lead to war as all war is eventually for resources.
"... You can see what I mean when you visit Fall River, an old mill town 50 miles south of Boston. Median household income in that city is $33,000, among the lowest in the state; unemployment is among the highest, 15% in March 2014, nearly five years after the recession ended. Twenty-three percent of Fall River's inhabitants live in poverty. The city lost its many fabric-making concerns decades ago and with them it lost its reason for being. People have been deserting the place for decades. ..."
"... Many of the empty factories in which their ancestors worked are still standing, however. Solid nineteenth-century structures of granite or brick, these huge boxes dominate the city visually - there always seems to be one or two of them in the vista, contrasting painfully with whatever colorful plastic fast-food joint has been slapped up next door. ..."
"... The effect of all this is to remind you with every prospect that this is a place and a way of life from which the politicians have withdrawn their blessing. Like so many other American scenes, this one is the product of decades of deindustrialization, engineered by Republicans and rationalized by Democrats. This is a place where affluence never returns - not because affluence for Fall River is impossible or unimaginable, but because our country's leaders have blandly accepted a social order that constantly bids down the wages of people like these while bidding up the rewards for innovators, creatives, and professionals. ..."
"... Boston boasts a full-blown Innovation District, a disused industrial neighborhood that has actually been zoned creative - a projection of the post-industrial blue-state ideal onto the urban grid itself. ..."
"... Innovation liberalism is "a liberalism of the rich," to use the straightforward phrase of local labor leader Harris Gruman. This doctrine has no patience with the idea that everyone should share in society's wealth. What Massachusetts liberals pine for, by and large, is a more perfect meritocracy - a system where the essential thing is to ensure that the truly talented get into the right schools and then get to rise through the ranks of society. Unfortunately, however, as the blue-state model makes painfully clear, there is no solidarity in a meritocracy. The ideology of educational achievement conveniently negates any esteem we might feel for the poorly graduated. ..."
"... GE will move 800 jobs to Mass.with a tax incentive of $145,000,000. http://www.nytimes.com/2016/01/14/technology/ge-boston-headquarters.html?_r=0 This comes to over $181,000 per job. ..."
"... Attributed to Marx that capitalists will sell communists the ropes with which to hang them but probably should be updated that Dems will hang the poor to make the capitalists richer . ..."
"... Two parties (many of whose members genuinely hate each other). One system. ..."
"... The Clinton Bush Establishment Party is just about dividing the spoils. They don't need 320 million people it will work with 30 million or less ..."
"... They hate each other because they compete for the same corporate money. ..."
"... As soon as you bring the social issues into that group, the group will start to fracture, losing strength until it no longer has that majority. This is how the elite's divide-and-conquer strategy works. ..."
"... This is Nader's two headed snake. The parties can differentiate on God, guns and gays as long as they both agree to corporate control of the economy. This is the Clinton Third Way legacy that left the Democrats kowtowing to the corporate elites. Hillary continues this tradition. ..."
"... Education and healthcare as rights are "unrealistic" in the richest nation the world has ever seen for Hillary. Even while every other advanced nation on the planet provides for it. Why is it unrealistic? Maybe because it will cut into corporate profits. ..."
"... I heard a self-identified "blue-collar conservative" express it this way: "the republicans always talking about Jesus, but they never try to help the people our Lord cared about. People who are sick, in jail, whatever." ..."
"... Deindustrialization has been occurring in all advanced OECD nations for the last 40 years, including before and after trade liberalization, before NAFTA, the WTO, Most-Favored Nation Status for China, in countries with strong interventionist industrial policy, and even in countries with strong labor unions. ..."
"... Robert Putnam, Our Kids: The American Dream in Crisis, writes that "Growing class segregation means that rich Americans and poor Americans are living, learning, and raising children in increasingly separate and unequal worlds, removing the stepping-stones to upward mobility." ..."
"... "Long ago it was said that "one half of the world does not know how the other half lives." That was true then. It did not know because it did not care. The half that was on top cared little for the struggles, and less for the fate of those who were underneath, so long as it was able to hold them there and keep its own seat. There came a time when the discomfort and consequent upheavals so violent, that it was no longer an easy thing to do, and then the upper half fell to inquiring what was the matter. Information on the subject has been accumulating rapidly since, and the whole world has had its hands full answering for its old ignorance." Jacob A. Riis, How the Other Half Lives ..."
By Thomas Frank, author of the just-published
Listen,
Liberal, or What Ever Happened to the Party of the People? (Metropolitan Books) from which this
essay is adapted. He has also written Pity the Billionaire , The Wrecking Crew , and What's the Matter
With Kansas? among other works. He is the founding editor of The Baffler . Originally published at
TomDispatch
When you press Democrats on their uninspiring deeds - their lousy free trade deals, for example,
or their flaccid response to Wall Street misbehavior - when you press them on any of these things,
they automatically reply that this is the best anyone could have done. After all, they had to deal
with those awful Republicans, and those awful Republicans wouldn't let the really good stuff get
through. They filibustered in the Senate. They gerrymandered the congressional districts. And besides,
change takes a long time. Surely you don't think the tepid-to-lukewarm things Bill Clinton and Barack
Obama have done in Washington really represent the fiery Democratic soul.
So let's go to a place that does. Let's choose a locale where Democratic rule is virtually unopposed,
a place where Republican obstruction and sabotage can't taint the experiment.
Let's go to Boston, Massachusetts, the spiritual homeland of the professional class and a place
where the ideology of modern liberalism has been permitted to grow and flourish without challenge
or restraint. As the seat of American higher learning, it seems unsurprising that Boston should anchor
one of the most Democratic of states, a place where elected Republicans (like the new governor) are
highly unusual. This is the city that virtually invented the blue-state economic model, in which
prosperity arises from higher education and the knowledge-based industries that surround it.
The coming of post-industrial society has treated this most ancient of American cities extremely
well. Massachusetts routinely occupies the number one spot on the State New Economy Index, a measure
of how "knowledge-based, globalized, entrepreneurial, IT-driven, and innovation-based" a place happens
to be. Boston ranks high on many of Richard Florida's statistical indices of approbation - in 2003,
it was number one on the "creative class index," number three in innovation and in high tech - and
his many books marvel at the city's concentration of venture capital, its allure to young people,
or the time it enticed some firm away from some unenlightened locale in the hinterlands.
Boston's knowledge economy is the best, and it is the oldest. Boston's metro area encompasses
some 85 private colleges and universities, the greatest concentration of higher-ed institutions in
the country - probably in the world. The region has all the ancillary advantages to show for this:
a highly educated population, an unusually large number of patents, and more Nobel laureates than
any other city in the country.
The city's Route 128 corridor was the original model for a suburban tech district, lined ever
since it was built with defense contractors and computer manufacturers. The suburbs situated along
this golden thoroughfare are among the wealthiest municipalities in the nation, populated by engineers,
lawyers, and aerospace workers. Their public schools are excellent, their downtowns are cute, and
back in the seventies their socially enlightened residents were the prototype for the figure of the
"suburban liberal."
Another prototype: the Massachusetts Institute of Technology, situated in Cambridge, is where
our modern conception of the university as an incubator for business enterprises began. According
to a report on MIT's achievements in this category, the school's alumni have started nearly 26,000
companies over the years, including Intel, Hewlett Packard, and Qualcomm. If you were to take those
26,000 companies as a separate nation, the report tells us, its economy would be one of the most
productive in the world.
Then there are Boston's many biotech and pharmaceutical concerns, grouped together in what is
known as the "life sciences super cluster," which, properly understood, is part of an "ecosystem"
in which PhDs can "partner" with venture capitalists and in which big pharmaceutical firms can acquire
small ones. While other industries shrivel, the Boston super cluster grows, with the life-sciences
professionals of the world lighting out for the Athens of America and the massive new "innovation
centers" shoehorning themselves one after the other into the crowded academic suburb of Cambridge.
To think about it slightly more critically, Boston is the headquarters for two industries that
are steadily bankrupting middle America: big learning and big medicine, both of them imposing costs
that everyone else is basically required to pay and which increase at a far more rapid pace than
wages or inflation. A thousand dollars a pill, 30 grand a semester: the debts that are gradually
choking the life out of people where you live are what has made this city so very rich.
Perhaps it makes sense, then, that another category in which Massachusetts ranks highly
is inequality. Once the visitor leaves the brainy bustle of Boston, he discovers
that this state is filled with wreckage - with former manufacturing towns in which workers watch
their way of life draining away, and with cities that are little more than warehouses for people
on Medicare. According to one survey, Massachusetts has the eighth-worst rate of income inequality
among the states; by another metric it ranks fourth. However you choose to measure the diverging
fortunes of the country's top 10% and the rest, Massachusetts always seems to finish among the nation's
most unequal places.
Seething City on a Cliff
You can see what I mean when you visit Fall River, an old mill town 50 miles south of Boston.
Median household income in that city is $33,000, among the lowest in the state; unemployment is among
the highest, 15% in March 2014, nearly five years after the recession ended. Twenty-three percent
of Fall River's inhabitants live in poverty. The city lost its many fabric-making concerns decades
ago and with them it lost its reason for being. People have been deserting the place for decades.
Many of the empty factories in which their ancestors worked are still standing, however. Solid
nineteenth-century structures of granite or brick, these huge boxes dominate the city visually -
there always seems to be one or two of them in the vista, contrasting painfully with whatever colorful
plastic fast-food joint has been slapped up next door.
Most of the old factories are boarded up, unmistakable emblems of hopelessness right up to the
roof. But the ones that have been successfully repurposed are in some ways even worse, filled as
they often are with enterprises offering cheap suits or help with drug addiction. A clinic in the
hulk of one abandoned mill has a sign on the window reading simply "Cancer & Blood."
The effect of all this is to remind you with every prospect that this is a place and a way
of life from which the politicians have withdrawn their blessing. Like so many other American scenes,
this one is the product of decades of deindustrialization, engineered by Republicans and rationalized
by Democrats. This is a place where affluence never returns - not because affluence for Fall River
is impossible or unimaginable, but because our country's leaders have blandly accepted a social order
that constantly bids down the wages of people like these while bidding up the rewards for innovators,
creatives, and professionals.
Even the city's one real hope for new employment opportunities - an Amazon warehouse that
is now in the planning stages - will serve to lock in this relationship. If all goes according to
plan, and if Amazon sticks to the practices it has pioneered elsewhere, people from Fall River will
one day get to do exhausting work with few benefits while being electronically monitored for efficiency,
in order to save the affluent customers of nearby Boston a few pennies when they buy books or electronics.
But that is all in the future. These days, the local newspaper publishes an endless stream of
stories about drug arrests, shootings, drunk-driving crashes, the stupidity of local politicians,
and the lamentable surplus of "affordable housing." The town is up to its eyeballs in wrathful bitterness
against public workers. As in: Why do they deserve a decent life when the rest of us have no chance
at all? It's every man for himself here in a "competition for crumbs," as a Fall River friend puts
it.
The Great Entrepreneurial Awakening
If Fall River is pocked with empty mills, the streets of Boston are dotted with facilities intended
to make innovation and entrepreneurship easy and convenient. I was surprised to discover, during
the time I spent exploring the city's political landscape, that Boston boasts a full-blown Innovation
District, a disused industrial neighborhood that has actually been zoned creative - a projection
of the post-industrial blue-state ideal onto the urban grid itself. The heart of the neighborhood
is a building called "District Hall" - "Boston's New Home for Innovation" - which appeared to me
to be a glorified multipurpose room, enclosed in a sharply angular faηade, and sharing a roof with
a restaurant that offers "inventive cuisine for innovative people." The Wi-Fi was free, the screens
on the walls displayed famous quotations about creativity, and the walls themselves were covered
with a high-gloss finish meant to be written on with dry-erase markers; but otherwise it was not
much different from an ordinary public library. Aside from not having anything to read, that is.
This was my introduction to the innovation infrastructure of the city, much of it built up by
entrepreneurs shrewdly angling to grab a piece of the entrepreneur craze. There are "co-working"
spaces, shared offices for startups that can't afford the real thing. There are startup "incubators"
and startup "accelerators," which aim to ease the innovator's eternal struggle with an uncaring public:
the Startup Institute, for example, and the famous MassChallenge, the "World's Largest Startup Accelerator,"
which runs an annual competition for new companies and hands out prizes at the end.
And then there are the innovation Democrats, led by former Governor Deval Patrick, who presided
over the Massachusetts government from 2007 to 2015. He is typical of liberal-class leaders; you
might even say he is their most successful exemplar. Everyone seems to like him, even his opponents.
He is a witty and affable public speaker as well as a man of competence, a highly educated technocrat
who is comfortable in corporate surroundings. Thanks to his upbringing in a Chicago housing project,
he also understands the plight of the poor, and (perhaps best of all) he is an honest politician
in a state accustomed to wide-open corruption. Patrick was also the first black governor of Massachusetts
and, in some ways, an ideal Democrat for the era of Barack Obama - who, as it happens, is one of
his closest political allies.
As governor, Patrick became a kind of missionary for the innovation cult. "The Massachusetts economy
is an innovation economy," he liked to declare, and he made similar comments countless times, slightly
varying the order of the optimistic keywords: "Innovation is a centerpiece of the Massachusetts economy,"
et cetera. The governor opened "innovation schools," a species of ramped-up charter school. He signed
the "Social Innovation Compact," which had something to do with meeting "the private sector's need
for skilled entry-level professional talent." In a 2009 speech called "The Innovation Economy," Patrick
elaborated the political theory of innovation in greater detail, telling an audience of corporate
types in Silicon Valley about Massachusetts's "high concentration of brainpower" and "world-class"
universities, and how "we in government are actively partnering with the private sector and the universities,
to strengthen our innovation industries."
What did all of this inno-talk mean? Much of the time, it was pure applesauce - standard-issue
platitudes to be rolled out every time some pharmaceutical company opened an office building somewhere
in the state.
On some occasions, Patrick's favorite buzzword came with a gigantic price tag, like the billion
dollars in subsidies and tax breaks that the governor authorized in 2008 to encourage pharmaceutical
and biotech companies to do business in Massachusetts. On still other occasions, favoring inno has
meant bulldozing the people in its path - for instance, the taxi drivers whose livelihoods are being
usurped by ridesharing apps like Uber. When these workers staged a variety of protests in the Boston
area, Patrick intervened decisively on the side of the distant software company. Apparently convenience
for the people who ride in taxis was more important than good pay for people who drive those taxis.
It probably didn't hurt that Uber had hired a former Patrick aide as a lobbyist, but the real point
was, of course, innovation: Uber was the future, the taxi drivers were the past, and the path for
Massachusetts was obvious.
A short while later, Patrick became something of an innovator himself. After his time as governor
came to an end last year, he won a job as a managing director of Bain Capital, the private equity
firm that was founded by his predecessor Mitt Romney - and that had been so powerfully denounced
by Democrats during the 2012 election. Patrick spoke about the job like it was just another startup:
"It was a happy and timely coincidence I was interested in building a business that Bain was also
interested in building," he told the Wall Street Journal . Romney reportedly phoned him with
congratulations.
Entrepreneurs First
At a 2014 celebration of Governor Patrick's innovation leadership, Google's Eric Schmidt announced
that "if you want to solve the economic problems of the U.S., create more entrepreneurs." That sort
of sums up the ideology in this corporate commonwealth: Entrepreneurs first. But how has such a doctrine
become holy writ in a party dedicated to the welfare of the common man? And how has all this come
to pass in the liberal state of Massachusetts?
The answer is that I've got the wrong liberalism. The kind of liberalism that has dominated Massachusetts
for the last few decades isn't the stuff of Franklin Roosevelt or the United Auto Workers; it's the
Route 128/suburban-professionals variety. (Senator Elizabeth Warren is the great exception to this
rule.) Professional-class liberals aren't really alarmed by oversized rewards for society's winners.
On the contrary, this seems natural to them - because they are society's winners. The liberalism
of professionals just does not extend to matters of inequality; this is the area where soft hearts
abruptly turn hard.
Innovation liberalism is "a liberalism of the rich," to use the straightforward phrase of
local labor leader Harris Gruman. This doctrine has no patience with the idea that everyone should
share in society's wealth. What Massachusetts liberals pine for, by and large, is a more perfect
meritocracy - a system where the essential thing is to ensure that the truly talented get into the
right schools and then get to rise through the ranks of society. Unfortunately, however, as the blue-state
model makes painfully clear, there is no solidarity in a meritocracy. The ideology of educational
achievement conveniently negates any esteem we might feel for the poorly graduated.
This is a curious phenomenon, is it not? A blue state where the Democrats maintain transparent
connections to high finance and big pharma; where they have deliberately chosen distant software
barons over working-class members of their own society; and where their chief economic proposals
have to do with promoting "innovation," a grand and promising idea that remains suspiciously vague.
Nor can these innovation Democrats claim that their hands were forced by Republicans. They came up
with this program all on their own.
When Massachusetts officials put on a luncheon feting General Electric CEO Jeffrey Immelt
last week, they were celebrating the company's decision to accept hundreds of millions of dollars
worth of taxpayer incentives and move to the state. At the same time, however, GE is not backing
off its refusal to fully remove the toxins it dumped in one of Massachusetts' largest waterways.
"What does GE's headquarters bring? There are the jobs, for sure. About 800 people work
at the Fairfield headquarters. Its new Boston office will include 200 corporate jobs and about
600 tech-oriented jobs: designers, programmers and the like."
"But GE is closing down a valve factory in Avon, eliminating roughly 300 local, largely
blue-collar jobs - and shifting the work that's done there to a new plant in Florida."
Sorry about multiple replies but decided to check out the valve plant move. GE got a $15,400,000
tax incentive from Florida and Jacksonville for making the move.
"I grew up in a family that struggled to get a job,"(Gov.)Scott said during his stop at
the JAX Chamber's office in downtown. "My parents struggled to get jobs. It's the most important
thing you can do for a family."
The race to the bottom is obvious. Middle class tax payers make up for tax losses due to these
incentives. Taking jobs away from middle class people in Massachusetts to give them to middle
class people in Florida just so a giant multinational can cut its tax load is nothing to be proud
of.
Thanks for the links Pookah, and of course, you bring up a great point the lack of examination
of how much these jobs cost, and who the JOBS are FOR, and who is actually paying for them.
Attributed to Marx that capitalists will sell communists the ropes with which to hang them
but probably should be updated that Dems will hang the poor to make the capitalists richer .
I guess, the expression: "the D's are no better than the R's" can never be repeated enough.
And certainly the concrete evidence of Massachusetts, putting the lie to the nonsense of "the
Republicans made us do it" (sook-sook) is useful.
But, I feel sure, most NC readers are way beyond discussion of the character and differences
between the kabuki appearances of the one sorry, TWO institutional business parties.
I feel for people on the wrong side of our social issues, but the fact is that you're never
going to come up wit a governing majority unless you are talking about putting food on the dinner
table.
As soon as you bring the social issues into that group, the group will start to fracture,
losing strength until it no longer has that majority. This is how the elite's divide-and-conquer
strategy works.
This is Nader's two headed snake. The parties can differentiate on God, guns and gays as
long as they both agree to corporate control of the economy. This is the Clinton Third Way legacy
that left the Democrats kowtowing to the corporate elites. Hillary continues this tradition.
Education and healthcare as rights are "unrealistic" in the richest nation the world has
ever seen for Hillary. Even while every other advanced nation on the planet provides for it. Why
is it unrealistic? Maybe because it will cut into corporate profits.
"It shouldn't be an either/or proposition." Absolutely right! Yet I think many working class
people are beginning to realize how they have been played by identity politics.
I heard a self-identified "blue-collar conservative" express it this way: "the republicans
always talking about Jesus, but they never try to help the people our Lord cared about. People
who are sick, in jail, whatever."
Deindustrialization has been occurring in all advanced OECD nations for the last 40 years,
including before and after trade liberalization, before NAFTA, the WTO, Most-Favored Nation Status
for China, in countries with strong interventionist industrial policy, and even in countries with
strong labor unions.
De-industrialization, like De-agriculturalism that preceded it, in which 98% of the populace
moved from farming to factory jobs, seems to be a fundamental aspect of massive increases in productivity
, and advanced economies moving to services.
The forces that were responsible for this really can't be laid on the Democrats or Republicans,
since it's occurring everywhere at roughly the same rate. You can see a graph here:
http://s17.postimg.org/bha27d6xb/worldmfg.jpg
This can only get worse with the likes of self-driving cars and trucks, mobile e-commerce,
warehouse automation, AI based customer support, etc. Moving into the future, fewer people will
be needed to produce more with less, in addition to a demographic inversion from a low birth rate
producing countries where 30-40% of the population are 65 or older.
It's really time to stop playing with partisan politics and past models that imagine a return
to the Ozzie and Harriet days of large blue collar labor in manufacturing. Our populations are
getting older, and our technology is making work less relevant.
If anything, we should be looking at a move to universal living income model in which no one
needs to work to live, it becomes optional.
What you are describing is a non-authoritarian fulfillment of Marxist communism. Except unlike
Marx, you left out all the conflict that happens in a class society. Pray tell, you seem to be
expecting a classless society to appear out of the fulfillment of automation. Human beings aren't
classless creatures. We love division into classes, and the resulting conflict between them, if
we aren't loving ethnic, religious or national conflict.
What Disturbed Voter is trying to say, is that no major change ever goes unnopposed by those
who benefit from the existing system. Be prepared for the oligarchs and their quislings to fight
you tooth and nail. If you expect the Masters of the Universe who benefit from modern capitalism
to 'stop playing with partisan politics' then im afraid youre believing a fairy tale.
The assumption that increasing automation will continue in a world of diminishing natural and
energy resources is highly dubious. In societies which do not have privileged access to energy,
a lot of work is still performed with human muscle. If the energy resources the rich countries
rely upon become scarcer, the same is likely to be the case in what are now rich societies.
Agreed. That automation still requires energy whether you want to account for the human (food,
shelter, etc.) or the machine (resources to produce the machine, resources to program the logic,
resources to power the computation, etc.) you can't escape the 2nd Law.
You are not correct that that US deindustrialization has been primarily a function of massive
increases in productivity. First of all, mfg productivity has decreased in the US since 2004.
(See recent Brookings paper). Second, the vast majority of the increase in overall mfg productivity
over recent decades is has been due to giant measured increases in one sector computers and
those giant measured increases (which are probably mismeasurements) have been accompanied by massive
offshoring of manufacturing jobs in this sector, not the elimination of work.
Also, deindustrialization is not like de-farming because farmers could move to higher productivity
work, where as laid off factory workers are having to move, when they can find work at all, from
high productivity work to low productivity work.
fewer people will be needed to produce more with less : this has been the case for the
last 100+ years at least yet has never led to the elimination of work. Indeed, average workdays
are longer now than they were 50 years ago and most families have more people working today than
families did 50 years ago.
Tony: Increasing automation will absolutely occur and increase, irrespective of current rates
of resource extraction from the ground. Here is why: as resource prices increase, capital will
begin to apply AI, etc. to the task of maximizing efficiency in recycling, etc in order to continue
the march towards elimination of the variable price input they despise most (humans). As far as
energy goes, keep in mind that solar is rapidly increasing in efficiency too. Add to that, the
following: there are trillions of tons of scrap metal that, absent the need to pay humans to harvest
and handle them for recycling, can be reused to make more robots. If you are a 95% automated company,
you locate your factories in hellholes like Death Valley where solar is cheap. You make robots
whose task is to make more robots from scavenged metal, precious metals, rare-earths, etc.
The thing is, the holders of capital are now (or are all becoming) fundamentally sociopathic.
Ultimately, in order to stem the tide of automation (that, goshdarnit, they wish they wouldn't
have to resort to, but darn those pesky wages and benefits and so on), minimum wage laws will
be eliminated. I see this in comment sections all the time if you allow people to compete on
price, the lowest will always win.
If, following a long period of rentier-extraction of all economic value (i.e. forced liquidiation
of any assets the workers hold, sales of personal belongings, you fill in the blanks), the final
answer is dystopian nightmare. Eventually, it will be accepted that people will be allowed to
indenture themselves again. Those agreements become currency tradeable like bonds or other instruments.
Eventually, the rich, having used up everything else to buy/sell/crapify will resort to the outright
trading in human lives it's easy to envision a world in which one obligates oneself at, say,
16, to 30 years of labor and your contract is then bought or sold by the rich depending on your
apparent worth.
All of this will be sanctioned and embraced by the collective sufferers of Stockholm Syndrome
that we are all becoming.
But why do those negotiating our trade deals do everything possible to protect agriculture
even though it employs few while telling us that manufacturing is gotta go because it's too productive?
Curious, other than things like Free Trade and voting rights for white men, what else does
it mean? Are there things Im forgetting? Because those are what come to mind.
What Thomas Frank writes is a measure of our civilization.
It is the best of times, it is the worst of times, it is the age of wisdom, it is the age of
foolishness, it is the epoch of belief, it is the epoch of incredulity, it is the season of light,
it is the season of darkness, it is the spring of hope, it is the winter of despair.
Everyone wants the American dream. But the dream isn't there anymore. Most fall more than they
climb.
Robert Putnam, Our Kids: The American Dream in Crisis, writes that "Growing class segregation
means that rich Americans and poor Americans are living, learning, and raising children in increasingly
separate and unequal worlds, removing the stepping-stones to upward mobility."
The politicians and the media tell us that we have to further tighten our belts and live on
hay, while the collapse of the middle class continues to accelerate, and promise us pie in the
sky. What a mockery!
The masses, having been deceived, are now agitated and in ferment.
"Long ago it was said that "one half of the world does not know how the other half lives."
That was true then. It did not know because it did not care. The half that was on top cared little
for the struggles, and less for the fate of those who were underneath, so long as it was able
to hold them there and keep its own seat. There came a time when the discomfort and consequent
upheavals so violent, that it was no longer an easy thing to do, and then the upper half fell
to inquiring what was the matter. Information on the subject has been accumulating rapidly since,
and the whole world has had its hands full answering for its old ignorance." Jacob A. Riis,
How the Other Half Lives
Politicians ultimately serve their most important constituents, which across the country means
the wealthy. In traditional Democratic enclaves where getting out the vote meant giving out benefits
like housing and health care, the pressure from the masses is no longer there. Rather, whoever
raises the most money for campaign cash is able to win most elections. Scott Brown tapped into
the dissatisfied and down trodden of the state for his brief turn as our Republican representative
in the Senate, but he turned out to be nothing more than a barn jacket driving an F150. Moreover,
witness the massive rewards that are now possible for retired technocrats. Deval Patrick made
a fantastic wage as a lawyer prior to being governor and now waltzes into Bain Capital to continue
harvesting economic gains. Why would a politician do anything to bite the hand that feeds it?
Another fitting quote from "that" time:
"It is difficult to get a man to understand something when his salary depends upon his not understanding
it."
Upton Sinclair Jr.
The thing that gets lost in all of these discussions concerning inequality and the changing
nature of work and education is that all of these things are the result of policy changes.
Yes. We did it.
Willfully and purposefully.
And those who benefit the most and therefore are able to contribute the most to professional
associations and personal giving continue to demand that these policies not only continue on the
same track but that new wrinkles be added to aid the people giving the money to do even better
whether it is regulatory, statute, or enforcement of existing laws; all of these can be enhanced
for the rich and successful.
At this point the working class person (whether by choice or necessity) has no champion. A
few years ago The Onion posted a faux news story detailing how the American People had hired lobbyists
to influence policy.
Like too much of the Onion's Stuff, the lampoon becomes the harpoon as it flies directly to
the heart of the matter.
Again what is missing is that these things are the result of policy not some organic sea-change
as the poster above delineates. (For the policies that are fomenting these changes are copied
around the world "improved" in come cases and sent back creating an endless loop of denigration
for working folks)
Who's this "we" you speak of, kemosabe? Those with the power to influence policy have designed
these outcomes. I have never been among them. Have you?
But you are correct in asserting that what we are seeing is the result purposeful action. The
policies are bad, but before we will be able to really change them, I think, we'll need to re-frame
the debate in such a way that every possible solution turns out to be a win for the elites. We
need to get back to basics. What is the economy for? Hint, not making money.
Are you an oligarch of some kind? If not, then saying that 'we did it' is wrong, because the
oligarchs bought all the politicians and had them enact these changes. To blame the electorate
when the majority of choices available to vote for were pre-selected to be answerable only to
the masters of capital seems to me to be disingenuous.
I'm glad Mr. Frank didn't mention "Boston Strong". There's a term that makes the hairs on the
back of my neck stand up. The Boston that was so strong that it was shut down and stilled for
a while by two brothers then one remaining brother, the teenager. A primer for how to apply Marshall
law to populous American cities during times of trouble. "Coming soon to a city near you", if
need be.
The attitudes were no different in Massachusetts fifty years ago, but you had to venture into
Southie or Roxbury or Fall River to see past the liberal rhetoric and observe the contempt the
gownies held for the townies. All that has changed is that now the manufacturing jobs are gone;
only the contempt remains.
Frank doesn't really mention though that de-industrialization in places like Fall River started
even before World War II. To be fair at this point it was textile mills and tanneries moving to
other places in the US with cheaper labor(i.e. the South). So Massachusetts historically was really
not hurt per say by free trade with other countries but free trade within the United States.
That's a reductionist argument, like saying that since you already had a cold the fact you've
now been diagnosed with cancer really isn't that big a deal. It's important to disaggregate different
trends and analyze their distinct contributions to changes in economic fortunes. Such an analysis
is likely to show that while the migration of some industries from the North to the South, largely
to exploit cheap labour, did have some non negligible regional impact the effect was completely
swamped by the subsequent shock of trade liberalization and globalization. The initial movement
involved labour intensive low skill light industries while the latter saw the decimation of the
heavy industries that were once the bedrock of the American economy. Moreover, fluctuations in
employment patterns within the US doesn't effect aggregate employment and output,
while the outsourcing of jobs overseas represents the dead loss of both, not to mention the negative
impact on the trade account of having to import all the things that were once produced domestically.
Thanks for your comparison article on MA, maybe you should look at Minnesota the only state
that has been mostly democrat for the longest period. Of course if you did you could not manage
your theme it just would not play-
The Nation has mostly the same excerpt of Frank's book and gives it a headline that is a
misdirect-"Why Have Democrats Failed in the State Where They're Most Likely to Succeed?" .The
Democrats didn't "fail", the leaders of the party were successful in their desired outcome.
In the UK we used to have three parties Labour, Conservative and Liberal. Now there is no room
between the slightly left and slightly right parties and the Liberals have been squeezed out of
existence.
Unfortunately the Neo-liberal ideology failed in 2008.
Everyone has now noticed the Neo-Liberal, Centrist main parties are not working in the interests
of the electorate.
Unconditional bailouts for bankers and austerity for the people.
How can there be any doubt?
New parties or leaders are required that aren't, Neo-Liberal centrists.
In Europe we have Podemos, Syriza and Five Star with a myriad of right wing parties including
Golden Dawn.
In the UK, UKIP and Corbyn.
In the US, Trump, Sanders and the Tea Party.
The elite haven't quite worked out how badly they have failed their electorate.
Get out of your ivory towers and discover the new reality.
It is important to establish the difference between Liberal and Labour/Socialist.
Where even the UK term Labour, and US term Socialist, are just versions of Capitalism that
lie on the Left, not true Socialism.
Liberals are left leaning elitists who are always using words like "populist" to show their
disdain for the masses.
They want those lower down to have reasonable lives but very much believe the elite should
run things, people like them.
New Labour were really Liberals, but the UK election system meant they had to hide under the
Labour banner to get into power. They lived in places like Hampstead where they never had to mix
with the hoi polloi and believed in private schools, so their children don't have to mix with
the great unwashed.
Labour/Socialists represent the people and identify with them.
With the technocrat elite messing things up globally it is time for real Labour and Socialists
to make their presence felt.
There is a world of difference between Liberals and the real Left and a three party system
makes sense.
The New Labour sympathisers need to get themselves under the correct banner, Liberal.
All those innovative new spin-off businesses will fail. Most of them. There are only so many
things an economy needs. A bubble of innovation isn't one of them. But it is good for the "consumer"
as Hillary tells us, because competition. Progress. So everyone can have more cheap crap. Who
says we have been deindustrialized? All this misbegotten innovation is going to bury us under
mountains of garbage. Just to keep the economy churning. We are not just wasting time and resources
for the sake of a bad idea, we are creating critical mass. It's almost as if policy makers think
that if we don't all run around in a frenzy of creativity the world will stop turning. Liberalism
is a silly, self indulgent thing.
I think you are largely right but let's give the devil his due: most of us would not like to
return to the world of 1760 before the first stuttering steps of industrial innovation. It was
a world even more unequal and authoritarian than our own. So when people talk about progress and
innovation, they have history and some powerful evidence from the past to call upon. The question
now is appropriateness, which I think is what you are driving at. We need to determine as a community
what is appropriate for our future well-being and how we want to use the technology we have, under
democratic control, to make a better future than the consumerist ecological disaster looming close
on our horizon.
"Innovation" is what limousine liberals propose to offer the masses in place of secure employment
and a decent standard of living. It's effectively old fashioned social Darwinism -innovate or
die- dressed up in fadish contemporary buisiness-speak that provides an ideological justification
for throwing the masses overboard while flattering their own prejudices about "meritocracy", "flexible
labour markets", and what have you.
As you said most of these businesses will fail, because the idea that innovation is an end
in itself is a conceit dreamed up by business school professors who have never spent a day running
the day to day operations (like meeting payroll) of an actual business. In reality innovation
is largely a serendipitous process that can't be taught in classrooms and is at best only slightly
responsive to external support ("incubation"). Very often it is largely dependent on dumb luck
the proverbial being "in the right place at the right time". People like Deval Patrick are never
going to acknowledge that however because to do so would be to admit -first of all to themselves-
that having championed policies that stripped workers of security and a respectable livelihood
what they are offering them in its place amounts to a handful of beans.
For at least 30 years Democrats have run on a platform of 'Identity Politics' which pits gays
against straits, people of color against whites, skeptics against the religious, immigrants against
nativists, etc. In short, deviding the country against itself in almost every demographic category
except the one that really counts labor against capital. The party once led by FDR who famously
welcomed the hatred and wrath of Wall Street is now led by the likes of Chuck Shumer and Steney
Hoyer who have their heads so far up the ass-end of Wall Street that it's amazing that either
one of them can still breathe.
$145M in tax breaks for 800 jobs that we stole from CT! Innovation!!!
I'm guessing employees aren't going to get paid the $181,250 a year that that comes out to?
Perhaps the state could have just hired 800 people and saved a bundle. But then we couldn't brag
about how we have so many world class businesses based right here!!!
"The city's education budget is $50 million short, despite a $13 million hike in school spending."
"Schools are facing the deficit due to rising costs and declining state and federal aid."
Oh right, that's where. Sometimes, it's like you can actually watch our wonderful leaders making
our society worse, more unequal right before your very eyes?!?!?!
I just got Thomas Frank's new book, and so far it seems to have gathered together in a coherent
narrative the journey of the leadership of the Democratic party to split off from the blue collar
workers who used to fill the factories. We no longer have the factories to occupy the time of
the least educated, and the dems have done precious little to confront this problem. I don't know
what else he has to say about his ideas towards the middle and end of his book, but I know the
real conclusion should be that the work week needs to continue to drop down another couple of
days. The level of automation and smart manufacturing design from the past 100 years has steady
improvements in productivity. The vast majority of our time is simply no longer required to sustain
the standard of living and increases in productivity. We may need to give over 3 Eight hour days
to work for the economy, the rest of the time should be left to own pursuit of happiness while
we live the short span allotted to us in the world.
The economic restructuring is a political decision making process that so far, no one party
as a whole has picked up as their primary unifying cause. While there are plenty of dems who have
a working class politics, they are in a minority within the dems.And while they understand the
value of supporting a tech based new economy, that doesn't mean we still don't needs tables and
chairs, refrigerators and stoves and other manufactured goods. It may mean we need fewer people
to make them, but the other alternatives for people without college or professional degrees needs
to be supported in numbers required to give everyone a decent paying job.
There is enough deferred maintenance of falling down buildings, homeless people that can be
housed in abandoned homes, potholes in roads, bad bridges, not to mention the enormous transition
to solar and wind power. The social order needs to change to allow people a quality standard of
living from our economic activity. And our economic activity can not just be based upon apps,
video games and 3-D printed birthday cakes. We still need to eat, so we did not abandon agriculture.
We still like to live in comfortable homes, so we do not have to abandon furniture making. And
we all benefit from being educated and healthy. All of our industrial base does not have to be
jettisoned for the sake of computers and the internet of everything. We still need something manufactured
if we are going to put the internet inside of it, whatever it maybe.
The best way to encourage innovation is to assure a strong safety net so that everyone can
innovate. The Scandinavian countries lead in measures of innovation (look it up). The US is also
a leader but only because of the large presence of government (read the book, "The Entrepreneurial
State).
Artisanal furniture, Artisanal coffee. Artisanal this and Artisanal that
but Artisanal Liberals, Artisanal Democrates, now that's where it's at!
~ a forgotten forklift driver who doesn't deserve a decent life because a decent life costs
more here than it does in Asia, with the difference going to those who don't need it for anything
more than cocktail party bragging rights
"... RBC Capital Markets' Global Head of Commodity Strategy Helima Croft outlined three potential scenarios for WTI crude on CNBC's "Fast Money" for the new year. The most bullish situation would be seeing more than a million barrels of oil pulled off the market and prices averaging in the $60 dollar range. ..."
"... "If you are thinking about sort of about a mid-$30s average for WTI, low-$40s, I think that's a bearish scenario," said Croft, who's also a CNBC contributor. ..."
"... "Our base case is this sort of middle range... $52 is our WTI call for next year," she said, implying that U.S. crude would be nearly one-third higher than its current trading levels. The fourth quarter "is really where you want to be looking for WTI to sort of take-off," she added. ..."
RBC Capital Markets' Global Head of Commodity Strategy Helima Croft outlined three potential
scenarios for WTI crude on CNBC's "Fast Money" for the new year. The most bullish situation would
be seeing more than a million barrels of oil pulled off the market and prices averaging in the
$60 dollar range.
The worst case scenario involves a tsunami of new production from OPEC, Saudi Arabia, Iran and
Libya hitting the market -- all but certain to drive prices even lower. On Thursday, the final day
of trading before the Christmas holiday, Brent and U.S. crude closed up by more than a percent,
but still well under $40 per barrel.
"If you are thinking about sort of about a mid-$30s average for WTI, low-$40s, I think that's
a bearish scenario," said Croft, who's also a CNBC contributor.
... ... ....
"Our base case is this sort of middle range... $52 is our WTI call for next year," she
said, implying that U.S. crude would be nearly one-third higher than its current trading levels.
The fourth quarter "is really where you want to be looking for WTI to sort of take-off," she
added.
But those politicians lucky enough to win discover -- if they did not know already -- that their
capacity to affect even their own domestic environment is constrained by forces beyond their control.
Notable quotes:
"... But those politicians lucky enough to win discover -- if they did not know already -- that their capacity to affect even their own domestic environment is constrained by forces beyond their control. ..."
"... In the case of Britain, the once-powerful centralized governments of that country are now multiply constrained. As the power of Britain in international affairs has declined, so has the British government's power within its own domain. Membership of the European Union constrains British governments' ability to determine everything from the quantities of fish British fishermen can legally catch to the amount in fees that British universities can charge students from other EU countries. ..."
"... Not least, the EU's insistence on the free movement of labor caused the Conservative-dominated coalition that came to power in 2010 to renege on the Tories' spectacularly ill-judged pledge to reduce to "tens of thousands a year" the number of migrants coming to Britain. The number admitted in 2014 alone was nearer 300,000. ..."
"... On top of all that, British governments -- even more than those of some other predominantly capitalist economies -- are open to being buffeted by market forces, whose winds can acquire gale force. In a world of substantially free trade, imports and exports of goods and services are largely beyond any government's control, and the Bank of England's influence over the external value of sterling is negligible. During the present election campaign, HSBC, one of the world's largest banks, indicated that it was contemplating shifting its headquarters from the City of London to Hong Kong. For good or ill, Britain's government was, and is, effectively helpless to intervene. ..."
"... That's why we need a federal Europe. Local governments for local issues and elected by the local people and a European government for European issues elected by all Europeans. ..."
Once upon a time, national elections were -- or seemed to be -- overwhelmingly domestic affairs,
affecting only the peoples of the countries taking part in them. If that was ever true, it is so
no longer. Angela Merkel negotiates with Greece's government with Germany's voters looming in the
background. David Cameron currently fights an election campaign in the UK holding fast to the belief
that a false move on his part regarding Britain's relationship with the EU could cost his Conservative
Party seats, votes and possibly the entire election.
Britain provides a good illustration of a general proposition. It used to be claimed, plausibly,
that "all politics is local." In 2015, electoral politics may still be mostly local, but the post-electoral
business of government is anything but local. There is a misfit between the two. Voters are mainly
swayed by domestic issues. Vote-seeking politicians campaign accordingly. But those politicians
lucky enough to win discover -- if they did not know already -- that their capacity to affect even
their own domestic environment is constrained by forces beyond their control.
Anyone viewing the UK election campaign from afar could be forgiven for thinking that British
voters and politicians alike imagined they were living on some kind of self-sufficient sea-girt island.
The opinion polls indicate that a large majority of voters are preoccupied -- politically as well
as in other ways -- with their own financial situation, tax rates, welfare spending and the future
of the National Health Service. Immigration is an issue for many voters, but mostly in domestic terms
(and often as a surrogate for generalized discontent with Britain's political class). The fact that
migrants from Eastern Europe and elsewhere make a positive net contribution to both the UK's economy
and its social services scarcely features in the campaign.
... ... ...
After polling day, all that will change -- probably to millions of voters' dismay. One American
presidential candidate famously said that politicians campaign in poetry, but govern in prose. Politicians
in democracies, not just in Britain, campaign as though they can move mountains, then find that most
mountains are hard or impossible to move.
In the case of Britain, the once-powerful centralized governments of that country are now
multiply constrained. As the power of Britain in international affairs has declined, so has the British
government's power within its own domain. Membership of the European Union constrains British governments'
ability to determine everything from the quantities of fish British fishermen can legally catch to
the amount in fees that British universities can charge students from other EU countries.
Not least, the EU's insistence on the free movement of labor caused the Conservative-dominated
coalition that came to power in 2010 to renege on the Tories' spectacularly ill-judged pledge to
reduce to "tens of thousands a year" the number of migrants coming to Britain. The number admitted
in 2014 alone was nearer 300,000.
The UK's courts are also far more active than they were. The British parliament in 1998 incorporated
the European Convention on Human Rights into British domestic law, and British judges have determinedly
enforced those rights. During the 1970s, they had already been handed responsibility for enforcing
the full range of EU law within the UK.
Also, Britain's judges have, on their own initiative, exercised increasingly frequently their
long-standing power of "judicial review," invalidating ministerial decisions that violated due process
or seemed to them to be wholly unreasonable. Devolution of substantial powers to semi-independent
governments in Scotland, Wales and Northern Ireland has also meant that the jurisdiction of many
so-called UK government ministers is effectively confined to the purely English component part.
On top of all that, British governments -- even more than those of some other predominantly
capitalist economies -- are open to being buffeted by market forces, whose winds can acquire gale
force. In a world of substantially free trade, imports and exports of goods and services are largely
beyond any government's control, and the Bank of England's influence over the external value of sterling
is negligible. During the present election campaign, HSBC, one of the world's largest banks, indicated
that it was contemplating shifting its headquarters from the City of London to Hong Kong. For good
or ill, Britain's government was, and is, effectively helpless to intervene.
The heirs of Gladstone, Disraeli, Lloyd George and Winston Churchill, Britain's political leaders
are understandably still tempted to talk big. But their effective real-world influence is small.
No wonder a lot of voters in Britain feel they are being conned.
ItsJustTim
That's globalization. And it won't go away, even if you vote nationalist. The issues are increasingly
international, while the voters still have a mostly local perspective. That's why we need
a federal Europe. Local governments for local issues and elected by the local people and a European
government for European issues elected by all Europeans.
"... it seems fair to say: Globalism isn't quite the Wave of the Future that most observers thought it was, even just a year ago. And so before we attempt to divide the true intentions of Clinton and Trump, we might first step back and consider how we got to this point. ..."
"... An Inquiry into the Nature and Causes of the Wealth of Nations . ..."
"... Clinton will say anything then she'll sell you out. I hope we never get a chance to see how she will sell us out on TPP ..."
"... What we would be headed for under Hillary Clinton is fascism--Mussolini's shorthand definition of fascism was the marriage of industry and commerce with the power of the State. That is what the plutocrats who run the big banks (to whom she owes her soul) aim to do. President, Thomas Jefferson knew the dangers of large European-style central banks. ..."
On the surface, it appears that Hillary Clinton and Donald Trump, for all their mutual antipathy,
are united on one big issue: opposition to new trade deals. Here's a recent headline in
The Guardian: "Trump and Clinton's free trade retreat: a pivotal moment for the world's
economic future."
And the subhead continues in that vein:
Never before have both main presidential candidates broken so completely with Washington orthodoxy
on globalization, even as the White House refuses to give up. The problem, however, goes much
deeper than trade deals.
In the above quote, we can note the deliberate use of the loaded word, "problem." As in, it's
a problem that free trade is unpopular-a problem, perhaps, that the MSM can fix. Yet in the
meantime, the newspaper sighed, the two biggest trade deals on the horizon, the well-known
Trans Pacific Partnership (TPP), and the lesser-known
Trans Atlantic Trade Investment
Partnership (TTIP), aimed at further linking the U.S. and European Union (EU), are both in jeopardy.
So now we must ask broader questions: What does this mean for trade treaties overall? And what
are the implications for globalism?
More specifically, we can ask: Are we sure that the two main White House hopefuls, Clinton and
Trump, are truly sincere in their opposition to those deals? After all, as has been
widely reported, President Obama still has plans to push TPP through to enactment in the "lame
duck" session of Congress after the November elections. Of course, Obama wouldn't seek to do that
if the president-elect opposed it-or would he?
Yet on August 30, Politico reminded its Beltway readership, "How
Trump or Clinton could kill Pacific trade deal." In other words, even if Obama were to move TPP
forward in his last two months in office, the 45th president could still block its implementation
in 2017 and beyond. If, that is, she or he really wanted to.
Indeed, as we think about Clinton and Trump, we realize that there's "opposition" that's for show
and there's opposition that's for real.
Still, given what's been said on the presidential campaign trail this year, it seems fair
to say: Globalism isn't quite the Wave of the Future that most observers thought it was, even just
a year ago. And so before we attempt to divide the true intentions of Clinton and Trump, we might
first step back and consider how we got to this point.
2. The Free Trade Orthodoxy
It's poignant that the headline, "Trump and Clinton's free trade retreat", lamenting the decay
of free trade, appeared in The Guardian. Until recently, the newspaper was known as The
Manchester Guardian, as in Manchester, England. And Manchester is not only a big city, population
2.5 million, it is also a city with a fabled past: You see, Manchester was the cradle of the Industrial
Revolution, which transformed England and the world. It was that city that helped create the free
trade orthodoxy that is now crumbling.
Yes, in the 18th and 19th centuries, Manchester was the leading manufacturing city in the world,
especially for textiles. It was known as "Cottonopolis."
Indeed, back then, Manchester was so much more efficient and effective at mass production that
it led the world in exports. That is, it could produce its goods at such low cost that it could send
them across vast oceans and still undercut local producers on price and quality.
Over time, this economic reality congealed into a school of thought: As Manchester grew rich from
exports, its business leaders easily found economists, journalists, and propagandists who would help
advance their cause in the press and among the intelligentsia.
The resulting school of thought became known, in the 19th century, as "Manchester
Liberalism." And so, to this day, long after Manchester has lost its economic preeminence to
rivals elsewhere in the world, the phrase "Manchester Liberalism" is a well-known in the history
of economics, bespeaking ardent support for free markets and free trade.
More recently, the hub for free-trade enthusiasm has been the United States. In particular, the
University of Chicago, home to the Nobel Prize-winning economist Milton Friedman, became free trade's
academic citadel; hence the "Chicago
School" has displaced Manchesterism.
And just as it made sense for Manchester Liberalism to exalt free trade and exports when Manchester
and England were on top, so, too, did the Chicago School exalt free trade when the U.S. was unquestionably
the top dog.
So back in the 40s and 50s, when the rest of the world was either bombed flat or still under the
yoke of colonialism, it made perfect sense that the U.S., as the only intact industrial power, would
celebrate industrial exports: We were Number One, and it was perfectly rational to make the most
of that first-place status. And if scribblers and scholars could help make the case for this new
status quo, well, bring 'em aboard. Thus the Chicago School gained ascendancy in the late 20th century.
And of course, the Chicagoans drew inspiration from a period even earlier than Manchesterism,
3. On the Origins of the Orthodoxy: Adam Smith and David Ricardo
One passage in that volume considers how individuals might optimize their own production and consumption:
It is the maxim of every prudent master of a family never to attempt to make at home what it
will cost him more to make than to buy.
Smith is right, of course; everyone should always be calculating, however informally, whether
or not it's cheaper to make it at home or buy it from someone else.
We can quickly see: If each family must make its own clothes and grow its own food, it's likely
to be worse off than if it can buy its necessities from a large-scale producer. Why? Because, to
be blunt about it, most of us don't really know how to make clothes and grow food, and it's expensive
and difficult-if not downright impossible-to learn how. So we can conclude that self-sufficiency,
however rustic and charming, is almost always a recipe for poverty.
Smith had a better idea: specialization. That is, people would specialize in one line of
work, gain skills, earn more money, and then use that money in the marketplace, buying what they
needed from other kinds of specialists.
Moreover, the even better news, in Smith's mind, was that this kind of specialization came naturally
to people-that is, if they were free to scheme out their own advancement. As Smith argued, the ideal
system would allow "every man to pursue his own interest his own way, upon the liberal plan of equality,
liberty and justice."
That is, men (and women) would do that which they did best, and then they would all come together
in the free marketplace-each person being inspired to do better, thanks to, as Smith so memorably
put it, the "invisible hand." Thus Smith articulated a key insight that undergirds the whole of modern
economics-and, of course, modern-day prosperity.
A few decades later, in the early 19th century, Smith's pioneering work was expanded upon by another
remarkable British economist, David Ricardo.
Ricardo's big idea built on Smithian specialization; Ricardo called it "comparative advantage."
That is, just as each individual should do what he or she does best, so should each country.
In Ricardo's well-known illustration, he explained that the warm and sunny climate of Portugal
made that country ideal for growing the grapes needed for wine, while the factories of England made
that country ideal for spinning the fibers needed for apparel and other finished fabrics.
Thus, in Ricardo's view, we could see the makings of a beautiful economic friendship: The Portuguese
would utilize their comparative advantage (climate) and export their surplus wine to England, while
the English would utilize their comparative advantage (manufacturing) and export apparel to Portugal.
Thus each would benefit from the exchange of efficiently-produced products, as each export paid for
the other.
Furthermore, in Ricardo's telling, if tariffs and other barriers were eliminated, then both countries,
Portugal and England, would enjoy the maximum free-trading win-win.
Actually, in point of fact-and Ricardo knew this-the relationship was much more of a win for England,
because manufacture is more lucrative than agriculture. That is, a factory in Manchester could crank
out garments a lot faster than a vineyard in Portugal could ferment wine.
And as we all know, the richer, stronger countries are industrial, not agricultural. Food is essential-and
alcohol is pleasurable-but the real money is made in making things. After all, crops can be grown
easily enough in many places, and so prices stay low. By contrast, manufacturing requires a lot of
know-how and a huge upfront investment. Yet with enough powerful manufacturing, a nation is always
guaranteed to be able to afford to import food. And also, it can make military weapons, and so, if
necessary, take foreign food and croplands by force.
We can also observe that Ricardo, smart fellow that he was, nevertheless was describing the economy
at a certain point in time-the era of horse-drawn carriages and sailing ships. Ricardo realized that
transportation was, in fact, a key business variable. He wrote that it was possible for a company
to seek economic advantage by moving a factory from one part of England to another. And yet in his
view, writing from the perspective of the year 1817, it was impossible to imagine
moving a factory from England to another country:
It would not follow that capital and population would necessarily move from England to Holland,
or Spain, or Russia.
Why this presumed immobility of capital and people? Because, from Ricardo's early 19th-century
perspective, transportation was inevitably slow and creaky; he didn't foresee steamships and airplanes.
In his day, relying on the technology of the time, it wasn't realistic to think that factories, and
their workers, could relocate from one country to another.
Moreover, in Ricardo's era, many countries were actively hostile to industrialization, because
change would upset the aristocratic rhythms of the old order. That is, industrialization could turn
docile or fatalistic peasants, spread out thinly across the countryside, into angry and self-aware
proletarians, concentrated in the big cities-and that was a formula for unrest, even revolution.
Indeed, it was not until the 20th century that every country-including China, a great civilization,
long asleep under decadent imperial misrule-figured out that it had no choice other than to industrialize.
So we can see that the ideas of Smith and Ricardo, enduringly powerful as they have been, were
nonetheless products of their time-that is, a time when England mostly had the advantages of industrialism
to itself. In particular, Ricardo's celebration of comparative advantage can be seen as an artifact
of his own era, when England enjoyed a massive first-mover advantage in the industrial-export game.
Smith died in 1790, and Ricardo died in 1823; a lot has changed since then. And yet the two economists
were so lucid in their writings that their work is studied and admired to this day.
Unfortunately, we can also observe that their ideas have been frozen in a kind of intellectual
amber; even in the 21st century, free trade and old-fashioned comparative advantage are unquestioningly
regarded as the keys to the wealth of nations-at least in the U.S.-even if they are so no longer.
4. Nationalist Alternatives to Free Trade Orthodoxy
As we have seen, Smith and Ricardo were pushing an idea, free trade, that was advantageous to
Britain.
So perhaps not surprisingly, rival countries-notably the United States and Germany-soon developed
different ideas. Leaders in Washington, D.C., and Berlin didn't want their respective nations to
be mere dependent receptacles for English goods; they wanted real independence. And so they wanted
factories of their own.
In the late 18th century, Alexander Hamilton, the visionary American patriot, could see that both
economic wealth and military power flowed from domestic industry. As the nation's first Treasury
Secretary, he persuaded President George Washington and the Congress to support a system of protective
tariffs and "internal improvements" (what today we would call infrastructure) to foster US manufacturing
and exporting.
And in the 19th century, Germany, under the much heavier-handed leadership of Otto von Bismarck,
had the same idea: Make a concerted effort to make the nation stronger.
In both countries, this industrial policymaking succeeded. So whereas at the beginning of the
19th century, England had led the world in steel production, by the beginning of the 20th century
century, the U.S. and Germany had moved well ahead. Yes, the "invisible hand" of individual self-interest
is always a powerful economic force, but sometimes, the "visible hand" of national purpose, animated
by patriotism, is even more powerful.
Thus by 1914, at the onset of World War One, we could see the results of the Smith/Ricardo model,
on the one hand, and the Hamilton/Bismarck model, on the other. All three countries-Britain, the
US, and Germany, were rich-but only the latter two had genuine industrial mojo. Indeed, during World
War One, English weakness became glaringly apparent in the 1915
shell crisis-as
in, artillery shells. It was only the massive importing of made-in-USA ammunition that saved Britain
from looming defeat.
Yet as always, times change, as do economic circumstances, as do prevailing ideas.
As we have seen, at the end of World War II, the U.S. was the only industrial power left standing.
And so it made sense for America to shift from a policy of Hamiltonian protection to a policy of
Smith-Ricardian export-minded free trade. Indeed, beginning in around 1945, both major political
parties, Democrats and Republicans, solidly embraced the new line: The U.S. would be the factory
for the world.
Yet if times, circumstances, and ideas change, they can always change again.
5. The Contemporary Crack-Up
As we have seen, in the 19th century, not every country wanted to be on the passive receiving
end of England's exports. And this was true, too, in the 20th century; Japan, notably, had its own
ideas.
If Japan had followed the Ricardian doctrine of comparative advantage, it would have focused on
exporting rice and tuna. Instead, by dint of hard work, ingenuity, and more than a little national
strategizing, Japan grew itself into a great and prosperous industrial power. Its exports, we might
note, were such high-value-adds as automobiles and electronics, not mere crops and fish.
Moreover, according to the same theory of comparative advantage, South Korea should have been
exporting parasols and kimchi, and China should have settled for exporting fortune cookies and pandas.
Yet as the South Korean economist
Ha-Joon Chang has chronicled,
these Asian nations resolved, in their no-nonsense neo-Confucian way, to launch state-guided private
industries-and the theory of comparative advantage be damned.
Yes, their efforts violated Western economic orthodoxy, but as the philosopher Kant once observed,
the actual proves the possible. Indeed, today, as we all know, the Asian tigers are among the richest
and fastest-growing economies in the world.
China is not only the world's largest economy in terms of purchasing power parity (PPP), but
also the world's largest manufacturing nation-producing 52 percent of color televisions, 75 percent
of mobile phones and 87 percent of the world's personal computers. The Chinese automobile industry
is the world's largest, twice the size of America's. China leads the world in foreign exchange
reserves. The United States is the main trading partner for seventy-six countries. China is the
main trading partner for 124.
In particular, we might pause over one item in that impressive litany: China makes 87 percent
of the world's personal computers.
Indeed, if it's true, as ZDNet reports, that
the Chinese have built "backdoors" into almost all the electronic equipment that they sell-that
is to say, the equipment that we buy-then we can assume that we face a serious military challenge,
as well as a serious economic challenge.
Yes, it's a safe bet that the People's Liberation Army has a good handle on our defense establishment,
especially now that the Pentagon has fully equipped itself with
Chinese-made iPhones and iPads.
Of course, we can safely predict that Defense Department bureaucrats will always say that there's
nothing to worry about, that they have the potential hacking/sabotage matter under control (although
just to be sure, the Pentagon might say, give us more money).
Yet we might note that this is the same defense establishment that couldn't keep track of lone
internal rogues such as Bradley Manning and Edward Snowden. Therefore, should we really believe that
this same DOD knows how to stop the determined efforts of a nation of 1.3 billion people, seeking
to hack machines-machines that they made in the first place?
Yes, the single strongest argument against the blind application of free- trade dogma is the doctrine
of self defense. That is, all the wealth in the world doesn't matter if you're conquered. Even Adam
Smith understood that; as he wrote, "Defense
. . . is of much more importance than opulence."
Yet today we can readily see: If we are grossly dependent on China for vital wares, then we can't
be truly independent of China. In fact, we should be downright fearful.
Still, despite these deep strategic threats, directly the result of careless importing, the Smith-Ricardo
orthodoxy remains powerful, even hegemonistic-at least in the English-speaking world.
Why is this so? Yes, economists are typically seen as cold and nerdy, even bloodless, and yet,
in fact, they are actual human beings. And as such, they are susceptible to the giddy-happy feeling
that comes from the hope of building a new utopia, the dream of ushering in an era of world harmony,
based on untrammeled international trade. Indeed, this woozy idealism among economists goes way back;
it was the British free trader Richard Cobden who declared in 1857,
Free trade is God's diplomacy. There is no other certain way of uniting people in the bonds
of peace.
And lo, so many wars later, many economists still believe that.
Indeed, economists today are still monolithically pro-fee trade; a
recent survey of economists found that 83 percent supported eliminating all tariffs and other
barriers; just 10 percent disagreed.
We might further note that others, too, in the financial and intellectual elite are fully on board
the free-trade train, including most corporate officers and their lobbyists, journalists, academics,
and, of course, the mostly for-hire think-tankers.
To be sure, there are always exceptions: As that Guardian article, the one lamenting the
sharp decrease in support for free trade as a "problem," noted, not all of corporate America is on
board, particularly those companies in the manufacturing sector:
Ford openly opposes TPP because it fears the deal does nothing to stop Japan manipulating its
currency at the expense of US rivals.
Indeed, we might note that the same Guardian story included an even more cautionary note,
asserting that support for free trade, overall, is remarkably rickety:
Some suggest a "bicycle theory" of trade deals: that the international bandwagon has to keep
rolling forward or else it all wobbles and falls down.
So what has happened? How could virtually the entire elite be united in enthusiasm for free trade,
and yet, even so, the free trade juggernaut is no steadier than a mere two-wheeled bike? Moreover,
free traders will ask: Why aren't the leaders leading? More to the point, why aren't the followers
following?
To answer those questions, we might start by noting the four-decade phenomenon of
wage stagnation-that's
taken a toll on support for free trade. But of course, it's in the heartland that wages have been
stagnating; by contrast,
incomes for
the bicoastal elites have been soaring.
We might also note that some expert predictions have been way off, thus undermining confidence
in their expertise. Remember, this spring, when all the experts were saying that the United Kingdom
would fall into recession, or worse, if it voted to leave the EU? Well, just the other day came this
New York Post headline: "Brexit
actually boosting the UK economy."
Thus from the Wall Street-ish perspective of the urban chattering classes, things are going well-so
what's the problem?
Yet the folks on Main Street have known a different story. They have seen, with their own eyes,
what has happened to them, and no fusillade of op-eds or think-tank monographs will persuade them
to change their mind.
However, because the two parties have been so united on the issues of trade and globalization-the
"Uniparty," it's sometimes called-the folks in the boonies have had no political alternative. And
as they say, the only power you have in this world is the power of an alternative. And so, lacking
an alternative, the working/middle class has just had to accept its fate.
Indeed, it has been a bitter fate, particularly bitter in the former industrial heartland. In
a 2013 paper, the
Economic Policy Institute (EPI) came to some startling conclusions:
Growing trade with less-developed countries lowered wages in 2011 by 5.5 percent-or by roughly
$1,800-for a full-time, full-year worker earning the average wage for workers without a four-year
college degree.
The paper added, "One-third of this total effect is due to growing trade with just China."
Continuing, EPI found that even as trade with low-wage countries caused a decrease in the incomes
for lower-end workers, it had caused an increase in the incomes of high-end workers-so no
wonder the high-end thinks globalism in great.
To be sure, some in the elite are bothered by what's been happening.
Peggy Noonan, writing earlier this year in The Wall Street Journal-a piece that must have
raised the hackles of her doctrinaire colleagues-put the matter succinctly: There's a wide, and widening,
gap between the "protected" and the "unprotected":
The protected make public policy. The unprotected live in it. The unprotected are starting
to push back, powerfully.
Of course, Noonan was alluding to the Trump candidacy-and also to the candidacy of Sen. Bernie
Sanders. Those two insurgents, in different parties, have been propelled by the pushing from all
the unprotected folks across America.
We might pause to note that free traders have arguments which undoubtedly deserve a fuller airing.
Okay. However, we can still see the limits. For example, the familiar gambit of outsourcing jobs
to China, or Mexico-or 50 other countries-and calling that "free trade" is now socially unacceptable,
and politically unsustainable.
Still, the broader vision of planetary freedom, including the free flow of peoples and their ideas,
is always enormously appealing. The United States, as well as the world, undoubtedly benefits from
competition, from social and economic mobility-and yes, from new blood.
As
Stuart Anderson, executive director of the National Foundation for American Policy, notes, "77
percent of the full-time graduate students in electrical engineering and 71 percent in computer science
at U.S. universities are international students." That's a statistic that should give every American
pause to ask: Why aren't we producing more engineers here at home?
We can say, with admiration, that Silicon Valley is the latest Manchester; as such, it's a powerful
magnet for the best and the brightest from overseas, and from a purely dollars-and-cents point of
view, there's a lot to be said for welcoming them.
So yes, it would be nice if we could retain this international mobility that benefits the U.S.-but
only if the economic benefits can be broadly shared, and patriotic assimilation of immigrants can
be truly achieved, such that all Americans can feel good about welcoming newcomers.
The further enrichment of Silicon Valley won't do much good for the country unless those riches
are somehow widely shared. In fact, amidst the ongoing outsourcing of mass-production jobs,
total employment in such boomtowns as San Francisco and San Jose has barely budged. That is,
new software billionaires are being minted every day, but their workforces tend to be tiny-or located
overseas. If that past pattern is the future pattern, well, something will have to give.
We can say: If America is to be
one nation-something Mitt "47 percent" Romney never worried about, although it cost him in the
end-then we will have to figure out a way to turn the genius of the few into good jobs for the many.
The goal isn't socialism, or anything like that; instead, the goal is the widespread distribution
of private property, facilitated, by conscious national economic development, as
I argued at the tail end of this piece.
If we can't, or won't, find a way to expand private ownership nationwide, then the populist upsurges
of the Trump and Sanders campaigns will be remembered as mere overtures to a starkly divergent future.
6. Clinton and Trump Say They Are Trade Hawks: But Are They Sincere?
So now we come to a mega-question for 2016: How should we judge the sincerity of the two major-party
candidates, Clinton or Trump, when they affirm their opposition to TPP? And how do we assess their
attitude toward globalization, including immigration, overall?
The future is, of course, unknown, but we can make a couple of points.
First, it is true that
many have questioned the sincerity of Hillary's new anti-TPP stance, especially given the presence
of such prominent free-traders as vice presidential nominee Tim Kaine and presidential transition-planning
chief Ken Salazar. Moreover, there's also Hillary's own decades-long association with open-borders
immigration policies, as well as past support for such trade bills as NAFTA, PNTR, and, of course,
TPP. And oh yes, there's the Clinton Foundation, that global laundromat for every overseas fortune;
most of those billionaires are globalists par excellence-would a President Hillary really
cross them?
Second, since there's still no way to see inside another person's mind, the best we can
do is look for external clues-by which we mean, external pressures. And so we might ask a basic question:
Would the 45th president, whoever she or he is, feel compelled by those external pressures to keep
their stated commitment to the voters? Or would they feel that they owe more to their elite friends,
allies, and benefactors?
As we have seen, Clinton has long chosen to surround herself with free traders and globalists.
Moreover, she has raised money from virtually every bicoastal billionaire in America.
So we must wonder: Will a new President Clinton really betray her own class-all those
Davos Men and Davos Women-for the sake of middle-class folks she has never met, except maybe
on a rope line? Would Clinton 45, who has spent her life courting the powerful, really stick her
neck out for unnamed strangers-who never gave a dime to the Clinton Foundation?
Okay, so what to make of Trump? He, too, is a fat-cat-even more of fat-cat, in fact, than Clinton.
And yet for more than a year now, he has based his campaign on opposition to globalism in all its
forms; it's been the basis of his campaign-indeed, the basis of his base. And his campaign policy
advisers are emphatic. According to Politico, as recently as August 30, Trump trade adviser
Peter Navarro reiterated Trump's opposition to TPP, declaring,
Any deal must increase the GDP growth rate, reduce the trade deficit, and strengthen the manufacturing
base.
So, were Trump to win the White House, he would come in with a much more solid anti-globalist
mandate.
Thus we can ask: Would a President Trump really cross his own populist-nationalist base by going
over to the other side-to the globalists who voted, and donated, against him? If he did-if he repudiated
his central platform plank-he would implode his presidency, the way that Bush 41 imploded his presidency
in 1990 when he went back on his "read my lips, no new taxes" pledge.
Surely Trump remembers that moment of political calamity well, and so surely, whatever mistakes
he might make, he won't make that one.
To be sure, the future is unknowable. However, as we have seen, the past, both recent and historical,
is rich with valuable clues.
Clinton will say anything then she'll sell you out. I hope we never get a chance to see
how she will sell us out on TPP
Ellen Bell -> HoosierMilitia
You really do not understand the primitive form of capitalism that the moneyed elites are trying
to impose on us. That system is mercantilism and two of its major tenets are to only give the
workers subsistence level wages (what they are doing to poor people abroad and attempting to do
here) and monopolistic control of everything that is possible to monopolize. The large multi-nationals
have already done that. What we would be headed for under Hillary Clinton is fascism--Mussolini's
shorthand definition of fascism was the marriage of industry and commerce with the power of the
State. That is what the plutocrats who run the big banks (to whom she owes her soul) aim to do.
President, Thomas Jefferson knew the dangers of large European-style central banks. He said:
"...The central bank is an institution of the most deadly hostility existing against the
Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes
for anything but Coin. If the American People allow private banks to control the issuance of
their currency, first by inflation and then by deflation, the banks and corporations that will
grow up around them will deprive the People of all their Property until their Children will
wake up homeless on the continent their Fathers conquered..."
The power to create money was given to the private banking system of the Federal Reserve in
1913. Nearly every bit of our enormous debt has been incurred since then. The American people
have become debt-slaves. In the Constitution, only Congress has the right to issue currency. That's
why the plutocrats want to do away with it--among other reasons.
"... Donald Trump is challenging the very fabric of the institutional elites in this country on both sides that have, quite frankly, just straight up screwed this country up and made the world a mess. ..."
Tom Coyne, a lifelong Democrat and the mayor of Brook Park, Ohio, spoke
about his endorsement of Republican presidential nominee Donald Trump with Breitbart
News Daily SiriusXM host Matt Boyle.
Coyne said:
The parties are blurred. What's the difference? They say the same things
in different tones. At the end of the day, they accomplish nothing.
Donald Trump is challenging the very fabric of the institutional elites
in this country on both sides that have, quite frankly, just straight up
screwed this country up and made the world a mess.
Regarding the GOP establishment's so-called Never Trumpers, Coyne stated,
"If it's their expertise that people are relying upon as to advice to vote,
people should go the opposite."
In an interview last week, Coyne said that Democrats and Republicans
have failed the city through inaction and bad trade policies, key themes
Trump often trumpets.
"He understands us," Coyne said of Trump. "He is saying what we feel,
and therefore, let him shake the bedevils out of everyone in the canyons
of Washington D.C. The American people are responding to him."
Breitbart News Daily airs on SiriusXM Patriot 125 weekdays from 6:00
a.m. to 9:00 a.m. Eastern.
"... Donald Trump isn't a politician -- he's a one-man wrecking ball against our dysfunctional and corrupt establishment. We're about to see the deluxe version of the left's favorite theme: Vote for us or we'll call you stupid. It's the working class against the smirking class. ..."
"... He understands that if we're ever going to get our economy back on its feet the wage-earning middle class will have to prosper along with investors ..."
"... Trump that really "gets" the idea that the economy is suffering because the middle class can't find employment at livable wages ..."
"... Ms. Coulter says it more eloquently: "The Republican establishment has no idea how much ordinary voters hate both parties." Like me, she's especially annoyed with Republicans, because we think of the Republican Party as being our political "family" that has turned against us: ..."
"... The RNC has been forcing Republican candidates to take suicidal positions forever They were happy to get 100 percent of the Business Roundtable vote and 20 percent of the regular vote. ..."
"... American companies used free trade with low-wage countries as an opportunity to close their American factories and relocate the jobs to lower-paying foreign workers. Instead of creating product and exporting it to other countries, our American companies EXPORTED American JOBS to other countries and IMPORTED foreign-made PRODUCTS into America! Our exports have actually DECLINED during the last five years with most of the 20 countries we signed free trade with. Even our exports to Canada, our oldest free trade partner, are less than what they were five years ago. ..."
"... Trade with Japan, China, and South Korea is even more imbalanced, because those countries actively restrict imports of American-made products. We run a 4x trade imbalance with China, which cost us $367 billion last year. We lost $69 billion to Japan and $28 billion to South Korea. Our exports to these countries are actually DECLINING, even while our imports soar! ..."
"... Why do Establishment Republicans join with Democrats in wanting to diminish the future with the WRONG kind of "free trade" that removes jobs and wealth from the USA? As Ms. Coulter reminds us, it is because Republican Establishment, like the Democrat establishment, is PAID by the money and jobs they receive from big corporations to believe it. ..."
"... The donor class doesn't care. The rich are like locusts: once they've picked America dry, they'll move on to the next country. A hedge fund executive quoted in The Atlantic a few years ago said, "If the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile [that] means one American drops out of the middle class, that's not such a bad trade." ..."
"... The corporate 1% who believe that the global labor market should be tapped in order to beat American workers out of their jobs; and that corporations and the 1% who own them should be come tax-exempt organizations that profit by using cheap overseas labor to product product that is sold in the USA, and without paying taxes on the profit. Ms. Coulter calls this group of Republican Estblishmentarians "locusts: once they've picked America dry, they'll move on to the next country." ..."
"... Pretending to care about the interests of minorities. Of course, the Republican Establishment has even less appeal to minorities than to the White Middle Class (WMC) they abandoned. Minorities are no more interested in losing their jobs to foreigners or to suffer economic stagnation while the rich have their increasing wealth (most of which is earned at the expense of the middle class) tax-sheltered, than do the WMC. ..."
"... Trump has given Republicans a new lease on life. The Establishment doesn't like having to take a back seat to him, but perhaps they should understand that having a back seat in a popular production is so much better than standing outside alone in the cold. ..."
Donald Trump isn't a politician -- he's a one-man wrecking ball against our dysfunctional
and corrupt establishment. We're about to see the deluxe version of the left's favorite theme: Vote
for us or we'll call you stupid. It's the working class against the smirking class.
No pandering! The essence of Trump in personality and issues , August 23, 2016
Ms. Coulter explains the journey of myself and so many other voters into Trump's camp. It captures
the essence of Trump as a personality and Trump on the issues. If I had to sum Ms. Coulter's view
of the reason for Trump's success in two words, I'd say "No Pandering!" I've heard many people,
including a Liberal tell me, "Trump says what needs to be said."
I've voted Republican in every election going back to Reagan in 1980, except for 2012 when
I supported President Obama's re-election. I've either voted for, or financially supported many
"Establishment Republicans" like Mitt Romney and John McCain in 2008. I've also supported some
Conservative ones like Newt Gingrich and Rudy Giuliani. In this election I'd been planning to
vote for Jeb Bush, a superb governor when I lived in Florida.
Then Trump announced his candidacy. I had seen hints of that happening as far back as 2012.
In my Amazon reviews in 2012 I said that many voters weren't pleased with Obama or the Republican
Establishment. So the question became: "Who do you vote for if you don't favor the agendas of
either party's legacy candidates?" In November 2013 I commented on the book DOUBLE DOWN: GAME
CHANGE 2012 by Mark Halperin and John Heileman:
=====
Mr. Trump occupies an important place in the political spectrum --- that of being a Republican
Populist.
He understands that if we're ever going to get our economy back on its feet the wage-earning
middle class will have to prosper along with investors, who are recovering our fortunes in
the stock market.
IMO whichever party nominates a candidate like Trump that really "gets" the idea that the
economy is suffering because the middle class can't find employment at livable wages, will
be the party that rises to dominance.
Mr. Trump, despite his flakiness, at least understood that essential fact of American economic
life.
November 7, 2013
=====
Ms. Coulter says it more eloquently: "The Republican establishment has no idea how much
ordinary voters hate both parties." Like me, she's especially annoyed with Republicans, because
we think of the Republican Party as being our political "family" that has turned against us:
===== The RNC has been forcing Republican candidates to take suicidal positions forever They were
happy to get 100 percent of the Business Roundtable vote and 20 percent of the regular vote.
when the GOP wins an election, there is no corresponding "win" for the unemployed blue-collar
voter in North Carolina. He still loses his job to a foreign worker or a closed manufacturing
plant, his kids are still boxed out of college by affirmative action for immigrants, his community
is still plagued with high taxes and high crime brought in with all that cheap foreign labor.
There's no question but that the country is heading toward being Brazil. One doesn't have to
agree with the reason to see that the very rich have gotten much richer, placing them well beyond
the concerns of ordinary people, and the middle class is disappearing. America doesn't make anything
anymore, except Hollywood movies and Facebook. At the same time, we're importing a huge peasant
class, which is impoverishing what remains of the middle class, whose taxes support cheap labor
for the rich.
With Trump, Americans finally have the opportunity to vote for something that's popular.
=====
That explains how Trump won my vote --- and held on to it through a myriad of early blunders
and controversies that almost made me switch my support to other candidates.
I'm no "xenophobe isolationist" stereotype. My first employer was an immigrant from Eastern
Europe. What I learned working for him launched me on my successful career. I've developed and
sold computer systems to subsidiaries of American companies in Europe and Asia. My business partners
have been English and Canadian immigrants. My family are all foreign-born Hispanics. Three of
my college roommates were from Ecuador, Germany, and Syria.
BECAUSE of this international experience I agree with the issues of trade and immigration that
Ms. Coulter talks about that have prompted Trump's rising popularity.
First, there is the false promise that free trade with low-wage countries would "create millions
of high-paying jobs for American workers, who will be busy making high-value products for export."
NAFTA was signed in 1994. GATT with China was signed in 2001. Since then we've signed free trade
with 20 countries. It was said that besides creating jobs for Americans, that free trade would
prosper the global economy. In truth the opposite happened:
American companies used free trade with low-wage countries as an opportunity to close their
American factories and relocate the jobs to lower-paying foreign workers. Instead of creating
product and exporting it to other countries, our American companies EXPORTED American JOBS to
other countries and IMPORTED foreign-made PRODUCTS into America! Our exports have actually DECLINED
during the last five years with most of the 20 countries we signed free trade with. Even our exports
to Canada, our oldest free trade partner, are less than what they were five years ago.
We ran trade SURPLUSES with Mexico until 1994, when NAFTA was signed. The very next year the
surplus turned to deficit, now $60 billion a year. Given that each American worker produces an
average of $64,000 in value per year, that is a loss of 937,000 American jobs to Mexico alone.
The problem is A) that Mexicans are not wealthy enough to be able to afford much in the way of
American-made product and B) there isn't much in the way of American-made product left to buy,
since so much of former American-made product is now made in Mexico or China.
Trade with Japan, China, and South Korea is even more imbalanced, because those countries
actively restrict imports of American-made products. We run a 4x trade imbalance with China, which
cost us $367 billion last year. We lost $69 billion to Japan and $28 billion to South Korea. Our
exports to these countries are actually DECLINING, even while our imports soar!
Thus, free trade, except with a few fair-trading countries like Canada, Australia, and possibly
Britain, has been a losing proposition. Is it coincidence that our economy has weakened with each
trade deal we have signed? Our peak year of labor force participation was 1999. Then we had the
Y2K collapse and the Great Recession, followed by the weakest "recovery" since WWII? As Trump
would say, free trade has been a "disaster."
Why do Establishment Republicans join with Democrats in wanting to diminish the future
with the WRONG kind of "free trade" that removes jobs and wealth from the USA? As Ms. Coulter
reminds us, it is because Republican Establishment, like the Democrat establishment, is PAID by
the money and jobs they receive from big corporations to believe it. Ms. Coulter says:
===== The donor class doesn't care. The rich are like locusts: once they've picked America dry,
they'll move on to the next country. A hedge fund executive quoted in The Atlantic a few years
ago said, "If the transformation of the world economy lifts four people in China and India
out of poverty and into the middle class, and meanwhile [that] means one American drops out
of the middle class, that's not such a bad trade."
=====
Then there is immigration. My wife, son, and extended family legally immigrated to the USA
from Latin America. The first family members were recruited by our government during the labor
shortage of the Korean War. Some fought for the United States in Korea. Some of their children
fought for us in Vietnam, and some grandchildren are fighting in the Middle East. Most have
become successful professionals and business owners. They came here LEGALLY, some waiting in
queue for up to 12 years. They were supported by the family already in America until they were
on their feet.
Illegal immigration has been less happy. Illegals are here because the Democrats want new voters
and the Republicans want cheap labor. Contrary to business propaganda, illegals cost Americans
their jobs. A colleague just old me, "My son returned home from California after five years, because
he couldn't get construction work any longer. All those jobs are now done off the books by illegals."
It's the same in technology. Even while our high-tech companies are laying off 260,000 American
employees in 2016 alone, they are banging the drums to expand the importation of FOREIGN tech
workers from 85,000 to 195,000 to replace the Americans they let go. Although the H1-B program
is billed as bringing in only the most exceptional, high-value foreign engineers, in truth most
visas are issued to replace American workers with young foreigners of mediocre ability who'll
work for much less money than the American family bread-winners they replaced.
Both parties express their "reverse racism" against the White Middle Class. Democrats don't
like them because they tend to vote Republican. The Republican Establishment doesn't like them
because they cost more to employ than overseas workers and illegal aliens. According to them the
WMC is too technologically out of date and overpaid to allow our benighted business leaders to
"compete internationally."
Ms. Coulter says "Americans are homesick" for our country that is being lost to illegal immigration
and the removal of our livelihoods overseas. We are sick of Republican and Democrat Party hidden
agendas, reverse-racism, and economic genocide against the American people. That's why the Establishment
candidates who started out so theoretically strong, like Jeb Bush, collapsed like waterlogged
houses of cards when they met Donald Trump. As Ms. Coulter explains, Trump knows their hidden
agendas, and knows they are working against the best interests of the American Middle Class.
Coulter keeps coming back to Mr. Trump's "Alpha Male" personality that speaks to Americans
as nation without pandering to specific voter identity groups. She contrasts his style to the
self-serving "Republican (Establishment) Brain Trust that is mostly composed of comfortable, well-paid
mediocrities who, by getting a gig in politics, earn salaries higher than a capitalist system
would ever value their talents." She explains what she sees as the idiocy of those Republican
Establishment political consultants who wrecked the campaigns of Jeb Bush and Ted Cruz by micromanaging
with pandering.
She says the Republican Establishment lost because it served itself --- becoming wealthy by
serving the moneyed interests of Wall Street. Trump won because he is speaking to the disfranchised
American Middle Class who loves our country, is proud of our traditions, and believes that Americans
have as much right to feed our families through gainful employment as do overseas workers and
illegal aliens.
"I am YOUR voice," says Trump to the Middle Class that until now has been ignored and even
sneered at by both parties' establishments.
I've given an overview of the book here. The real delight is in the details, told as only Anne
Coulter can tell them. I've quoted a few snippets of her words, that relate most specifically
to my views on Trump and the issues. I wish there were space to quote many more. Alas, you'll
need to read the book to glean them all!
Bruce, I would also add that the Republican Establishment chose not to represent the interests
of the White Middle Class on trade, immigration, and other issues that matter to us. They chose
to represent the narrow interests of:
1. The corporate 1% who believe that the global labor market should be tapped in order
to beat American workers out of their jobs; and that corporations and the 1% who own them should
be come tax-exempt organizations that profit by using cheap overseas labor to product product
that is sold in the USA, and without paying taxes on the profit. Ms. Coulter calls this group
of Republican Estblishmentarians "locusts: once they've picked America dry, they'll move on to
the next country."
2. Pretending to care about the interests of minorities. Of course, the Republican Establishment
has even less appeal to minorities than to the White Middle Class (WMC) they abandoned. Minorities
are no more interested in losing their jobs to foreigners or to suffer economic stagnation while
the rich have their increasing wealth (most of which is earned at the expense of the middle class)
tax-sheltered, than do the WMC.
The Republican Establishment is in a snit because Trump beat them by picking up the WMC votes
that the Establishment abandoned. What would have happened if Trump had not come on the scene?
The probable result is that the Establishment would have nominated a ticket of Jeb Bush and John
Kasich. These candidates had much to recommend them as popular governors of key swing states.
But they would have gone into the election fighting the campaign with Republican Establishment
issues that only matter to the 1%. They would have lost much of the WMC vote that ultimately rallied
around Trump, while gaining no more than the usual 6% of minorities who vote Republican. It would
have resulted in a severe loss for the Republican Party, perhaps making it the minority party
for the rest of the century.
Trump has given Republicans a new lease on life. The Establishment doesn't like having
to take a back seat to him, but perhaps they should understand that having a back seat in a popular
production is so much better than standing outside alone in the cold.
It's funny how White Men are supposed to be angry. But I've never seen any White men:
1. Running amok, looting and burning down their neighborhood, shooting police and other "angry
White men." There were 50 people shot in Chicago last weekend alone. How many of those do you
think were "angry white men?" Hint: they were every color EXCEPT white.
2. Running around complaining that they aren't allowed into the other gender's bathroom, then
when they barge their way in there complain about being sexually assaulted. No, it's only "angry
females" (of any ethnicity) who barge their way into the men's room and then complain that somebody
in there offended them.
Those "angry white men" are as legendary as "Bigfoot." They are alleged to exist everywhere,
but are never seen. Maybe that's because they mostly hang out in the quiet neighborhoods of cookie-cutter
homes in suburbia, go to the lake or bar-be-que on weekends, and take their allotment of Viagra
in hopes of occassionally "getting lucky" with their wives. If they're "angry" then at least they
don't take their angry frustrations out on others, as so many other militant, "in-your-face" activist
groups do!
"... I've tuned out Warren-she has become the "red meat" surrogate for Clinton. Just because Taibbi was excellent on exposing Wall St. doesn't mean he really knows s**t about politics. I find the depiction of Trump as some kind of monster-buffoon to be simply boring and not very helpful. ..."
"... (might be the Trump Chaos bc Hillary will strategically turn our war machine on us can't believe this is as good as it gets, sighed out) ..."
"... Having the establishment, the military-industrial complex and Wall Street against him helps Trump a lot. ..."
"... You can fool part of the people all the time, and all people part of the time, but Brexit won, so will Trump, politician extraordinaire ..."
"... Given his family, a Trump presidency may look more like JFK's, where Bobby had more power than LBJ. Also, given Trump's negotiating expertise, I would certainly not believe any assertion of support he proclaims for the VP. I expect he had little choice in the matter, and that he also plans to send the VP to the hinterlands at the first opportunity. I'm unclear why so many appear to believe the VP has any influence whatsoever; I believe GWB was the only post-WW2 president who let the VP have any power. ..."
"... What is a populist? Somebody that tries to do what the majority want. Current examples: Less wars and military spending. More infrastructure spending. Less support for banks and corps (imagine how many votes trump would gain if he said 'as pres I will jail bankers that break the law' And how that repudiates Obama and both parties.) Gun control (but not possible from within the rep party) ..."
"... What is a fascist? Somebody that supports corporations, military, and military adventures. ..."
"... Actually, it sounds a whole lot like a different candidate from a different party, doesn't it? ..."
"... Neoliberal "Goodthink" flag. What this means when neoliberals say it is not let's build a better global society for all it means Corporations and our military should be able to run roughshod over the world and the people's of other countries. Exploit their citizens for cheap Labor, destroy their environment and move on. These are the exact policies of Hillary Clinton (see TPP, increase foreign wars etc.). Hillary globalism is not about global Brotherhood it's about global economic and military exploitation. Trump is nationalist non interventionist, which leads to less global military destruction than hillary and less global exploitation. So who is a better for those outside the US, hillary the interventionist OR trump the non-interventionist? ..."
"... Look, the Clintons are criminals, and their affiliate entities, including the DNC, could be considered criminal enterprises or co-conspirators at this point. ..."
"... The very fact that Establishment, Wall St and Koch bros are behind HRC is evidence that the current 'status quo' will be continued! I cannot stand another 4 years of Hilabama. ..."
"... The striving for American empire has so totally confused the political order of the country that up is down and down is up. The idea of government for and by the people is a distant memory. Covering for lies and contradictions of beliefs has blurred any notion of principles informing public action. ..."
"... If there is any principle that matters today, it is the pursuit of money and profit reigns supreme. Trump is populist in the sense he is talking about bringing money and wealth back to the working classes. Not by giving it directly, but by forcing businesses to turn their sights back to the US proper and return to making their profits at home. In the end, it is all nostalgia and probably impossible, but working class people remember those days so it rings true. That is hope and change in action. People also could care less if he cheats on his taxes or is found out lying about how much he is worth. Once again, fudging your net worth is something working people care little about. Having their share of the pie is all that matters and Trump is tapping into that. ..."
"... The only crime Trump has committed so far is his language. Liberals like Clinton, Blair and Obama drip blood. ..."
"... The 2016 election cannot be looked at in isolation. The wars for profit are spreading from Nigeria through Syria to Ukraine. Turkey was just lost to the Islamists and is on the road to being a failed state. The EU is in an existential crisis due to Brexit, the refugee crisis and austerity. Western leadership is utterly incompetent and failing to protect its citizens. Globalization is failing. Its Losers are tipping over the apple cart. Humans are returning to their tribal roots for safety. The drums for war with Russia are beating. Clinton / Kaine are 100% Status Quo Globalists. Trump / Pence are candidates of change to who knows what. Currently I am planning on voting for the Green Party in the hope it becomes viable and praying that the chaos avoids Maryland. ..."
I've tuned out Warren-she has become the "red meat" surrogate for Clinton. Just because
Taibbi was excellent on exposing Wall St. doesn't mean he really knows s**t about politics. I
find the depiction of Trump as some kind of monster-buffoon to be simply boring and not very helpful.
for all the run around Hillary, Trump's chosen circle of allies are Wall Street and Austerity
enablers. actually, Trump chaos could boost the enablers as easily as Hillary's direct mongering.
War is Money low hanging fruit in this cash strapped era and either directly or indirectly neither
candidate will disappoint.
So I Ask Myself which candidate will the majority manage sustainability while assembling to create
different outcomes? (might be the Trump Chaos bc Hillary will strategically turn our war machine
on us can't believe this is as good as it gets, sighed out)
War is only good for the profiteers when it can be undertaken in another territory. Bringing
the chaos home cannot be good for business. Endless calls for confidence and stability in markets
must reflect the fact that disorder effects more business that the few corporations that benefit
directly from spreading chaos. A split in the business community seems to be underway or at least
a possible leverage point to bring about positive change.
Even the splits in the political class reflect this. Those that benefit from spreading chaos are
loosing strength because they have lost control of where that chaos takes place and who is directly
effected from its implementation. Blowback and collateral damage are finally registering.
Trump may be a disaster. Clinton will be a disaster. One of these two will win. I won't vote
for either, but if you put a gun to my head and forced me to choose, I'd take Trump. He's certainly
not a fascist (I think it was either Vice or Vox that had an article where they asked a bunch
of historians of fascism if he was, the answer was a resounding no), he's a populist in the Andrew
Jackson style. If nothing else Trump will (probably) not start WW3 with Russia.
And war with Russia doesn't depend just on Hillary, it depends on us in Western Europe agreeing
with it.
A laughable proposition. The official US policy, as you may recall, is
fuck the EU .
Where was Europe when we toppled the Ukrainian govt? Get back to me when you can actually spend
2% GDP on your military. At the moment you can't even control your illegal immigrants.
The political parties that survive display adaptability, and ideological consistency isn't
a requirement for that. Look at the party of Lincoln. Or look at the party of FDR.
If the Democrats decapitate the Republican party by bringing in the Kagans of this world and
Republican suburbanites in swing states, then the Republicans will go where the votes are; the
Iron Law of Institutions will drive them to do it, and the purge of the party after Trump will
open the positions in the party for people with that goal.
In a way, what we're seeing now is what should have happened to the Republicans in
2008. The Democrats had the Republicans down on the ground with Obama's boot on their neck. The
Republicans had organized and lost a disastrous war, they had lost the legislative and executive
branches, they were completely discredited ideologically, and they were thoroughly discredited
in the political class and in the press.
Instead, Obama, with his strategy of bipartisanship - good faith or not - gave them a hand
up, dusted them off, and let them right back in the game, by treating them as a legitimate opposition
party. So the Republican day of reckoning was postponed. We got various bids for power by factions
- the Tea Party, now the Liberty Caucus - but none of them came anywhere near taking real power,
despite (click-driven money-raising) Democrat hysteria.
And now the day of reckoning has arrived. Trump went through the hollow institutional shell
of the Republican Party like the German panzers through the French in 1939. And here we are!
(Needless to say, anybody - ***cough*** Ted Cruz ***cough*** - yammering about "conservative
principles" is part of the problem, dead weight, part of the dead past.) I don't know if the Republicans
can remake themselves after Trump; what he's doing is necessary for that, but may not be sufficient.
Republicans won Congress and the states because the Democrats handed them to them on a silver
platter. To Obama and his fan club meaningful power is a hot potato, to be discarded as soon as
plausible.
Having the establishment, the military-industrial complex and Wall Street against him helps
Trump a lot.
Pro-Sanders folks, blacks, and hispanics will mostly vote for Trump.
Having Gov. Pence on the ticket, core Republicans and the silent majority will vote for Trump.
Women deep inside know Trump will help their true interests better than the Clinton-Obama rinse
repeat
Young people, sick and tired of the current obviously rigged system, will vote for change.
You can fool part of the people all the time, and all people part of the time, but Brexit
won, so will Trump, politician extraordinaire
Even Michael Moore gets it
Trump has intimated that he is not going to deal with the nuts and bolts of government,
that will be Pence's job.
Given his family, a Trump presidency may look more like JFK's, where Bobby had more power
than LBJ.
Also, given Trump's negotiating expertise, I would certainly not believe any assertion of support
he proclaims for the VP. I expect he had little choice in the matter, and that he also plans to
send the VP to the hinterlands at the first opportunity. I'm unclear why so many appear to believe
the VP has any influence whatsoever; I believe GWB was the only post-WW2 president who let the
VP have any power.
Minorities will benefit at least as much as whites with infrastructure spending, which trump
says he wants to do It would make him popular, which he likes, why not believe him? And if pres
he would be able to get enough rep votes to get it passed. No chance with Hillary, who anyway
would rather spend on wars, which are mostly fought by minorities.
What is a populist? Somebody that tries to do what the majority want. Current examples:
Less wars and military spending. More infrastructure spending. Less support for banks and corps
(imagine how many votes trump would gain if he said 'as pres I will jail bankers that break the
law' And how that repudiates Obama and both parties.) Gun control (but not possible from within
the rep party)
What is a fascist? Somebody that supports corporations, military, and military adventures.
I'm saying you have a much better chance to pressure Clinton
Sorry, but this argues from facts not in evidence and closely resembles the Correct the Record
troll line (now substantiated through the Wikileaks dump) that Clinton "has to be elected" because
she is at least responsive to progressive concerns.
Except she isn't, and the degree to which the DNC clearly has been trying to pander to disillusioned
Republicans and the amount of bile they spew every time they lament how HRC has had to "veer left"
shows quite conclusively to my mind that, in fact, the opposite of what you say is true.
Also, when NAFTA was being debated in the '90s, the Clintons showed themselves to be remarkably
unresponsive both to the concerns of organized labor (who opposed it) as well as the majority
of the members of their own party, who voted against it. NAFTA was passed only with a majority
of Republican votes.
I have no way of knowing whether you're a troll or sincerely believe this, but either way,
it needs to be pointed out that the historical record actually contradicts your premise. If you
do really believe this, try not to be so easily taken in by crafty rhetoric.
BTW, I'll take Trump's record as a husband over HRC's record as a wife. He loves a woman, then
they break up, and he finds another one. This is not unusual in the US. Hillary, OTOH, "stood
by her man" through multiple publicly humiliating infidelities, including having to settle out
of court for more than $800,000, and rape charges. No problem with her if her husband was flying
many times on the "Lolita Express" with a child molester. Could be she had no idea where her "loved
one" was at the time. Do they in fact sleep in the same bed, or even live in the same house? I
don't know.
RE: calling Donald Trump a "sociopath"-this is another one of those words that is thrown around
carelessly, like "nazi" and "fascist". In the Psychology Today article "How to Spot a Sociopath",
they list 16 key behavioral characteristics. I can't see them in Trump-you could make a case for
a few of them, but not all. For example: "failure to follow any life plan", "sex life impersonal,
trivial, and poorly integrated", "poor judgment and failure to learn by experience", "incapacity
for love"-you can't reasonably attach these characteristics to The Donald, who, indeed, has a
more impressive and loving progeny than any other prez candidate I can think of.
"I have a sense of international identity as well: we are all brothers and sisters."
Neoliberal "Goodthink" flag. What this means when neoliberals say it is not let's build
a better global society for all it means Corporations and our military should be able to run roughshod
over the world and the people's of other countries. Exploit their citizens for cheap Labor, destroy
their environment and move on. These are the exact policies of Hillary Clinton (see TPP, increase
foreign wars etc.). Hillary globalism is not about global Brotherhood it's about global economic
and military exploitation. Trump is nationalist non interventionist, which leads to less global
military destruction than hillary and less global exploitation. So who is a better for those outside
the US, hillary the interventionist OR trump the non-interventionist?
"And not everyone feels the same way, but for most voters there is either a strong tribal loyalty
(Dem or Repub) or a weaker sense of "us" guiding the voter on that day.
Mad as I am about the Blue Dogs, I strongly identify with the Dems."
So you recognize you are a tribalist, and assume all the baggage and irrationality that tribalism
often fosters, but instead of addressing your tribalism you embrace it. What you seem to be saying
(to me)is that we should leave critical thinking at the door and become dem tribalists like you.
"But the Repubs and Dems see Wall Street issues through different cultural prisms. Republican
are more reflexively pro-business. It matters."
Hillary Clinton's biggest donors are Wallstreet and her dem. Husband destroyed glass-steagall.
Trump wants to reinstate glass-steagall, so who is more business friendly again?
"He is racist, and so he knows how to push ugly buttons."
This identity politics trope is getting so old. Both are racist just in different ways, Trump
says in your face racist things, which ensure the injustice cannot be ignored, where hillary has
and does support racist policies, that use stealth racism to incrementaly increase the misery
of minorities, while allowing the majority to pretend it's not happening.
"First, he will govern with the Republicans. Republican judges, TPP, military spending, environmental
rollbacks, etc. Trump will not overrule Repubs in Congress."
These are literally hillarys policies not trumps.
Trump: anti TPP, stop foreign interventions, close bases use money for infrastructure.
Hillary :Pro TPP, more interventions and military spending
"And no, no great Left populist party will ride to the rescue. The populist tradition (identity)
is mostly rightwing and racist in our society.
People do not change political identity like their clothes. The left tradition in the US, such
as it is, is in the Dem party."
So what you are saying is quit being stupid, populism is bad and you should vote for hillarys
neoliberalism. The democrats were once left so even if they are no longer left, we must continue
to support them if another party or candidate that is to the left isn't a democrat? Your logic
hurts my head.
Look, the Clintons are criminals, and their affiliate entities, including the DNC, could
be considered criminal enterprises or co-conspirators at this point. Those who haven't realized
that, or worse, who shill for them are willfully ignorant, amoral, or unethical. The fact that
that includes a large chunk of the population doesn't change that. I don't vote for criminals.
The very fact that Establishment, Wall St and Koch bros are behind HRC is evidence that
the current 'status quo' will be continued! I cannot stand another 4 years of Hilabama.
I hate Hillary more than Trump. I want to protest at the Establishment, which at this represented
by Hillary.
Populism (support for popular issues) is, well, popular.
Fascism (support for corps and military adventures) is, at least after our ME adventures, unpopular.
Commenters are expressing support for the person expressing popular views, such as infrastructure
spending, and expressing little support for the candidate they believe is most fascist.
Btw, Most on this site are liberals, few are reps, so to support him they have had to buck
some of their long held antipathy regarding reps.
Right, what is changing with Trump is the Republicans are going back to, say, the Eisenhower
era, when Ike started the interstate highway system, a socialist program if there ever was one.
It's a good article; this is a general observation. Sorry!
"Hate" seems to be a continuing Democrat meme, and heck, who can be for hate? So it makes sense
rhetorically, but in policy terms it's about as sensible as being against @ssh0les (since as the
good book says, ye have the @ssh0les always with you). So we're really looking at virtue signaling
as a mode of reinforcing tribalism, and to be taken seriously only for that reason. If you look
at the political class writing about the working class - modulo writers like Chris Arnade - the
hate is plain as day, though it's covered up with the rhetoric of meritocracy, taking care of
losers, etc.
Strategic hate management is a great concept. It's like hate can never be created or destroyed,
and is there as a resource to be mined or extracted. The Clinton campaign is doing a great job
of strategic hate management right now, by linking Putin and Trump, capitalizing on all the good
work done in the press over the last year or so.
For years we have been told that government should be run like a business. In truth that statement
was used as a cudgel to avoid having the government provide any kind of a safety net to its citizenry
because there was little or no profit in it for the people who think that government largess should
only be for them.
Here's the thing, if government had been run like a business, we the people would own huge
portions of Citigroup, Goldman Sachs and Chase today. We wouldn't have bailed them out without
an equity stake in them. Most cities would have a share of the gate for every stadium that was
built. And rather than paying nothing to the community Walmart would have been paying a share
of their profits (much as those have dropped over the years).
I do not like Trump's business, but he truly does approach his brand and his relationships
as a business. When he says he doesn't like the trade deals because they are bad business and
bad deals he is correct. IF the well being of the United states and his populace are what you
are interested in regarding trade deals, ours are failures. Now most of us here know that was
not the point of the trade deals. They have been a spectacular success for many of our largest
businesses and richest people, but for America as a whole they have increased our trade deficit
and devastated our job base. When he says he won't go there, this is one I believe him on.
I also believe him on NATO and on the whole Russian thing. Why, because of the same reasons
I believe him on Trade. They are not winners for America as a whole. They are bad deals. Europe
is NOT living up to their contractual agreement regarding NATO. For someone who is a believer
in getting the better of the deal that is downright disgusting. And he sees no benefit in getting
into a war with Russia. The whole reserve currency thing vs. nukes is not going to work for him
as a cost benefit analysis of doing it. He is not going to front this because it is a business
loser.
We truly have the worst choices from the main parties in my lifetime. There are many reasons
Trump is a bad candidate. But on these two, he is far more credible and on the better side of
things than the Democratic nominee. And on the few where she might reasonably considered to have
a better position, unfortunately I do not for a moment believe her to be doing more than giving
lip service based on both her record and her character.
Is it your opinion that to have globalisation we must marginalize russia to the extent that
they realize they can't have utopia and make the practical choice of allowing finance capitalism
to guide them to realistic incrementally achieved debt bondage?
The Democratic Party has been inching further and further to the right. Bernie tried to arrest
this drift, but his internal populist rebellion was successfully thwarted by party elite corruption.
The Democratic position is now so far to the right that the Republicans will marginalize themselves
if they try to keep to the right of the Democrats.
But, despite party loyalty or PC slogans, the Democrat's rightward position is now so obvious
that it can be longer disguised by spin. The Trump campaign has demonstrated, the best electoral
strategy for the Republican Party is to leapfrog leftward and campaign from a less corporate position.
This has given space for the re-evaluation of party positions that Trump is enunciating, and the
result is that the Trump is running to the
left of Hillary. How weird is this?
I meant to use right and left to refer generally to elite vs popular. The issue is too big
to discuss without some simplification, and I'm sorry it has distracted from the main issue. On
the face of it, judging from the primaries, the Republican candidates who represented continued
rightward drift were rejected. (Indications are that the same thing happened in the Democratic
Party, but party control was stronger there, and democratic primary numbers will never be known).
The main point I was trying to make is that the Democratic party has been stretching credulity
to the breaking point in claiming to be democratic in any sense, and finally the contradiction
between their statements and actions has outpaced the capabilities of their propaganda. Their
Orwellian program overextended itself. Popular recognition of the disparity has caused a kind
of political "snap" that's initiated a radical reorganization of what used to be the party of
the right (or corporations, or elites, or finance, or "your description here".)
Besides confusion between which issues are right or left for Republicans or Democrats on the
national level, internationally, the breakdown of popular trust in the elites, and the failure
of their propaganda on that scale, is leading to a related worldwide distrust and rejection of
elite policies. This distrust has been percolating in pockets for some time, but it seems it's
now become so widespread that it's practically become a movement.
I suspect, however, there's a Plan B for this situation to restore the proper order. Will be
interesting to see how this plays out.
The striving for American empire has so totally confused the political order of the country
that up is down and down is up. The idea of government for and by the people is a distant memory.
Covering for lies and contradictions of beliefs has blurred any notion of principles informing
public action.
If there is any principle that matters today, it is the pursuit of money and profit reigns
supreme. Trump is populist in the sense he is talking about bringing money and wealth back to
the working classes. Not by giving it directly, but by forcing businesses to turn their sights
back to the US proper and return to making their profits at home. In the end, it is all nostalgia
and probably impossible, but working class people remember those days so it rings true. That is
hope and change in action. People also could care less if he cheats on his taxes or is found out
lying about how much he is worth. Once again, fudging your net worth is something working people
care little about. Having their share of the pie is all that matters and Trump is tapping into
that.
Clintons arrogance is worse because the transcripts probably clearly show her secretly conspiring
with bankers to screw the working people of this country. Trumps misdeeds effect his relationship
to other elites while Clintons directly effect working people.
Such a sorry state of affairs. When all that matters is the pursuit of money and profit, moving
forward will be difficult and full of moral contradictions. Populism needs a new goal. The political
machinery that gives us two pro-business hacks and an ineffectual third party has fundamentally
failed.
The business of America must be redefined, not somehow brought back to a mythical past greatness.
Talk about insanity.
"Bill Clinton has been a disaster for the Democratic Party. Send him packing."
"There's not much the Democrats can do about Mrs. Clinton. She's got a Senate seat for six
years. But there is no need for the party to look to her for leadership. The Democrats need to
regroup, re-establish their strong links to middle-class and working-class Americans, and move
on."
"You can't lead a nation if you are ashamed of the leadership of your party. The Clintons are
a terminally unethical and vulgar couple, and they've betrayed everyone who has ever believed
in them."
"As neither Clinton has the grace to retire from the scene, the Democrats have no choice but
to turn their backs on them. It won't be easy, but the Democrats need to try. If they succeed
they'll deserve the compliment Bill Clinton offered Gennifer Flowers after she lied under oath:
"Good for you." "
Amazing how the New York Times has "evolved" from Herbert's editorial stance of 15 years ago
to their unified editorial/news support for HRC's candacy,
In my view, it is not as if HRC has done anything to redeem herself in the intervening years.
It takes liberals to create a refugee crisis.
What country are we going to bomb back into the stone age this week?
We are very squeamish about offensive language.
We don't mind dropping bombs and ripping people apart with red hot shrapnel.
We are liberals.
Liberal sensibilities were on display in the film "Apocalypse Now".
No writing four letter words on the side of aircraft.
Napalm, white phosphorous and agent orange no problem.
Liberals are like the English upper class outward sophistication hiding the psychopath underneath.
They were renowned for their brutality towards slaves, the colonies and the English working class
(men, women and children) but terribly sophisticated when with their own.
Are you a bad language sort of person Trump
Or a liberal, psychopath, empire builder Clinton
The only crime Trump has committed so far is his language. Liberals like Clinton, Blair
and Obama drip blood.
Lambert strether said: my view is that the democrat party cannot be saved, but it can be seized.
Absolutely correct.
That is why Trump must be elected. Only then through the broken remains of both Parties can the
frangible Democrat Party be seized and restored.
The 2016 election cannot be looked at in isolation. The wars for profit are spreading from
Nigeria through Syria to Ukraine. Turkey was just lost to the Islamists and is on the road to
being a failed state. The EU is in an existential crisis due to Brexit, the refugee crisis and
austerity. Western leadership is utterly incompetent and failing to protect its citizens. Globalization
is failing. Its Losers are tipping over the apple cart. Humans are returning to their tribal roots
for safety. The drums for war with Russia are beating. Clinton / Kaine are 100% Status Quo Globalists.
Trump / Pence are candidates of change to who knows what. Currently I am planning on voting for
the Green Party in the hope it becomes viable and praying that the chaos avoids Maryland.
"... Because we interpreted the end of the Cold War as the ultimate vindication of America's economic system, we intensified our push toward the next level of capitalism, called globalization. It was presented as a project that would benefit everyone. Instead it has turned out to be a nightmare for many working people. Thanks to "disruption" and the "global supply chain," many American workers who could once support families with secure, decent-paying jobs must now hope they can be hired as greeters at Walmart. Meanwhile, a handful of super-rich financiers manipulate our political system to cement their hold on the nation's wealth. ..."
"... Rather than shifting to a less assertive and more cooperative foreign policy, we continued to insist that America must reign supreme. When we declared that we would not tolerate the emergence of another "peer power," we expected that other countries would blithely obey. Instead they ignore us. We interpret this as defiance and seek to punish the offenders. That has greatly intensified tensions between the United States and the countries we are told to consider our chief adversaries, Russia and China. ..."
Because we interpreted the end of the Cold War as the ultimate vindication
of America's economic system, we intensified our push toward the next level
of capitalism, called globalization. It was presented as a project that
would benefit everyone. Instead it has turned out to be a nightmare for
many working people. Thanks to "disruption" and the "global supply chain,"
many American workers who could once support families with secure, decent-paying
jobs must now hope they can be hired as greeters at Walmart. Meanwhile,
a handful of super-rich financiers manipulate our political system to cement
their hold on the nation's wealth.
Enrique Ferro's insight:
Moments of change require adaptation, but the United States is not good
at adapting. We are used to being in charge. This blinded us to the reality
that as other countries began rising, our relative power would inevitably
decline. Rather than shifting to a less assertive and more cooperative
foreign policy, we continued to insist that America must reign supreme.
When we declared that we would not tolerate the emergence of another "peer
power," we expected that other countries would blithely obey. Instead they
ignore us. We interpret this as defiance and seek to punish the offenders.
That has greatly intensified tensions between the United States and the
countries we are told to consider our chief adversaries, Russia and China.
This is downright sickening and the people who are voting for Hillary will not even care what will
happen with the USA iif she is elected.
By attacking Trump using "Khan gambit" she risks a violent backlash (And not only via Wikileaks,
which already promised to release information about her before the elections)
People also start to understand that she is like Trump. He destroyed several hundred American lifes
by robbing them, exploiting their vanity (standard practice in the USA those days) via Trump University
scam. She destroyed the whole country -- Libya and is complicit in killing Khaddafi (who, while not
a nice guy, was keeping the country together and providing be highest standard of living in Africa for
his people).
In other words she is a monster and sociopath. He probably is a narcissist too. So there is no much
phychological difference between them. And we need tight proportions to judge this situation if we are
talking about Hillary vs Trump.
As for people voting for Trump -- yes they will. I think if Hillary goes aganst Trump, the female
neoliberal monster will be trumped. She has little chances even taking into account the level of brainwashing
in the USA (which actually is close to those that existed in the USSR).
Notable quotes:
"... The reason Trump and Sanders are doing well in the US while fascists are doing well in Europe is the same reason: neoliberalism has gutted, or is in the process of gutting, societies. Workers and other formerly "safe" white collar workers are seeing their job security, income security, retirement security all go up in smoke. Neoliberals are trying to snip and cut labor protections, healthcare, environmental regulations all for corporate profit. In Europe this is all in addition to a massive refugee crisis itself brought on by neoliberalism (neocon foreign policy is required for neoliberal social policy, they go hand-in-hand). The US and NATO destabilize countries with the intent of stealing their resources and protecting their markets, cause massive refugee flows which strain social structures in Europe (which falls right into the hands of the gutters and cutters of neoliberalism). Of course the people will lean fascist. ..."
"... U.S. Government Tried to Tackle Gun Violence in 1960s ..."
"... Another key feature of fascism is territorial expansionism. As far as I am aware, none of the nationalist parties advocate invading other countries or retaking former colonies. Once again, contemporary neoliberalism is far closer to fascism. But you are correct about both Israel and Turkey our allies. They are much closer to the genuine article. But you won't hear those complaining about the rise of fascism in Europe complaining too much about them. ..."
"... The only way they have avoided complete revolt has been endless borrowing to fund entitlements, once that one-time fix plays out the consequences will be apparent. The funding mechanism itself (The Fed) has even morphed into a neo-liberal tool designed to enrich Capital while enslaving Labor with the consequences. ..."
"... "Every society chooses how resources are allocated between capital and labor." More specifically, isn't it a struggle between various political/economic/cultural movements within a society which chooses how resources are allocated between capital and labor. ..."
"... My objection to imprecise language here isn't merely pedantic. The leftist dismissal of right wing populists like Trump (or increasingly influential European movements like Ukip, AfD, and the Front national) as "fascist" is a reductionist rhetorical device intended to marginalize them by implying their politics are so far outside of the mainstream that they do not need to be taken seriously. ..."
"... " the gutters and cutters of neoliberalism" ..."
"... The neoliberals are all too aware that the clock is ticking. In this morning's NYT, yet more talk of ramming TPP through in the lame duck. ..."
"... The roads here are deteriorating FAST. In Price County, the road commissioner said last night that their budget allows for resurfacing all the roads on a 200 year basis. ..."
"... This Trump support seems like a form of political vandalism with Trump as the spray paint. People generally feel frustrated with government, utterly powerless and totally left out as the ranks of the precariat continue to grow. Trump appeals to the nihilistic tendencies of some people who, like frustrated teens, have decided to just smashed things up for the hell of it. They think a presidency mix of Caligula with Earl Scheib would be a funny hoot. ..."
"... Someone at American Conservative, when trying to get at why it's pointless to tell people Trump will wreck the place, described him as a "hand grenade" lobbed into the heart of government. You can't scare people with his crass-ness and destructive tendencies, because that's precisely what his voters are counting on when/if he gets into government. ..."
"... In other words, the MSM's fear is the clearest sign to these voters that their ..."
"... Your phrase "Trump is political vandalism" is great. I don't think I've seen a better description. NPR this morning was discussing Trump and his relationship with the press and the issues some GOP leaders have with him. When his followers were discussed, the speakers closely circled your vandalism point. Basically they said that his voters are angry with the power brokers and leaders in DC and regardless of whether they think Trump's statements are heartfelt or just rhetoric, they DO know he will stick it to those power brokers so that's good. Vandalism by a longer phrase. ..."
"... Meritocracy was ALWAYS a delusional fraud. What you invariably get, after a couple of generations, is a clique of elitists who define merit as themselves and reproduce it ad nauseam. Who still believes in such laughable kiddie stories? ..."
"... Campaign Finance Reform: If you can't walk into a voting booth you cannot contribute, or make all elections financed solely by government funds and make private contributions of any kind to any politician illegal. ..."
"... Re-institute Glass-Steagall but even more so. Limit the number of states a bank can operate in. Make the Fed publicly owned, not privately owned by banks. Completely revise corporate law, doing away with the legal person hood of corporations and limit of liability for corporate officers and shareholders. ..."
"... Single payer health care for everyone. Allow private health plans but do away with health insurance as a deductible for business. Remove the AMA's hold on licensing of medical schools which restricts the number of doctors. ..."
"... Do away with the cap on Social Security wages and make all income, wages, capital gains, interest, and dividends subject to taxation. Impose tariffs to compensate for lower labor costs overseas and revise industry. ..."
"... Cut the Defense budget by 50% and use that money for intensive infrastructure development. ..."
"... Raise the national minimum wage to $15 and hour. ..."
"... Severely curtail the revolving door from government to private industry with a 10 year restriction on working for an industry you dealt with in any way as a government official. ..."
"... Free public education including college (4 year degree). ..."
"... Obama and Holder, allowing the banks to be above the law have them demi-gods, many of whom are psychopaths and kleptocrats, and with their newly granted status, they are now re-shaping the world in their own image. Prosecute these demi-gods and restore sanity. Don't and their greed for our things will never end until nothings left. ..."
"... This is why Hillary is so much more dangerous than trump, because she and the demi gods are all on the same page. The TPP is their holy grail so I expect heaven and earth to be moved, especially if it looks like some trade traitors are going to get knocked off in the election, scoundrels like patty murray (dino, WA) will push to get it through then line up at the feed trough to gorge on k street dough. I plan to vote stein if it's not Bernie, but am reserving commitment until I see what kind of betrayals the dems have for me, if it's bad enough I'll go with the trump hand grenade. ..."
"... Totally agree tegnost, no more democratic neoliberals -- ..."
"... "they are now re-shaping the world in their own image" Isn't this intrinsic to bourgeois liberalism? ..."
"... Two things are driving our troubles: over-population and globalization. The plutocrats and kleptocrats have all the leverage over the rest of us laborers when the population of human beings has increased seven-fold in the last 70 years, from a little over a billion to seven billions (and growing) today. They are happy to let us freeze to death behind gas stations in order for them to compete with other oligarchs in excess consumption. ..."
"... Thank you for mentioning the third rail of overpopulation. Too often, this giant category of problems is ignored, because it makes people uncomfortable. The planet is finite, resources on the planet are finite, yet the number of people keeps growing. We need to strive for a higher quality of life, not a higher quantity of people. ..."
"... The issue goes beyond "current neoliberals up for election", it is most of our political establishment that has been corrupted by a system that provides for the best politicians money can buy. ..."
"... America has always been a country where a majority of the population has been poor. With the exception of a fifty five year(1950-2005) year period where access to large quantities of consumer debt by households was deployed to first to provide a wealth illusion to keep socialism at bay, followed by a mortgage debt boom to both keep the system afloat and strip the accumulated capital of the working class, i.e. home equity, the history of the US has been one of poverty for the masses. ..."
"... Further debt was foisted on the working class in the form of military Keynesianism, generating massive fiscal deficits which are to be paid for via austerity in a neo-feudal economy. ..."
The first comment gives a window into the hidden desperation in America that is showing up in statistics
like increasing opioid addiction and suicides, rather than in accounts of how and why so many people
are suffering. I hope readers will add their own observations in comments.
We recently took three months to travel the southern US from coast to coast. As an expat for
the past twenty years, beyond the eye opening experience it left us in a state of shock. From
a homeless man convulsing in the last throes of hypothermia (been there) behind a fuel station
in Houston (the couldn't care less attendant's only preoccupation getting our RV off his premises),
to the general squalor of near-homelessness such as the emergence of "American favelas" a block
away from gated communities or affluent ran areas, to transformation of RV parks into permanent
residencies for the foreclosed who have but their trailer or RV left, to social study one can
engage while queuing at the cash registers of a Walmart before beneficiaries of SNAP.
Stopping to take the time to talk and attempt to understand their predicament and their beliefs
as to the cause of their plight is a dizzying experience in and of itself. For a moment I felt
transposed to the times of the Cold War, when the Iron Curtain dialectics fuzzed the perception
of that other world to the west with a structured set of beliefs designed to blacken that horizon
as well as establish a righteous belief in their own existential paradigm.
What does that have to do with education? Everything if one considers the elitist trend that
is slowly setting the framework of tomorrow's society. For years I have felt there is a silent
"un-avowed conspiracy", why the seeming redundancy, because it is empirically driven as a by-product
of capitalism's surge and like a self-redeeming discount on a store shelf crystalizes a group
identity of think-alike know-little or nothing frustrated citizens easily corralled by a Fox or
Trump piper. We have re-rcreated the conditions or rather the reality of "Poverty In America"
barely half a century after its first diagnostic with one major difference : we are now feeding
the growth of the "underclass" by lifting ever higher and out of reach the upward mobility ladder,
once the banner of opportunity now fallen behind the supposedly sclerotic welfare states of Europe.
So Richard Cohen now fears American voters because of Trump. Well, on Diane Reem today (NPR)
was a discussion on why fascist parties are growing in Europe. Both Cohen and the clowns on NPR
missed the forest for the trees. The reason Trump and Sanders are doing well in the US while
fascists are doing well in Europe is the same reason: neoliberalism has gutted, or is in the process
of gutting, societies. Workers and other formerly "safe" white collar workers are seeing their
job security, income security, retirement security all go up in smoke. Neoliberals are trying
to snip and cut labor protections, healthcare, environmental regulations all for corporate profit.
In Europe this is all in addition to a massive refugee crisis itself brought on by neoliberalism
(neocon foreign policy is required for neoliberal social policy, they go hand-in-hand). The US
and NATO destabilize countries with the intent of stealing their resources and protecting their
markets, cause massive refugee flows which strain social structures in Europe (which falls right
into the hands of the gutters and cutters of neoliberalism). Of course the people will lean fascist.
In the US we don't have the refugees, but the neoliberalism is further along and more damaging.
There's no mystery here or in Europe, just the natural effects of governments failing to represent
real people in favor of useless eater rich.
Make the people into commodities, endanger their washes and job security, impose austerity,
and tale in floods of refugees. Of COURSE Europeans stay leaning fascist.
According to NPR's experts, many or most of those parties are "fascist". The fascist label
is getting tossed around a LOT right now. It is slung at Trump, at UKIP, or any others. Fascist
is what you call the opposition party to the right that you oppose. Now I don't call Trump a fascist.
A buffoon, yes, even a charlatan (I still rather doubt he really originally thought he would become
the GOP nominee. Perhaps I'm wrong but, like me, many seemed to think that he was pushing his
"brand" a term usage of which I HATE because it IS like we are all commodities or businesses
rather than PEOPLE and that he would drop by the wayside and profit from his publicity).
Be that as it may, NPR and Co were discussing the rise of fascist/neofascist parties and wondering
why there were doing so well. Easy answer: neoliberalism + refugee hoards = what you see in Europe.
I've also blamed a large part of today's gun violence in the USA on the fruits of neoliberalism.
Why? Same reason that ugly right-wing groups (fascist or not) are gaining ground around the Western
world. Neoliberalism destroys societies. It destroys the connections within societies (the USA
in this case). Because we have guns handy, the result is mass shootings and flashes of murder-suicides.
This didn't happen BEFORE neoliberalism got its hooks into American society. The guns were there,
always have been (when I was a teen I recall seeing gun mags advertising various "assault weapons"
for sale this was BEFORE Reagan and this was BEFORE mass shootings, etc). Machine guns were much
easier to come by BEFORE the 1980s yet we didn't have mass killings with machine guns, handguns,
or shotguns. ALL that stuff is a NEW disease. A disease rooted in neoliberalism. Neoliberalism
steals your job security, your healthcare security, your home, your retirement security, your
ability to provide for your family, your ability to send your kids to college, your ability to
BUY FOOD. Neoliberalism means you don't get to work for a company for 20 years and then see the
company pay you back for that long, good service with a pension. You'll be lucky to hold a job
at any company from month-to-month now and FORGET about benefits! Healthcare? Going by the wayside
too. Workers in the past felt a bond with each other, especially within a company. Neoliberalism
has turned all workers against each other because they have to fight to gain any of the scraps
being tossed out by the rich overlords. You can't work TOGETHER to gain mutual benefit, you need
to fight each other in a zero sum game. For ME to win you have to lose. You are a commodity. A
disposable and irrelevant widget. THAT combines with guns (that have always been available!) and
you get desperate acting out: mass shootings, murder suicides, etc.
There are actual fascist parties in Europe. To name a few in one country I've followed, Ukraine,
there's Right Sector, Svoboda, and others, and that's just one country. I don't think anyone calls
UKIP fascist.
@Praedor Your comment that Yves posted and this one are excellent. One of the most succinct
statements of neoliberalism and its worst effects that I have seen.
As to the cause of recent mass gun violence, I think you have truly nailed it. If one thinks
at all about the ways in which the middle class and lower have been squeezed and abused, it's
no wonder that a few of them would turn to violence. It's the same despair and frustration that
leads to higher suicide rates, higher rates of opiate addiction and even decreased life expectancy.
"Machine guns were much easier to come by BEFORE the 1980s yet we didn't have mass killings
with machine guns, handguns, or shotguns. ALL that stuff is a NEW disease. A disease rooted in
neoliberalism."
Easy availability of guns was seen as a serious problem long before the advent of neoliberalism.
For one example of articles about this, see U.S. Government Tried to Tackle Gun Violence in
1960s . Other examples include 1920s and 1930s gangster and mob violence that were a consequence
of Prohibition (of alcohol). While gun violence per-capita might be increasing, the population
is far larger today, and the news media select incidents of violence to make them seem like they're
happening everywhere and that everyone needs to be afraid. That, of course, instills a sense of
insecurity and fear into the public mind; thus, a fearful public want a strong leader and are
willing to accept the inconvenience and dangers of a police state for protection.
America has plenty of refugees, from Latin America
Neo-liberal goes back to the Monroe Doctrine. We used to tame our native workers with immigrants,
and we still do, but we also tame them by globalism in trade. So many rationalizations for this,
based on political and economic propaganda. All problems caused by the same cause American predatory
behavior. And our great political choice iron fist with our without velvet glove.
Germany, Belgium, France, Poland, Hungary, Romania, Turkey, Israel, Australia come to mind
(if one is allowed to participate in a European song contest, one is supposed to be part of Europe
:) They all have more or less fascist governments.
Once you realize that the ECB creates something like 60 billion euros a month, and gives nothing
to its citizens nor its nation-states, that means the money goes to corporations, which means
that the ECB, and by extension the whole EU, is a fascist construct (fascism being defined as
a government running on behalf of the corporations).
That's a fallacy. Corporatism is a feature of fascism, not the other way around.
None of the governments you mention, with the possible exception of Israel and Turkey, can
be called fascist in any meaningful sense.
Even the anti-immigration parties in the Western European countries you mention AfD, Front
National, Vlaams Belang only share their nationalism with fascist movements. And they are decidedly
anti-corporatist.
The problem here is one of semantics, really. You're using "fascist" interchangeably with "authoritarian",
which is a misnomer for these groups. The EU is absolutely anti-democratic, authoritarian, and
technocratic in a lot of respects, but it's not fascist. Both have corporatist tendencies, but
fascist corporatism was much more radical, much more anti-capitalist (in the sense that the capitalist
class was expected to subordinate itself to the State as the embodiment of the will of the Nation
or People, as were the other classes/corporate units). EU technocratic corporatism has none of
the militarism, the active fiscal policy, the drive for government supported social cohesion,
the ethno-nationalism, or millenarianism of Fascism.
The emergent Right parties like UKIP, FNP, etc. share far more with the Fascists, thought I'd
say they generally aren't yet what Fascists would have recognized as other Fascists in the way
that the NSDAP and Italian Fascists recognized each other -perhaps they're more like fellow travelers.
True, I posted a few minutes ago saying roughly the same thing but it seems to have gone
to moderation.
Another key feature of fascism is territorial expansionism. As far as I am aware, none
of the nationalist parties advocate invading other countries or retaking former colonies. Once
again, contemporary neoliberalism is far closer to fascism. But you are correct about both Israel
and Turkey our allies. They are much closer to the genuine article. But you won't hear those
complaining about the rise of fascism in Europe complaining too much about them.
When I was young, there were 4 divisions:
* who owned the means of production (public or private entities)
* who decided what those means were used for.
If it is a 'public entity' (aka government or regime) that decides what is built, we have a totalitarian
state, which can be 'communist' (if the means also belong the public entities like the government
or regional fractions of it) or 'fascist' (if the factories are still in private hands).
If it is the private owner of the production capacity who decides what is built, you get capitalism.
I don't recall any examples of private entities deciding what to do with public means of production
(mafia perhaps).
Sheldon Wolin
introduced
us to inverted totalitarism. While it is no longer the government that decides what must be
done, the private 'owners' just buy the government, the judiciary, the press, or whatever is needed
to achieve their means.
When I cite Germany, it is not so much AfD, but the 2/hour jobs I am worried about. When I cite
Belgium, it is not the fools of Vlaams Belang, but rather the un-taxing of corporations and the
tear-down of social justice that worries me.
But Jeff, is Wolin accurate in using the term "inverted totalitarianism" to try to capture
the nature of our modern extractive bureaucratic monolith that apparently functions in an environment
where "it is no longer the government that decides what must be done..simply.."private owners
just buy the government, the judiciary, the press, or whatever is needed to achieve their means."
Mirowski argues quite persuasively that the neoliberal ascendency does not represent the retreat
of the State but its remaking to strongly support a particular conception of a market society
that is imposed with the help of the State on our society.
For Mirowski, neoliberalism is definitely not politically libertarian or opposed to strong
state intervention in the economy and society.
Inverted totalitarianism is the mirror image of fascism, which is why so many are confused.
Fascism is just a easier term to use and more understandable by all. There is not a strict adherence
to fascism going on, but it's still totalitarian just the same.
Hi
I live in Europe as well, and what to think of Germany's AfD, Greece's Golden Dawn, the Wilder's
party in the Netherlands etc. Most of them subscribe to the freeloading, sorry free trading economic
policies of neoliberalism.
There's LePen in France and the far-right, fascist leaning party nearly won in Austria. The
far right in Greece as well. There's clearly a move to the far right in Europe. And then there's
the totalitarian mess that is Turkey. How much further this turn to a fascist leaning right goes
and how widespread remains to be seen, but it's clearly underway.
Searched 'current fascist movements europe' and got these active groups from wiki.
National Bolshevik Party-Belarus
Parti Communautaire National-Europιen Belgium
Bulgarian National Alliance Bulgaria
Nova Hrvatska Desnica Croatia
Ustae Croatia
National Socialist Movement of Denmark
La Cagoule France
National Democratic Party of Germany
Fascism and Freedom Movement Italy
Fiamma Tricolore Italy
Forza Nuova Italy
Fronte Sociale Nazionale Italy
Movimento Fascismo e Libertΰ Italy
Pērkonkrusts Latvia
Norges Nasjonalsosialistiske Bevegelse Norway
National Radical Camp (ONR) Poland
National Revival of Poland (NOP)
Polish National Community-Polish National Party (PWN-PSN)
Noua Dreaptă Romania
Russian National Socialist Party(formerly Russian National Union)
Barkashov's Guards Russia
National Socialist Society Russia
Nacionalni stroj Serbia
Otačastveni pokret Obraz Serbia
Slovenska Pospolitost Slovakia
Espaρa 2000 Spain
Falange Espaρola Spain
Nordic Realm Party Sweden
National Alliance Sweden
Swedish Resistance Movement Sweden
National Youth Sweden
Legion Wasa Sweden
SPAS Ukraine
Blood and Honour UK
British National Front UK
Combat 18 UK
League of St. George UK
National Socialist Movement UK
Nationalist Alliance UK
November 9th Society UK
Racial Volunteer Force UK
"Fascism" has become the prefered term of abuse applied indiscriminately by the right thinking
to any person or movement which they want to tar as inherently objectionable, and which can therefore
be dismissed without the tedium of actually engaging with them at the level of ideas.
Most of the people who like to throw this word around couldn't give you a coherant definition
of what exactly they understand it to signify, beyond "yuck!!"
In fairness even students of political ideology have trouble teasing out a cosistent system
of beliefs, to the point where some doubt fascism is even a coherent ideology. That hardly excuses
the intellectual vacuity of those who use it as a term of abuse, however.
Precisely 3,248 angels can fit on the head of a pin. Parsing the true definition of "fascism"
is a waste of time, broadly, fascism is an alliance of the state, the corporation, and the military,
anyone who doesn't see that today needs to go back to their textbooks.
As far as the definition "neo-liberalism" goes, yes it's a useful label. But let's keep it
simple: every society chooses how resources are allocated between Capital and Labor. The needle
has been pegged over on the Capital side for quite some time, my "start date" is when Reagan busted
the air traffic union. The hideous Republicans managed to sell their base that policies that were
designed to let companies be "competitive" were somehow good for them, not just for the owners
of the means of production.
The only way they have avoided complete revolt has been endless borrowing to fund entitlements,
once that one-time fix plays out the consequences will be apparent. The funding mechanism itself
(The Fed) has even morphed into a neo-liberal tool designed to enrich Capital while enslaving
Labor with the consequences.
"Every society chooses how resources are allocated between capital and labor." More specifically,
isn't it a struggle between various political/economic/cultural movements within a society which
chooses how resources are allocated between capital and labor.
Take, for example, the late 1880s-1890s in the U.S. During that time-frame there were powerful
agrarian populists movements and the beginnings of some labor/socialist movements from below,
while from above the property-production system was modified by a powerful political movement
advocating for more corporate administered markets over the competitive small-firm capitalism
of an earlier age.
It was this movement for corporate administered markets which won the battle and defeated/absorbed
the agrarian populists.
What are the array of such forces in 2016? What type of movement doe Trump represent? Sanders?
Clinton?
fascism is an alliance of the state, the corporation, and the military, anyone who doesn't
see that today needs to go back to their textbooks
Which textbooks specifically?
The article I cited above in Vox canvasses the opinion of five serious students of fascism,
and none of them believe Trump is a fascist. I'd be most interested in knowing what you
have been reading.
As for your definition of "fascism", it's obviously so vague and broad that it really doesn't
explain anything. To the extent it contains any insight it is that public institutions (the state),
private businesses (the corporation) and the armed forces all exert significant influence on public
policy. That and a buck and and a half will get you a cup of coffee. If anything it is merely
a very crude descriptive model of the political process. It doesn't define fascism as a particular
set of beliefs that make it a distinct political ideology that can be differentiated from other
ideologies (again, see the Vox article for a discussion of some of the beliefs that are arguably
characteristic of fascist movements). Indeed by your standard virtually every state that has ever
existed has to a greater or lesser extent been "fascist".
My objection to imprecise language here isn't merely pedantic. The leftist dismissal of
right wing populists like Trump (or increasingly influential European movements like Ukip, AfD,
and the Front national) as "fascist" is a reductionist rhetorical device intended to marginalize
them by implying their politics are so far outside of the mainstream that they do not need to
be taken seriously. Given that these movements are only growing in strength as faith in traditional
political movements and elites evaporate this is likely to produce exactly the opposite result.
Right wing populism isn't going to disappear just because the left keeps trying to wish it away.
Refusing to accept this basic political fact risks condemning the left rather than "the fascists"
to political irrelevance.
I moved to a small city/town in Iowa almost 20 years ago. Then, it still had something of a
Norman Rockwell quality to it, particularly in a sense of egalitarianism, and also some small
factory jobs which still paid something beyond a bare existence.
Since 2000, many of those jobs have left, and the population of the county has declined by
about 10%. Kmart, Penney's, and Sears have left as payday/title loan outfits, pawnshops, smoke
shops, and used car dealers have all proliferated.
Parts of the town now resemble a combination of Appalachia and Detroit. Sanders easily won
the caucuses here and, no, his supporters were hardly the latte sippers of someone's imagination,
but blue collar folks of all ages.
My tale is similar to yours. About 2 years ago, I accepted a transfer from Chicagoland to north
central Wisconsin. JC Penney left a year and a half ago, and Sears is leaving in about 3-4 months.
Kmart is long gone.
I was back at the old homestead over Memorial Day, and it's as if time has stood still. Home
prices still going up; people out for dinner like crazy; new & expensive automobiles everywhere.
But driving out of Chicagoland, and back through rural Wisconsin it is unmistakeable.
2 things that are new: The roads here are deteriorating FAST. In Price County, the road
commissioner said last night that their budget allows for resurfacing all the roads on a 200 year
basis. (Yes, that means there is only enough money to resurface all the county roads if spread
out over 200 years.) 2nd, there are dead deer everywhere on the side of the road. In years past,
they were promptly cleaned up by the highway department. Not any more. Gross, but somebody has
to do the dead animal clean up. (Or not. Don't tell Snotty Walker though.)
Anyway, not everything is gloom and doom. People seem outwardly happy. But if you're paying
attention, signs of stress and deterioration are certainly out there.
This Trump support seems like a form of political vandalism with Trump as the spray paint.
People generally feel frustrated with government, utterly powerless and totally left out as the
ranks of the precariat continue to grow. Trump appeals to the nihilistic tendencies of some people
who, like frustrated teens, have decided to just smashed things up for the hell of it. They think
a presidency mix of Caligula with Earl Scheib would be a funny hoot.
You also have the more gullible fundis who have actually deluded themselves into thinking the
man who is ultimate symbol of hedonism will deliver them from secularism because he says he will.
Authoritarians who seek solutions through strong leaders are usually the easiest to con because
they desperately want to believe in their eminent deliverance by a human deus ex machina. Plus
he is ostentatiously rich in a comfortably tacky way and a TV celebrity beats a Harvard law degree.
And why not the thinking goes the highly vaunted elite college Acela crowd has pretty much made
a pig's breakfast out of things. So much for meritocracy. Professor Harold Hill is going to give
River City a boys band.
Someone at American Conservative, when trying to get at why it's pointless to tell people
Trump will wreck the place, described him as a "hand grenade" lobbed into the heart of government.
You can't scare people with his crass-ness and destructive tendencies, because that's precisely
what his voters are counting on when/if he gets into government.
In other words, the MSM's fear is the clearest sign to these voters that their
political revolution is working. Since TPTB decided peaceful change (i.e. Sanders) was a non-starter,
then they get to reap the whirlwind.
Your phrase "Trump is political vandalism" is great. I don't think I've seen a better description.
NPR this morning was discussing Trump and his relationship with the press and the issues some
GOP leaders have with him. When his followers were discussed, the speakers closely circled your
vandalism point. Basically they said that his voters are angry with the power brokers and leaders
in DC and regardless of whether they think Trump's statements are heartfelt or just rhetoric,
they DO know he will stick it to those power brokers so that's good. Vandalism by a longer phrase.
Meritocracy was ALWAYS a delusional fraud. What you invariably get, after a couple of generations,
is a clique of elitists who define merit as themselves and reproduce it ad nauseam. Who still
believes in such laughable kiddie stories?
Besides, consumers need to learn to play the long game and suck up the "scurrilous attacks"
on their personal consumption habits for the next four years. The end of abortion for four years
is not important - lern2hand and lern2agency, and lern2cutyourrapist if it comes to that. What
is important is that the Democratic Party's bourgeois yuppie constituents are forced to defend
against GOP attacks on their personal and cultural interests with wherewithal that would have
been ordinarily spent to attend to their sister act with their captive constituencies.
If bourgeois Democrats hadn't herded us into a situation where individuals mean nothing outside
of their assigned identity groups and their corporate coalition duopoly, they wouldn't be reaping
the whirlwind today. Why, exactly, should I be sympathetic to exploitative parasites such as the
middle class?
There are all good ideas. However, population growth undermines almost all of them. Population
growth in America is immigrant based. Reverse immigration influxes and you are at least doing
something to reduce population growth.
How to "reverse immigration influxes"?
Stop accepting refugees. It's outrageous that refugees from for example, Somalia,
get small business loans, housing assistance, food stamps and lifetime SSI benefits while some
of our veterans are living on the street.
No more immigration amnesties of any kind.
Deport all illegal alien criminals.
Practice "immigrant family unification" in the country of origin. Even if you have
to pay them to leave. It's less expensive in the end.
Eliminate tax subsidies to American corn growers who then undercut Mexican farmers'
incomes through NAFTA, driving them into poverty and immigration north. Throw Hillary Clinton
out on her ass and practice political and economic justice to Central America.
I too am a lifetime registered Democrat and I will vote for Trump if Clinton gets the crown.
If the Democrats want my vote, my continuing party registration and my until recently sizeable
donations in local, state and national races, they will nominate Bernie. If not, then I'm an Independent
forevermore. They will just become the Demowhig Party.
Campaign Finance Reform: If you can't walk into a voting booth you cannot contribute,
or make all elections financed solely by government funds and make private contributions of
any kind to any politician illegal.
Re-institute Glass-Steagall but even more so. Limit the number of states a bank can
operate in. Make the Fed publicly owned, not privately owned by banks.
Completely revise corporate law, doing away with the legal person hood of corporations
and limit of liability for corporate officers and shareholders.
Single payer health care for everyone. Allow private health plans but do away with
health insurance as a deductible for business. Remove the AMA's hold on licensing of medical
schools which restricts the number of doctors.
Do away with the cap on Social Security wages and make all income, wages, capital gains,
interest, and dividends subject to taxation.
Impose tariffs to compensate for lower labor costs overseas and revise industry.
Cut the Defense budget by 50% and use that money for intensive infrastructure development.
Raise the national minimum wage to $15 and hour.
Severely curtail the revolving door from government to private industry with a 10 year
restriction on working for an industry you dealt with in any way as a government official.
Free public education including college (4 year degree).
Obama and Holder, allowing the banks to be above the law have them demi-gods, many of whom
are psychopaths and kleptocrats, and with their newly granted status, they are now re-shaping
the world in their own image. Prosecute these demi-gods and restore sanity. Don't and their greed
for our things will never end until nothings left.
This is why Hillary is so much more dangerous than trump, because she and the demi gods
are all on the same page. The TPP is their holy grail so I expect heaven and earth to be moved,
especially if it looks like some trade traitors are going to get knocked off in the election,
scoundrels like patty murray (dino, WA) will push to get it through then line up at the feed trough
to gorge on k street dough. I plan to vote stein if it's not Bernie, but am reserving commitment
until I see what kind of betrayals the dems have for me, if it's bad enough I'll go with the trump
hand grenade.
Totally agree tegnost, no more democratic neoliberals -- Patty Murray (up for re-election)
and Cantwell are both trade traitors and got fast track passed.
Two things are driving our troubles: over-population and globalization. The plutocrats
and kleptocrats have all the leverage over the rest of us laborers when the population of human
beings has increased seven-fold in the last 70 years, from a little over a billion to seven billions
(and growing) today. They are happy to let us freeze to death behind gas stations in order for
them to compete with other oligarchs in excess consumption.
This deserves a longer and more thoughtful comment, but I don't have the time this morning.
I have to fight commute traffic, because the population of my home state of California has doubled
from 19M in 1970 to an estimated 43M today (if you count the Latin American refugees and H1B's).
Thank you for mentioning the third rail of overpopulation. Too often, this giant category
of problems is ignored, because it makes people uncomfortable. The planet is finite, resources
on the planet are finite, yet the number of people keeps growing. We need to strive for a higher
quality of life, not a higher quantity of people.
The issue goes beyond "current neoliberals up for election", it is most of our political
establishment that has been corrupted by a system that provides for the best politicians money
can buy.
In the 1980's I worked inside the beltway witnessing the new cadre of apparatchiks that drove
into town on the Reagan coattails full of moral a righteousness that became deviant, parochial,
absolutist and for whom bi-partisan approaches to policy were scorned prodded on by new power
brokers promoting their gospels in early morning downtown power breakfasts. Sadly our politicians
no longer serve but seek a career path in our growing meritocratic plutocracy.
America has always been a country where a majority of the population has been poor. With
the exception of a fifty five year(1950-2005) year period where access to large quantities of
consumer debt by households was deployed to first to provide a wealth illusion to keep socialism
at bay, followed by a mortgage debt boom to both keep the system afloat and strip the accumulated
capital of the working class, i.e. home equity, the history of the US has been one of poverty
for the masses.
Further debt was foisted on the working class in the form of military Keynesianism, generating
massive fiscal deficits which are to be paid for via austerity in a neo-feudal economy.
"... Money, it seems to him, has somehow changed its role. It has "increased" (is that possible, he asks?) while at the same time it has become concentrated in fewer and fewer hands. It appears to seek to become an autonomous and dominating sector of economic life, functionally separated from production of real things, almost all of which seem to come from faraway places. "Real" actually begins to change its meaning, another topic more interesting still. This devotion to the world of money-making-money seems to have obsessed the lives of many of the most "important" Americans. Entire TV networks are devoted to it. They talk about esoteric financial instruments that to the ordinary citizen look more like exotically placed bets-on-credit in the casino than genuine ways to grow real-world business, jobs, wages, and family income. The few who are in position to master the game live material lives that were beyond what almost any formerly "wealthy" man or woman in Rip's prior life could even imagine ..."
"... children gone away and lost to either the relentless rootlessness of the trans-national economy or the virtual hell-world of meth and opioids and heroin and unending underemployed hopelessness. ..."
"... "If public life can suffer a metaphysical blow, the death of the labor question was that blow. For millions of working people, it amputated the will to resist." ..."
"... It's a Wonderful Life ..."
"... as educators ..."
"... OK, so I hear some of you saying, corporate America will never let this Civic Media get off the ground. My short answer to this is that corporations do what makes money for them, and in today's despairing political climate there's money to be made in sponsoring something truly positive, patriotic and constructive. ..."
"... I am paying an exorbitant subscription for the UK Financial Times at the moment. Anyway, the good news is that very regular articles are appearing where you can almost feel the panic at the populist uprisings. ..."
"... The kernel of Neoliberal Ideology: "There is no such a thing as society." (Margaret Thatcher). ..."
"... "In this postindustrial world not only is the labor question no longer asked, not only is proletarian revolution passι, but the proletariat itself seems passι. And the invisibles who nonetheless do indeed live there have internalized their nonexistence, grown demoralized, resentful, and hopeless; if they are noticed at all, it is as objects of public disdain. What were once called "blue-collar aristocrats"-skilled workers in the construction trades, for example-have long felt the contempt of the whole white-collar world. ..."
"... Or, we could replace Western liberal culture, with its tradition to consume and expand by force an unbroken chain from the Garden of Eden to Friedrich von Hayek, with the notion of maintenance and "enough". Bourgeois make-work holds no interest to me. ..."
"... My understanding of the data is that living standards increased around the world during the so-called golden age, not just in the U.S. (and Western Europe and Japan and Australia ). It could be that it was still imperialism at work, but the link between imperialism and the creation of the middle class is not straightforward. ..."
"... I thought neoliberalism was just the pogrom to make everyone rational agents as subscribed by our genetic / heraldic betters .. putting this orbs humans and resources in the correct "natural" order . ..."
"... Disheveled Marsupial for those thinking neoliberalism is not associated with libertarianism one only has to observe the decades of think tanks and their mouth organs roaming the planet . especially in the late 80s and 90s . bringing the might and wonders of the market to the great unwashed globally here libertarian priests rang in the good news to the great unwashed ..."
"... I would argue that neoliberalism is a program to define markets as primarily engaged in information processing and to make everyone into non-agents ( as not important at all to the proper functioning of markets). ..."
"... It also appears that neoliberals want to restrict democracy to the greatest extent possible and to view markets as the only foundation for truth without any need for input from the average individual. ..."
I am almost 70 years old, born and raised in New York City, still living in a near suburb.
Somehow, somewhere along the road to my 70th year I feel as if I have been gradually transported
to an almost entirely different country than the land of my younger years. I live painfully now
in an alien land, a place whose habits and sensibilities I sometimes hardly recognize, while unable
to escape from memories of a place that no longer exists. There are days I feel as I imagine a
Russian pensioner must feel, lost in an unrecognizable alien land of unimagined wealth, power,
privilege, and hyper-glitz in the middle of a country slipping further and further into hopelessness,
alienation, and despair.
I am not particularly nostalgic. Nor am I confusing recollection with sentimental yearnings
for a youth that is no more. But if I were a contemporary Rip Van Winkle, having just awakened
after, say, 30-40 years, I would not recognize my beloved New York City. It would be not just
the disappearance of the old buildings, Penn Station, of course, Madison Square Garden and its
incandescent bulb marquee on 50th and 8th announcing NYU vs. St. John's, and the WTC, although
I always thought of the latter as "new" until it went down. Nor would it be the disappearance
of all the factories, foundries, and manufacturing plants, the iconic Domino Sugar on the East
River, the Wonder Bread factory with its huge neon sign, the Swingline Staples building in Long
Island City that marked passage to and from the East River tunnel on the railroad, and my beloved
Schaeffer Beer plant in Williamsburg, that along with Rheingold, Knickerbocker, and a score of
others, made beer from New York taste a little bit different.
It wouldn't be the ubiquitous new buildings either, the Third Avenue ghostly glass erected
in the 70's and 80's replacing what once was the most concentrated collection of Irish gin mills
anywhere. Or the fortress-like castles built more recently, with elaborate high-ceilinged lobbies
decorated like a kind of gross, filthy-wealthy Versailles, an aesthetically repulsive style that
shrieks "power" in a way the neo-classical edifices of our Roman-loving founders never did. Nor
would it even be the 100-story residential sticks, those narrow ground-to-clouds skyscraper condominiums
proclaiming the triumph of globalized capitalism with prices as high as their penthouses, driven
ever upward by the foreign billionaires and their obsession with burying their wealth in Manhattan
real estate.
It is not just the presence of new buildings and the absence of the old ones that have this
contemporary Van Winkle feeling dyslexic and light-headed. The old neighborhoods have disintegrated
along with the factories, replaced by income segregated swatches of homogenous "real estate" that
have consumed space, air, and sunlight while sucking the distinctiveness out of the City. What
once was the multi-generational home turf for Jewish, Afro-American, Puerto Rican, Italian, Polak
and Bohunk families is now treated as simply another kind of investment, stocks and bonds in steel
and concrete. Mom's Sunday dinners, clothes lines hanging with newly bleached sheets after Monday
morning wash, stickball games played among parked cars, and evenings of sitting on the stoop with
friends and a transistor radio listening to Mel Allen call Mantle's home runs or Alan Freed and
Murray the K on WINS 1010 playing Elvis, Buddy Holly, and The Drifters, all gone like last night's
dreams.
Do you desire to see the new New York? Look no further than gentrifying Harlem for an almost
perfect microcosm of the city's metamorphosis, full of multi-million condos, luxury apartment
renovations, and Maclaren strollers pushed by white yuppie wife stay-at-homes in Marcus Garvey
Park. Or consider the "new" Lower East Side, once the refuge of those with little material means,
artists, musicians, bums, drug addicts, losers and the physically and spiritually broken - my
kind of people. Now its tenements are "retrofitted" and remodeled into $4000 a month apartments
and the new residents are Sunday brunching where we used to score some Mary Jane.
There is the "Brooklyn brand", synonymous with "hip", and old Brooklyn neighborhoods like Red
Hook and South Brooklyn (now absorbed into so desirable Park Slope), and Bushwick, another former
outpost of the poor and the last place I ever imagined would be gentrified, full of artists and
hipsters driving up the price of everything. Even large sections of my own Queens and the Bronx
are affected (infected?). Check out Astoria, for example, neighborhood of my father's family,
with more of the old ways than most but with rents beginning to skyrocket and starting to drive
out the remaining working class to who knows where.
Gone is almost every mom and pop store, candy stores with their egg creams and bubble gum cards
and the Woolworth's and McCrory's with their wooden floors and aisles containing ordinary blue
collar urgencies like thread and yarn, ironing boards and liquid bleach, stainless steel utensils
of every size and shape. Where are the locally owned toy and hobby stores like Jason's in Woodhaven
under the el, with Santa's surprises available for lay-away beginning in October? No more luncheonettes,
cheap eats like Nedicks with hot dogs and paper cones of orange drink, real Kosher delis with
vats of warm pastrami and corned beef cut by hand, and the sacred neighborhood "bar and grill",
that alas has been replaced by what the kids who don't know better call "dive bars", the detestable
simulacra of the real thing, slick rooms of long slick polished mahogany, a half-dozen wide screen
TV's blaring mindless sports contests from all over the world, over-priced micro-brews, and not
a single old rummy in sight?
Old Rip searches for these and many more remembered haunts, what Ray Oldenburg called the "great
good places" of his sleepy past, only to find store windows full of branded, high-priced, got-to-have
luxury-necessities (necessary if he/she is to be certified cool, hip, and successful), ridiculously
overpriced "food emporia", high and higher-end restaurants, and apparel boutiques featuring hardened
smiles and obsequious service reserved for those recognized by celebrity or status.
Rip notices too that the visible demographic has shifted, and walking the streets of Manhattan
and large parts of Brooklyn, he feels like what walking in Boston Back Bay always felt like, a
journey among an undifferentiated mass of privilege, preppy or 'metro-sexed' 20 and 30-somethings
jogging or riding bicycles like lean, buff gods and goddesses on expense accounts supplemented
by investments enriched by yearly holiday bonuses worth more than Rip earned in a lifetime.
Sitting alone on a park bench by the river, Rip reflects that more than all of these individual
things, however, he despairs of a city that seems to have been reimagined as a disneyfied playground
of the privileged, offering endless ways to self-gratify and philistinize in a clean, safe (safest
big city in U.S., he heard someone say), slick, smiley, center-of-the-world urban paradise, protected
by the new centurions (is it just his paranoia or do battle-ready police seem to be everywhere?).
Old ethnic neighborhoods are filled with apartment buildings that seem more like post-college
"dorms", tiny studios and junior twos packed with three or four "singles" roommates pooling their
entry level resources in order to pay for the right to live in "The City". Meanwhile the newer
immigrants find what place they can in Kingsbridge, Corona, Jamaica, and Cambria Heights, far
from the city center, even there paying far too much to the landlord for what they receive.
New York has become an unrecognizable place to Rip, who can't understand why the accent-less
youngsters keep asking him to repeat something in order to hear his quaint "Brooklyn" accent,
something like the King's English still spoken on remote Smith Island in the Chesapeake, he guesses
.
Rip suspects that this "great transformation" (apologies to Polanyi) has coincided, and is somehow
causally related, to the transformation of New York from a real living city into, as the former
Mayor proclaimed, the "World Capital" of financialized commerce and all that goes with it.
"Financialization", he thinks, is not the expression of an old man's disapproval but a way
of naming a transformed economic and social world. Rip is not an economist. He reads voraciously
but, as an erstwhile philosopher trained to think about the meaning of things, he often can't
get his head around the mathematical model-making explanations of the economists that seem to
dominate the more erudite political and social analyses these days. He has learned, however, that
the phenomenon of "capitalism" has changed along with his city and his life.
Money, it seems to him, has somehow changed its role. It has "increased" (is that possible,
he asks?) while at the same time it has become concentrated in fewer and fewer hands. It appears
to seek to become an autonomous and dominating sector of economic life, functionally separated
from production of real things, almost all of which seem to come from faraway places. "Real" actually
begins to change its meaning, another topic more interesting still. This devotion to the world
of money-making-money seems to have obsessed the lives of many of the most "important" Americans.
Entire TV networks are devoted to it. They talk about esoteric financial instruments that to the
ordinary citizen look more like exotically placed bets-on-credit in the casino than genuine ways
to grow real-world business, jobs, wages, and family income. The few who are in position to master
the game live material lives that were beyond what almost any formerly "wealthy" man or woman
in Rip's prior life could even imagine
.
Above all else is the astronomical rise in wealth and income inequality. Rip recalls that growing
up in the 1950's, the kids on his block included, along with firemen, cops, and insurance men
dads (these were virtually all one-parent income households), someone had a dad who worked as
a stock broker. Yea, living on the same block was a "Wall Streeter". Amazingly democratic, no?
Imagine, people of today, a finance guy drinking at the same corner bar with the sanitation guy.
Rip recalls that Aristotle had some wise and cautionary words in his Politics concerning the stability
of oligarchic regimes.
Last year I drove across America on blue highways mostly. I stayed in small towns and cities,
Zanesville, St. Charles, Wichita, Pratt, Dalhart, Clayton, El Paso, Abilene, Clarksdale, and many
more. I dined for the most part in local taverns, sitting at the bar so as to talk with the local
bartender and patrons who are almost always friendly and talkative in these spaces. Always and
everywhere I heard similar stories as my story of my home town. Not so much the specifics (there
are no "disneyfied" Lubbocks or Galaxes out there, although Oxford, MS comes close) but in the
sadness of men and women roughly my age as they recounted a place and time a way of life taken
out from under them, so that now their years are filled with decayed and dead downtowns, children
gone away and lost to either the relentless rootlessness of the trans-national economy or the
virtual hell-world of meth and opioids and heroin and unending underemployed hopelessness.
I am not a trained economist. My graduate degrees were in philosophy. My old friends call me
an "Eric Hoffer", who back in the day was known as the "longshoreman philosopher". I have been
trying for a long time now to understand the silent revolution that has been pulled off right
under my nose, the replacement of a world that certainly had its flaws (how could I forget the
civil rights struggle and the crime of Viet Nam; I was a part of these things) but was, let us
say, different. Among you or your informed readers, is there anyone who can suggest a book or
books or author(s) who can help me understand how all of this came about, with no public debate,
no argument, no protest, no nothing? I would be very much appreciative.
I'll just highlight this line for emphasis
"there are no "disneyfied" Lubbocks or Galaxes out there, although Oxford, MS comes close) but
in the sadness of men and women roughly my age as they recounted a place and time a way of life
taken out from under them, so that now their years are filled with decayed and dead downtowns,
children gone away and lost to either the relentless rootlessness of the trans-national economy
or the virtual hell-world of meth and opioids and heroin and unending underemployed hopelessness."
my best friend pretty much weeps every day.
I don't have a book to recommend. I do think you identify a really underemphasized central
fact of recent times: the joint processes by which real places have been converted into "real
estate" and real, messy lives replaced by safe, manufactured "experiences." This affects wealthy
and poor neighborhoods alike, in different ways but in neither case for the better.
I live in a very desirable neighborhood in one of those places that makes a lot of "Best of"
lists. I met a new neighbor last night who told me how he and his wife had plotted for years to
get out of the Chicago burbs, not only to our city but to this specific neighborhood, which they
had decided is "the one." (This sentiment is not atypical.) Unsurprisingly, property values in
the neighborhood have gone through the roof. Which, as far as I can tell, most everyone here sees
as an unmitigated good thing.
At the same time, several families I got to know because they moved into the neighborhood about
the same time we did 15-20 years ago, are cashing out and moving away, kids off to or out of college,
parents ready (and financed) to get on to the next phase and the next place. Of course, even though
our children are all Lake Woebegoners, there are no next generations staying in the neighborhood,
except of course the ones still living, or back, at "home." (Those families won't be going anywhere
for awhile!)
I can't argue that new money in the hood hasn't improved some things. Our formerly struggling
food co-op just finished a major expansion and upgrade. Good coffee is 5 minutes closer than it
used to be. But to my wife and me, the overwhelming feeling is that we are now outsiders here
in this neighborhood where we know all the houses and the old trees but not what motivates our
new neighbors. So I made up a word for it: unsettling (adj., verb, noun).
"If public life can suffer a metaphysical blow, the death of the labor question was that
blow. For millions of working people, it amputated the will to resist."
Christopher Lash in "Revolt of the Elites and the Betrayal of Democracy" mentions Ray Oldenburg's
"The Great Good Places: Cafes, Coffee Shops, Community Centers, Beauty Parlors, General Stores,
Bars, Hangouts and How they Got You through the Day."
He argued that the decline of democracy is directly related to the disappearance of what he
called third places:,
"As neighborhood hangouts give way to suburban shopping malls, or, on the other hand private
cocktail parties, the essentially political art of conversation is replaced by shoptalk or personal
gossip.
Increasingly, conversation literally has no place in American society. In its absence howor
better, wherecan political habits be acquired and polished?
Lasch finished he essay by noting that Oldenburg's book helps to identify what is missing from
our then newly emerging world (which you have concisely updated):
"urban amenities, conviviality, conversation, politicsalmost everything in part that makes
life worth living."
The best explainer of our modern situation that I have read is Wendell Berry. I suggest that
you start with "The Unsettling of America," quoted below.
"Let me outline briefly as I can what seem to me the characteristics of these opposite kinds
of mind. I conceive a strip-miner to be a model exploiter, and as a model nurturer I take the
old-fashioned idea or ideal of a farmer. The exploiter is a specialist, an expert; the nurturer
is not. The standard of the exploiter is efficiency; the standard of the nurturer is care. The
exploiter's goal is money, profit; the nurturer's goal is health - his land's health, his own,
his family's, his community's, his country's. Whereas the exploiter asks of a piece of land only
how much and how quickly it can be made to produce, the nurturer asks a question that is much
more complex and difficult: What is its carrying capacity? (That is: How much can be taken from
it without diminishing it? What can it produce dependably for an indefinite time?) The exploiter
wishes to earn as much as possible by as little work as possible; the nurturer expects, certainly,
to have a decent living from his work, but his characteristic wish is to work as well as possible.
The competence of the exploiter is in organization; that of the nurturer is in order - a human
order, that is, that accommodates itself both to other order and to mystery. The exploiter typically
serves an institution or organization; the nurturer serves land, household, community, place.
The exploiter thinks in terms of numbers, quantities, "hard facts"; the nurturer in terms of character,
condition, quality, kind."
I also think Prof. Patrick Deneen works to explain the roots (and progression) of decline.
I'll quote him at length here describing the modern college student.
"[T]he one overarching lesson that students receive is the true end of education: the only
essential knowledge is that know ourselves to be radically autonomous selves within a comprehensive
global system with a common commitment to mutual indifference. Our commitment to mutual indifference
is what binds us together as a global people. Any remnant of a common culture would interfere
with this prime directive: a common culture would imply that we share something thicker, an inheritance
that we did not create, and a set of commitments that imply limits and particular devotions.
Ancient philosophy and practice praised as an excellent form of government a res publica
a devotion to public things, things we share together. We have instead created the world's first
Res Idiotica from the Greek word idiotes, meaning "private individual." Our education system
produces solipsistic, self-contained selves whose only public commitment is an absence of commitment
to a public, a common culture, a shared history. They are perfectly hollowed vessels, receptive
and obedient, without any real obligations or devotions.
They won't fight against anyone, because that's not seemly, but they won't fight for anyone
or anything either. They are living in a perpetual Truman Show, a world constructed yesterday
that is nothing more than a set for their solipsism, without any history or trajectory."
Wow. Did this hit a nerve. You have eloquently described what was the city of hope for several
generations of outsiders, for young gay men and women, and for real artists, not just from other
places in America, but from all over the world. In New York, once upon a time, bumping up against
the more than 50% of the population who were immigrants from other countries, you could learn
a thing or two about the world. You could, for a while, make a living there at a job that was
all about helping other people. You could find other folks, lots of them, who were honest, well-meaning,
curious about the world. Then something changed. As you said, you started to see it in those hideous
80's buildings. But New York always seemed somehow as close or closer to Europe than to the U.S.,
and thus out of the reach of mediocrity and dumbing down. New York would mold you into somebody
tough and smart, if you weren't already if it didn't, you wouldn't make it there.
Now, it seems, this dream is dreamt. Poseurs are not artists, and the greedy and smug drive
out creativity, kindness, real humor, hope.
It ain't fair. I don't know where in this world an aspiring creative person should go now,
but it probably is not there.
Americans cannot begin to reasonably demand a living wage, benefits and job security when there
is an unending human ant-line of illegals and legal immigrants willing to under bid them.
Only when there is a parity or shortage of workers can wage demands succeed, along with other
factors.
From 1925 to 1965 this country accepted hardly any immigrants, legal or illegal. We had the
bracero program where Mexican males were brought in to pick crops and were then sent home to collect
paychecks in Mexico. American blacks were hired from the deep south to work defense plants in
the north and west.
Is it any coincidence that the 1965 Great Society program, initiated by Ted Kennedy to primarily
benefit the Irish immigrants, then co-opted by LBJ to include practically everyone, started this
process of Middle Class destruction?
1973 was the peak year of American Society as measured by energy use per capita, expansion
of jobs and unionization and other factors, such as an environment not yet destroyed, nicely measured
by the The Real Progress Indicator.
Solution? Stop importing uneducated people. That's real "immigration reform".
Now explain to me why voters shouldn't favor Trump's radical immigration stands?
Maybe, but OTOH, who is it, exactly, who is recruiting, importing, hiring and training undocumented
workers to downgrade pay scales??
Do some homework, please. If businesses didn't actively go to Central and South America to
recruit, pay to bring here, hire and employ undocumented workers, then the things you discuss
would be great.
When ICE comes a-knocking at some meat processing plant or mega-chicken farm, what happens?
The undocumented workers get shipped back to wherever, but the big business owner doesn't even
get a tap on the wrist. The undocumented worker hired to work in unregulated unsafe unhealthy
conditions often goes without their last paycheck.
It's the business owners who manage and support this system of undocumented workers because
it's CHEAP, and they don't get busted for it.
Come back when the USA actually enforces the laws that are on the books today and goes after
big and small business owners who knowingly recruit, import, hire, train and employee undocumented
workers you know, like Donald Trump has all across his career.
This is the mechanism by which the gov't has assisted biz in destroying the worker, competition
for thee, but none for me. For instance I can't go work in canada or mexico, they don't allow
it. Policy made it, policy can change it, go bernie. While I favor immigration, in it's current
form it is primarily conducted on these lines of destroying workers (H1b etc and illegals combined)
Lucky for the mexicans they can see the american dream is bs and can go home. I wonder who the
latinos that have gained citizenship will vote for. Unlikely it'll be trump, but they can be pretty
conservative, and the people they work for are pretty conservative so no guarantee there, hillary
is in san diego at the tony balboa park where her supporters will feel comfortable, not a huge
venue I think they must be hoping for a crowd, and if she can't get one in san diego while giving
a "if we don't rule the world someone else will" speech, she can't get one anywhere. Defense contractors
and military advisors and globalist biotech (who needs free money more than biotech? they are
desperate for hillary) are thick in san diego.
I live part-time in San Diego. It is very conservative. The military, who are constantly screwed
by the GOP, always vote Republican. They make up a big cohort of San Diego county.
Hillary may not get a big crowd at the speech, but that, in itself, doesn't mean that much
to me. There is a segment of San Diego that is somewhat more progressive-ish, but it's a pretty
conservative county with parts of eastern SD county having had active John Birch Society members
until recently or maybe even ongoing.
There's a big push in the Latino community to GOTV, and it's mostly not for Trump. It's possible
this cohort, esp the younger Latino/as, will vote for Sanders in the primary, but if Clinton gets
the nomination, they'll likely vote for her (v. Trump).
I was unlucky enough to be stuck for an hour in a commuter train last Friday after Trump's
rally there. Hate to sound rude, but Trump's fans were everything we've seen. Loud, rude, discourteous
and an incessant litany of rightwing talking points (same old, same old). All pretty ignorant.
Saying how Trump will "make us great again." I don't bother asking how. A lot of ugly comments
about Obama and how Obama has been "so racially divisive and polarizing." Well, No. No, Obama
has not been or done that, but the rightwing noise machine has sure ginned up your hatreds, angers
and fears. It was most unpleasant. The only instructive thing about it was confirming my worst
fears about this group. Sorry to say but pretty loutish and very uninformed. Sigh.
part timer in sd as well, family for hillary except for nephew and niece .I keep telling my
mom she should vote bernie for their sake but it never goes over very well
Re Methland, we live in rural US and we got a not-very-well hidden population of homeless children.
I don't mean homeless families with children, I mean homeless children. Sleeping in parks in good
weather, couch-surfing with friends, etc. I think related.
Fascism is a system of political and social order intended to reinforce the unity, energy and
purity of communities in which liberal democracy stand(s) accused of producing division and decline.
. . . George Orwell reminded us, clad in the mainstream patriotic dress of their own place and
time, . . . an authentically popular fascism in the United States would be pious and anti-Black;
in Western Europe, secular and antisemitic, or more probably, these days anti-Islamic; in Russia
and Eastern Europe, religious, antisemitic, and slavophile.
Robert O. Paxton
In The Five Stages of Faschism
" that eternal enemy: the conservative manipulators of privilege who damn as 'dangerous agitators'
any man who menaces their fortunes" (maybe 'power and celebrity' should be added to fortunes)
Sinclair Lewis
It Can't Happen Here page 141
On the Boots To Ribs Front: Anyone hereabouts notice that Captain America has just been revealed
to be a Nazi? Maybe this is what R. Cohen was alluding to but I doubt it.
The four horse men are, political , social, economic and environmental collapse . Any one remember
the original Mad Max movie. A book I recommend is the Crash Of 2016 By Thom Hartmann.
From the comment, I agree with the problems, not the cause. We've increased the size and scope
of the safety net over the last decade. We've increased government spending versus GDP. I'm not
blaming government but its not neoliberal/capitalist policy either.
1. Globalization clearly helps the poor in other countries at the expense of workers in the
U.S. But at the same time it brings down the cost of goods domestically. So jobs are not great
but Walmart/Amazon can sell cheap needs.
2. Inequality started rising the day after Bretton Woods the rich got richer everyday after
"Nixon Shock"
Hi rfam : To point 1 : Why is there a need to bring down the cost of goods? Is it because of
past outsourcing and trade agreements and FR policies? I think there's a chicken and egg thing
going on, ie.. which came first. Globalization is a way to bring down wages while supplying Americans
with less and less quality goods supplied at the hand of global corporations like Walmart that
need welfare in the form of food stamps and the ACA for their workers for them to stay viable
(?). Viable in this case means ridiculously wealthy CEO's and the conglomerate growing bigger
constantly. Now they have to get rid of COOL's because the WTO says it violates trade agreements
so we can't trace where our food comes from in case of an epidemic. It's all downhill. Wages should
have risen with costs so we could afford high quality American goods, but haven't for a long,
long time.
Globalization helps the rich here way more than the poor there. The elites get more money for
nothing (see QE before you respond, if you do, that's where the money for globalization came from)
the workers get the husk. Also the elite gets to say "you made your choices" and other moralistic
crap. The funny(?) thing is they generally claim to be atheists, which I translate into "I am
God, there doesn't need to be any other" Amazon sells cheap stuff by cheating on taxes, and barely
makes money, mostly just driving people out of business. WalMart has cheap stuff because they
subsidise their workers with food stamps and medicaid. Bringing up bretton woods means you don't
know much about money creation, so google "randy wray/bananas/naked capitalism" and you'll find
a quick primer.
The Walmart loathsome spawn and Jeff Bezos are the biggest welfare drains in our nation or
among the biggest. They woefully underpay their workers, all while training them on how to apply
for various welfare benefits. Just so that their slaves, uh, workers can manage to eat enough
to enable them to work.
It slays me when US citizens and it happens across the voting spectrum these days; I hear
just as often from Democratic voters as I do from GOP voters bitch, vetch, whine & cry about
welfare abuse. And if I start to point out the insane ABUSE of welfare by the Waltons and Jeff
Bezos, I'm immediately greeted with random TRUE stories about someone who knew someone who somehow
made out like a bandit on welfare.
Hey, I'm totally sure and in agreement that there are likely a small percentage of real welfare
cheats who manage to do well enough somehow. But seriously? That's like a drop in the bucket.
Get the eff over it!!!
Those cheats are not worth discussing. It's the big fraud cheats like Bezos & the Waltons and
their ilk, who don't need to underpay their workers, but they DO because the CAN and they get
away with it because those of us the rapidly dwindling middle/working classes are footing the
bill for it.
Citizens who INSIST on focusing on a teeny tiny minority of real welfare cheats, whilst studiously
ignoring the Waltons and the Bezos' of the corporate world, are enabling this behavior. It's one
of my bugabears bc it's so damn frustrating when citizens refuse to see how they are really being
ripped off by the 1%. Get a clue.
That doesn't even touch on all the other tax breaks, tax loopholes, tax incentives and just
general all-around tax cheating and off-shore money hiding that the Waltons and Bezos get/do.
Sheesh.
"I'm immediately greeted with random TRUE stories about someone who knew someone who somehow
made out like a bandit on welfare."
is the key and a v. long term result of the application of Bernays' to political life. Its
local and hits at the gut interpersonal level 'cos the "someones" form a kind of chain of trust
esp. if the the first one on the list is a friend or a credentialed media pundit. Utterly spurious
I know but countering this with a *merely* rational analysis of how Walmart, Amazon abuse the
welfare system to gouge profits from the rest of us just won't ever, for the large majority, get
through this kind emotional wall.
I don't know what any kind of solution might look like but, somehow, we need to find a way
of seriously demonising the corporate parasites that resonates at the same emotional level as
the "welfare cheat" meme that Bill Clinton and the rest of the DLC sanctified back in the '90s.
Something like "Walmart's stealing your taxes" might work but how to get it out there in a
viral way ??
What a comment from seanseamour. And the "hoisting" of it to high visibility at the site is
a testament to the worth of Naked Capitalism.
seanseamour asks "What does that have to do with education?" and answers "Everything if one
considers the elitist trend " This question & answer all but brings tears to my eyes. It is so
utterly on point. My own experience of it, if I may say so, comes from inside the belly of the
beast. As a child and a product of America's elite universities (I have degrees from Harvard and
Yale, and my dad, Richard B. Sewall, was a beloved English prof at Yale for 42 years), I could
spend all morning detailing the shameful roles played by America's torchbearing universities
Harvard, Yale, Stanford etc in utterly abandoning their historic responsibility as educators
to maintaining the health of the nation's public school system.*
And as I suspect seanseymour would agree, when a nation loses public education, it loses everything.
But I don't want to spend all morning doing that because I'm convinced that it's not too late
for America to rescue itself from maelstrom in which it finds itself today. (Poe's "Maelstrom"
story, cherished by Marshall McLuhan, is supremely relevant today.)
To turn America around, I don't look to education that system is too far gone to save itself,
let alone the rest of the country but rather to the nation's media: to the all-powerful public
communication system that certainly has the interactive technical capabilities to put citizens
and governments in touch with each other on the government decisions that shape the futures of
communities large and small.
For this to happen, however, people like the us readers of Naked Capitalism need to stop
moaning and groaning about the damage done by the neoliberals and start building an issue-centered,
citizen-participatory, non-partisan, prime-time Civic Media strong enough to give all Americans
an informed voice in the government decisions that affect their lives. This Civic media would
exist to make citizens and governments responsive and accountable to each other in shaping futures
of all three communities local, state and national of which every one of us is a member.
Pie in the sky? Not when you think hard about it. A huge majority of Americans would welcome
this Civic Media. Many yearn for it. This means that a market exists for it: a Market of the Whole
of all members of any community, local, state and national. This audience is large enough to rival
those generated by media coverage of pro sports teams, and believe it or not much of the growth
of this Civic media could be productively modeled on the growth of media coverage of pro sports
teams. This Civic Media would attract the interest of major advertisers, especially those who
see value in non-partisan programming dedicated to getting America moving forward again. Dynamic,
issue-centered, problem-solving public forums, some modeled on voter-driven reality TV contests
like The Voice or Dancing with the Stars, could be underwritten by a "rainbow" spectrum of funders,
commericial, public, personal and even government sources.
So people take hope! Be positive! Love is all we need, etc. The need for for a saving alternative
to the money-driven personality contests into which our politics has descended this election year
is literally staring us all in the face from our TV, cellphone and computer screens. This is no
time to sit back and complain, it's a time to start working to build a new way of connecting ourselves
so we can reverse America's rapid decline.
OK, so I hear some of you saying, corporate America will never let this Civic Media get
off the ground. My short answer to this is that corporations do what makes money for them, and
in today's despairing political climate there's money to be made in sponsoring something truly
positive, patriotic and constructive. And I hear a few others saying that Americans are too
dumbed down, too busy, too polarized or too just plain stupid to make intelligent, constructive
use of a non-partisan, problem-solving Civic Media. But I would not underestimate the intelligence
of Americans when they can give their considered input by vote, by comment or by active participation
in public forums that are as exciting and well managed as an NFL game or a Word Series final.
I am paying an exorbitant subscription for the UK Financial Times at the moment. Anyway,
the good news is that very regular articles are appearing where you can almost feel the panic
at the populist uprisings.
Whatever system is put in place the human race will find a way to undermine it. I believe in
capitalism because fair competition means the best and most efficient succeed.
I send my children to private schools and universities because I want my own children at the
top and not the best. Crony capitalism is inevitable, self-interest undermines any larger system
that we try and impose.
Can we design a system that can beat human self-interest? It's going to be tricky.
"If that's the system, how can I take advantage of it?" human nature at work. "If that's the
system, is it working for me or not?" those at the top.
If not, it's time to change the system.
If so, how can I tweak it to get more out of it?
Neo-Liberalism
Academics, who are not known for being street-wise, probably thought they had come up with
the ultimate system using markets and numeric performance measures to create a system free from
human self-interest.
They had already missed that markets don't just work for price discovery, but are frequently
used for capital gains by riding bubbles and hoping there is a "bigger fool" out there than you,
so you can cash out with a handsome profit.
(I am not sure if the Chinese realise markets are supposed to be for price discovery at all).
Hence, numerous bubbles during this time, with housing bubbles being the global favourite for
those looking for capital gains.
If we are being governed by the markets, how do we rig the markets?
A question successfully solved by the bankers.
Inflation figures, that were supposed to ensure the cost of living didn't rise too quickly,
were somehow manipulated to produce low inflation figures with roaring house price inflation raising
the cost of living.
What unemployment measure will best suit the story I am trying to tell?
U3 everything great
U6 it's not so good
Labour participation rate it hasn't been this bad since the 1970s
Anything missing from the theory has been ruthlessly exploited, e.g. market bubbles ridden
for capital gains, money creation by private banks, the difference between "earned" and "unearned"
income and the fact that Capitalism trickles up through the following mechanism:
1) Those with excess capital collect rent and interest.
2) Those with insufficient capital pay rent and interest.
I just went on a rant last week. (Not only because the judge actually LIED in court)
I left the courthouse in downtown Seattle, to cross the street to find the vultures selling
more foreclosures on the steps of the King County Administration Building, while above them, there
were tents pitched on the building's perimeter. And people were walking by just like this scene
was normal.
Because the people at the entrance of the courthouse could view this, I went over there and
began to rant. I asked (loudly) "Do you guys see that over there? Vultures selling homes rendering
more people homeless and then the homeless encampment with tents pitched on the perimeter above
them? In what world is this normal?" One guy replied, "Ironic, isn't it?" After that comment,
the Marshall protecting the judicial crooks in the building came over and tried to calm me down.
He insisted that the scene across the street was "normal" and that none of his friends or neighbors
have been foreclosed on. I soon found out that that lying Marshall was from Pierce County, the
epicenter of Washington foreclosures.
"In this postindustrial world not only is the labor question no longer asked, not only
is proletarian revolution passι, but the proletariat itself seems passι. And the invisibles who
nonetheless do indeed live there have internalized their nonexistence, grown demoralized, resentful,
and hopeless; if they are noticed at all, it is as objects of public disdain. What were once called
"blue-collar aristocrats"-skilled workers in the construction trades, for example-have long felt
the contempt of the whole white-collar world.
For these people, already skeptical about who runs things and to what end, and who are now
undergoing their own eviction from the middle class, skepticism sours into a passive cynicism.
Or it rears up in a kind of vengeful chauvinism directed at alien others at home and abroad, emotional
compensation for the wounds that come with social decline If public life can suffer a metaphysical
blow, the death of the labor question was that blow. For millions of working people, it amputated
the will to resist."
One thing I don't think I have seen addressed on this site (apologies if I have missed it!)
in all the commentary about the destruction of the middle class is the role of US imperialism
in creating that middle class in the first place and what it is that we want to save from destruction
by neo-liberalism. The US is rich because we rob the rest of the world's resources and have been
doing so in a huge way since 1945, same as Britain before us. I don't think it's a coincidence
that the US post-war domination of the world economy and the middle class golden age happened
at the same time. Obviously there was enormous value created by US manufacturers, inventors, government
scientists, etc but imperialism is the basic starting point for all of this. The US sets the world
terms of trade to its own advantage. How do we save the middle class without this level of control?
Within the US elites are robbing everyone else but they are taking what we use our military power
to appropriate from the rest of the world.
Second, if Bernie or whoever saves the middle class, is that so that everyone can have a tract
house and two cars and continue with a massively wasteful and unsustainable lifestyle based on
consumption? Or are we talking about basic security like shelter, real health care, quality education
for all, etc? Most of the stories I see seem to be nostalgic for a time when lots of people could
afford to buy lots of stuff and don't 1) reflect on origin of that stuff (imperialism) and 2)
consider whether that lifestyle should be the goal in the first place.
I went to the electronics recycling facility in Seattle yesterday. The guy at customer service
told me that they receive 20 million pounds per month. PER MONTH. Just from Seattle. I went home
and threw up.
It doesn't have to be that way. You can replace military conquest (overt and covert) with space
exploration and science expansion. Also, instead of pushing consumerism, push contentment. Don't
setup and goose a system of "gotta keep up with the Joneses!"
In the 50s(!!!) there was a plan, proven in tests and studies, that would have had humans on
the mars by 1965, out to Saturn by 72. Project Orion. Later, the British Project Daedalus was
envisioned which WOULD have put space probes at the next star system within 20 years of launch.
It was born of the atomic age and, as originally envisioned, would have been an ecological disaster
BUT it was reworked to avoid this and would have worked. Spacecraft capable of comfortably holding
100 personnel, no need to build with paper-thin aluminum skin or skimp on amenities. A huge ship
built like a large sea vessel (heavy iron/steel) accelerated at 1g (or more or slightly less as
desired) so no prolonged weightlessness and concomitant loss of bone and muscle mass. It was all
in out hands but the Cold War got in the way, as did the many agreements and treaties of the Cold
War to avoid annihilation. It didn't need to be that way. Check it out:
https://en.wikipedia.org/wiki/Project_Orion_(nuclear_propulsion)
All that with 1950s and 60s era technology. It could be done better today and for less than
your wars in the Middle East. Encourage science, math, exploration instead of consumption, getting
mine before you can get yours, etc.
Or, we could replace Western liberal culture, with its tradition to consume and expand
by force an unbroken chain from the Garden of Eden to Friedrich von Hayek, with the notion of
maintenance and "enough". Bourgeois make-work holds no interest to me.
My understanding of the data is that living standards increased around the world during
the so-called golden age, not just in the U.S. (and Western Europe and Japan and Australia ).
It could be that it was still imperialism at work, but the link between imperialism and the creation
of the middle class is not straightforward.
Likewise, US elites are clearly NOT robbing the manufacturing firms that have set up in China
and other low-wage locations, so it is an oversimplification to say they are "robbing everyone
else."
Nostalgia is overrated but I don't sense the current malaise as a desire for more stuff. (I
grew up in the 60s and 70s and I don't remember it as a time where people had, or craved, a lot
of stuff. That period would be now, and I find it infects Sanders' supporters less than most.)
If anything, it is nostalgia for more (free) time and more community, for a time when (many but
not all) people had time to socialize and enjoy civic life.
those things would be nice as would just a tiny bit of hope for the future, our own and the
planet's and not an expectation of things getting more and more difficult and sometimes for entirely
unnecessary reasons like imposed austerity. But being we can't have "nice things" like free time,
community and hope for the future, we just "buy stuff".
I live on the south side, in the formerly affluent south shore neighborhood. A teenager was
killed, shot in the head in a drive by shooting, at 5 pm yesterday right around the corner from
my residence. A white coworker of mine who lives in a rich northwest side neighborhood once commented
to me how black people always say goodbye by saying "be safe". More easily said than done.
I thought neoliberalism was just the pogrom to make everyone rational agents as subscribed
by our genetic / heraldic betters .. putting this orbs humans and resources in the correct "natural"
order .
Disheveled Marsupial for those thinking neoliberalism is not associated with libertarianism
one only has to observe the decades of think tanks and their mouth organs roaming the planet .
especially in the late 80s and 90s . bringing the might and wonders of the market to the great
unwashed globally here libertarian priests rang in the good news to the great unwashed
I would argue that neoliberalism is a program to define markets as primarily engaged in
information processing and to make everyone into non-agents ( as not important at all to the proper
functioning of markets).
It also appears that neoliberals want to restrict democracy to the greatest extent possible
and to view markets as the only foundation for truth without any need for input from the average
individual.
But as Mirowski arguescarrying their analysis this far begins to undermine their own neoliberal
assumptions about markets always promoting social welfare.
When I mean agents I'm not referring to agency, like you say the market gawd/computer does
that. I was referencing the rational agent that 'ascribes' the markets the right at defining
facts or truth as neoliberalism defines rational thought/behavior.
Disheveled Marsupial yes democracy is a direct threat to Hayekian et al [MPS and Friends]
paranoia due to claims of irrationality vs rationally
I have trouble understanding the focus on an emergence of fascism in Europe, focus that seems
to dominate this entire thread when, put in perspective such splinter groups bear little weight
on the European political spectrum.
As an expat living in France, in my perception the Front National is a threat to the political
establishments that occupy the center left and right and whose historically broad constituencies
have been brutalized by the financial crisis borne of unbridled anglo-saxon runaway capitalism,
coined neoliberalism. The resulting disaffection has allowed the growth of the FN but it is also
fueled by a transfer of reactionary constituencies that have historically found identity in far
left parties (communist, anti-capitalist, anarchist ), political expressions the institutions
of the Republic allow and enable in the name of plurality, a healthy exultury in a democratic
society.
To consider that the FN in France, UKIP in the UK and others are a threat to democratic values
any more that the far left is non-sensical, and I dare say insignificant compared to the "anchluss"
our conservative right seeks to impose upon the executive, legislative and judicial branches of
government.
The reality in Europe as in America is economic. The post WWII era of reconstruction, investment
and growth is behind us, the French call these years the "Trente Glorieuses" (30 glorious years)
when prosperity was felt through all societal strats, consumerism for all became the panacea for
a just society, where injustice prevailed welfare formulas provided a new panacea.
As the perspective of an unravelling of this golden era began to emerge elites sought and conspired
to consolidate power and wealth, under the aegis of greed is good culture by further corrupting
government to serve the few, ensuring impunity for the ruling class, attempting societal cohesiveness
with brash hubristic dialectics (America, the greatest this or that) and adventurism (Irak, mission
accomplished), conspiring to co-opt and control institutions and the media (to understand the
depth of this deception a must read is Jane Mayer in The Dark Side and in Dark Money).
The difference between America and Europe is that latter bears of brunt of our excess.
The 2008 Wall St / City meltdown eviscerated much of America' middle class and de-facto stalled,
perhaps definitively, the vehicle of upward mobility in an increasingly wealth-ranked class structured
society the Trump phenomena feeds off the fatalistic resilience and "good book" mythologies
remnant of the "go west" culture.
In Europe where to varying degrees managed capitalism prevails the welfare state(s) provided the
shock absorbers to offset the brunt of the crisis, but those who locked-in on neoliberal fiscal
conservatism have cut off their nose in spite leaving scant resources to spur growth. If social
mobility survives, more vibrantly than the US, unemployment and the cost thereof remains steadfast
and crippling.
The second crisis borne of American hubris is the human tidal wave resulting from the Irak adventure;
it has unleashed mayhem upon the Middle East, Sub Saharan Africa and beyond. The current migrational
wave Europe can not absorb is but the beginning of much deeper problem as ISIS, Boko Haram and
so many others terrorist groups destabilize the nation-states of a continent whose population
is on the path to explode in the next half century.
The icing on the cake provided by a Trump election will be a world wave of climate change refugees
as the neoliberal establishment seeks to optimize wealth and power through continued climate change
denial.
Fascism is not the issue, nationalism resulting from a self serving bully culture will decimate
the multilateral infrastructure responsible nation-states need to address today's problems.
Broadly, Trump Presidency capping the neoliberal experience will likely signal the end of the
US' dominant role on the world scene (and of course the immense benefits derived for the US).
As he has articulated his intent to discard the art of diplomacy, from soft to institutional,
in favor of an agressive approach in which the President seeks to "rattle" allies (NATO, Japan
and S. Korea for example) as well as his opponents (in other words anyone who does not profess
blind allegiance), expect that such modus operandi will create a deep schism accompanied by a
loss of trust, already felt vis-a-vis our legislature' behavior over the last seven years.
The US's newfound respect among friends and foes generated by President Obama' presidency, has
already been undermined by the GOP primaries, if Trump is elected it will dissipate for good as
other nations and groups thereof focus upon new, no-longer necessarily aligned strategic relationships,
some will form as part as a means of taking distance, or protection from the US, others more opportunist
with the risk of opponents such as Putin filling the void in Europe for example.
Neoliberalism isn't helping, but it's a population/resource ratio thing. Impacts on social
orders occur well before raw supply factors kick in (and there is more than food supply to basic
rations). The world population has more than doubled in the last 50 years, one doesn't get that
kind of accelerated growth without profound impacts to every aspect of societies. Some of the
most significant impacts are consequent to the acceleration of technological changes (skill expirations,
automations) that are driven in no small part by the needs of a vast + growing population.
I don't suggest population as a pat simplistic answer. And neoliberalism accelerates the declining
performance of institutions (as in the CUNY article and that's been going on for decades already,
neoliberalism just picked up where neoconservatism petered out), but we would be facing issues
like homelessness, service degradation, population displacements, etc regardless of poor policies.
One could argue (I do) that neoliberalism has undertaken to accelerate existing entropies for
profit.
Thanks for soliciting reader comments on socioeconomic desperation. It's encouraging to know
that I'm not the only failure to launch in this country.
I'm a seasonal farm worker with a liberal arts degree in geology and history. I barely held
on for six months as a junior environmental consultant at a dysfunctional firm that tacitly encouraged
unethical and incompetent behavior at all levels. From what I could gather, it was one of the
better-run firms in the industry. Even so, I was watching mid-level and senior staff wander into
extended mid-life crises while our entire service line was terrorized by a badly out-of-shape,
morbidly obese, erratic, vicious PG who had alienated almost the entire office but was untouchable
no matter how many firing offenses she committed. Meanwhile I was watching peers in other industries
(especially marketing and FIRE) sell their souls in real time. I'm still watching them do so a
decade later.
It's hard to exaggerate how atrociously I've been treated by bougie conformists for having
failed/dropped out of the rat race. A family friend who got into trouble with the state of Hawaii
for misclassifying direct employees of his timeshare boiler room as 1099's gave me a panic attack
after getting stoned and berating me for hours about how I'd wake up someday and wonder what the
fuck I'd done with my life. At the time, I had successfully completed a summer job as the de facto
lead on a vineyard maintenance crew and was about to get called back for the harvest, again as
the de facto lead picker.
Much of my social life is basically my humiliation at the hands of amoral sleazeballs who presume
themselves my superiors. No matter how strong an objective case I have for these people being
morally bankrupt, it's impossible to really dismiss their insults. Another big component is concern-trolling
from bourgeois supremacists who will do awfully little for me when I ask them for specific help.
I don't know what they're trying to accomplish, and they probably don't, either. A lot of it is
cognitive dissonance and incoherence.
Some of the worst aggression has come from a Type A social climber friend who sells life insurance.
He's a top producer in a company that's about a third normal, a third Willy Loman, and a third
Glengarry Glen Ross. This dude is clearly troubled, but in ways that neither of us can really
figure out, and a number of those around him are, too. He once admitted, unbidden, to having hazed
me for years.
The bigger problem is that he's surrounded by an entire social infrastructure that enables
and rewards noxious, predatory behavior. When college men feel like treating the struggling like
garbage, they have backup and social proof from their peers. It's disgusting. Many of these people
have no idea of how to relate appropriately to the poor or the unemployed and no interest in learning.
They want to lecture and humiliate us, not listen to us.
Dude recently told me that our alma mater, Dickinson College, is a "grad school preparatory
institution." I was floored that anyone would ever think to talk like that. In point of fact,
we're constantly lectured about how versatile our degrees are, with or without additional education.
I've apparently annoyed a number of Dickinsonians by bitterly complaining that Dickinson's nonacademic
operations are a sleazy racket and that President Emeritus Bill Durden is a shyster who brainwashed
my classmates with crude propaganda. If anything, I'm probably measured in my criticism, because
I don't think I know the full extent of the fraud and sleaze. What I have seen and heard is damning.
I believe that Dickinson is run by people with totalitarian impulses that are restrained only
by a handful of nonconformists who came for the academics and are fed up with the propaganda.
Meanwhile, I've been warm homeless for most of the past four years. It's absurd to get pledge
drive pitches from a well-endowed school on the premise that my degree is golden when I'm regularly
sleeping in my car and financially dependent on my parents. It's absurd to hear stories about
how Dickinson's alumni job placement network is top-notch when I've never gotten a viable lead
from anyone I know from school. It's absurd to explain my circumstances in detail to people who,
afterwards, still can't understand why I'm cynical.
While my classmates preen about their degrees, I'm dealing with stuff that would make them
vomit. A relative whose farm I've been tending has dozens of rats infesting his winery building,
causing such a stench that I'm just about the only person willing to set foot inside it. This
relative is a deadbeat presiding over a feudal slumlord manor, circumstances that he usually justifies
by saying that he's broke and just trying to make ends meet. He has rent-paying tenants living
on the property with nothing but a pit outhouse and a filthy, disused shower room for facilities.
He doesn't care that it's illegal. One of his tenants left behind a twenty-gallon trash can full
to the brim with his own feces. Another was seen throwing newspaper-wrapped turds out of her trailer
into the weeds. They probably found more dignity in this than in using the outhouse.
When I was staying in Rancho Cordova, a rough suburb of Sacramento, I saw my next-door neighbor
nearly come to blows with a man at the light rail station before apologizing profusely to me,
calling me "sir," "man," "boss," and "dog." He told me that he was angry at the other guy for
selling meth to his kid sister. Eureka is even worse: its west side is swarming with tweakers,
its low-end apartment stock is terrible, no one brings the slumlords to heel, and it has a string
of truly filthy residential motels along Broadway that should have been demolished years ago.
A colleague who lives in Sweet Home, Oregon, told me that his hometown is swarming with druggies
who try to extract opiates from local poppies and live for the next arriving shipment of garbage
drugs. The berry farm where we worked had ten- and twelve-year-olds working under the table to
supplement their families' incomes. A Canadian friend told me that he worked for a crackhead in
Lillooet who made his own supply at home using freebase that he bought from a meathead dealer
with ties to the Boston mob. Apparently all the failing mill towns in rural BC have a crack problem
because there's not much to do other than go on welfare and cocaine. An RCMP sergeant in Kamloops
was recently indicted for selling coke on the side.
Uahsenaa's comment about the invisible homeless is spot on. I think I blend in pretty well.
I've often stunned people by mentioning that I'm homeless. Some of them have been assholes about
it, but not all. There are several cars that I recognize as regular overnighters at my usual rest
area. Thank God we don't get hassled much. Oregon is about as safe a place as there is to be homeless.
Some of the rest areas in California, including the ones at Kingsburg and the Sacramento Airport,
end up at or beyond capacity overnight due to the homeless. CalTrans has signs reminding drivers
that it's rude to hog a space that someone else will need. This austerity does not, of course,
apply to stadium construction for the Kings.
Another thing that almost slipped my mind (and is relevant to Trump's popularity): I've encountered
entrenched, systemic discrimination against Americans when I've tried to find and hold menial
jobs, and I've talked to other Americans who have also encountered it. There is an extreme bias
in favor of Mexican peasants and against Americans in the fields and increasingly in off-farm
jobs. The top quintile will be lucky not to reap the whirlwind on account of this prejudice.
"... The number one issue fueling the leave vote was immigration a lot like Trump's wall against Mexico. The number two issue was lack of accountability of government: Leavers believe that the EU government in Brussels is unaccountable to voters. For Trump supporters, resentment towards a distant and unaccountable Washington government ranks high as well. The Brexit constituency and the Trump constituency are both motivated by the same sense of loss and vulnerability. ..."
"... In both the U.S. and the U.K., a large and growing segment of voters has not prospered in today's complex, technology-driven global economy. Their wages have stagnated and in many cases fallen. Too few good-paying jobs exist for people lacking a college degree, or even people with a college degree, if the degree is not in the right field. These people are angry, frustrated, and afraid -- and with very good reason. Both countries' governments have done little to help them adapt, and little to soothe the sting of globalization. The voter's concerns in both places are mostly the same even though these concerns have coalesced around a policy issue ("leave") in the U.K. whereas here in the U.S. they have coalesced around a candidate (Trump). ..."
"... Similarly, the elite insiders of the Republican Party and their business allies badly underestimated Trump. Establishment candidates like former Florida Gov. Jeb Bush failed terribly. Now the Republican political insiders are trying to make sense of a presumptive nominee who trashes free trade, one of the fundamental principles of the party, and openly taunts one of most important emerging voting blocks. ..."
"... Perhaps the biggest reason for the impotence of today's political elites is that elites have trashed the very idea of competent and effective government for 35 years now, and the public has taken the message to heart. Ever since Reagan identified government as the problem, conservative elites have attacked the idea of government itself rather than respecting the idea of government itself while criticizing the particular policies of a particular government. This is a crucial (and dangerous) distinction. In 1986, Reagan went on to say "the nine most terrifying words in the English language are 'I'm from the government and I'm here to help.'" ..."
In addition, the issues are similar between the two campaigns: The number
one issue fueling the leave vote was immigration a lot like Trump's wall against
Mexico. The number two issue was lack of accountability of government: Leavers
believe that the EU government in Brussels is unaccountable to voters. For Trump
supporters, resentment towards a distant and unaccountable Washington government
ranks high as well. The Brexit constituency and the Trump constituency are both
motivated by the same sense of loss and vulnerability.
In both the U.S. and the U.K., a large and growing segment of voters
has not prospered in today's complex, technology-driven global economy. Their
wages have stagnated and in many cases fallen. Too few good-paying jobs exist
for people lacking a college degree, or even people with a college degree, if
the degree is not in the right field. These people are angry, frustrated, and
afraid -- and with very good reason. Both countries' governments have done little
to help them adapt, and little to soothe the sting of globalization. The voter's
concerns in both places are mostly the same even though these concerns have
coalesced around a policy issue ("leave") in the U.K. whereas here in the U.S.
they have coalesced around a candidate (Trump).
In both countries, political elites were caught flat-footed. Elites lost
control over the narrative and lost credibility and persuasiveness with angry,
frustrated and fearful voters. The British elites badly underestimated the intensity
of public frustration with immigration and with the EU. Most expected the vote
would end on the side of "remain," up to the very last moment. Now they are
trying to plot their way out of something they never expected would actually
happen, and never prepared for.
Similarly, the elite insiders of the Republican Party and their business
allies badly underestimated Trump. Establishment candidates like former Florida
Gov. Jeb Bush failed terribly. Now the Republican political insiders are trying
to make sense of a presumptive nominee who trashes free trade, one of the fundamental
principles of the party, and openly taunts one of most important emerging voting
blocks.
How did the elites lose control? There are many reasons: With social media
so pervasive, advertising dollars no longer controls what the public sees and
hears. With unrestricted campaign spending, the party can no longer "pinch the
air hose" of a candidate who strays from party orthodoxy.
Perhaps the biggest reason for the impotence of today's political elites
is that elites have trashed the very idea of competent and effective government
for 35 years now, and the public has taken the message to heart. Ever since
Reagan identified government as the problem, conservative elites have attacked
the idea of government itself rather than respecting the idea
of government itself while criticizing the particular policies of a particular
government. This is a crucial (and dangerous) distinction. In 1986, Reagan went
on to say "the nine most terrifying words in the English language are 'I'm from
the government and I'm here to help.'"
Reagan booster Grover Norquist is known for saying, "I don't want to abolish
government. I simply want to reduce it to the size where I can drag it into
the bathroom and drown it in the bathtub." Countless candidates and elected
officials slam "Washington bureaucrats" even though these "bureaucrats" were
none other than themselves. It's not a great way to build respect. Then the
attack escalated, with the aim of destroying parts of government that were actually
mostly working. This was done to advance the narrative that government itself
is the problem, and pave the way for privatization. Take the Transportation
Security Administration for example. TSA has actually done its job. No terrorist
attacks have succeeded on U.S. airplanes since it was established. But by
systematically underfunding it , Congress has made the lines painfully long,
so people hate it. Take the Post Office. Here Congress manufactured a crisis
to force service cuts, making the public believe the institution is incompetent.
But the so-called "problem" is
due almost entirely to a requirement, imposed by Congress, forcing the Postal
Service to prepay retiree's health care to an absurd level, far beyond what
a similar private sector business would have to do. A similar dynamic now threatens
Social Security. Thirty-five years have passed since Reagan first mocked the
potential for competent and effective government. Years of unrelenting attack
have sunk in. Many Americans now distrust government leaders and think it's
pointless to demand or expect wisdom and statesmanship. Today's American voters
(and their British counterparts), well-schooled in skepticism, disdain and dismiss
leaders of all parties and they are ready to burn things down out of sheer frustration.
The moment of blowback has arrived.
PK has nearly lost all of his ability to see things objectively. Ambition got him, I suppose,
or maybe he has always longed to be popular. He was probably teased and ridiculed too much in
his youth. He is something of a whinny sniveler after-all.
Then too, I doubt if PK has ever used a public restroom in the Southwest, or taken his kids
to a public park in one of the thousands of small towns where non-English speaking throngs take
over all of the facilities and parking.Or had his children bullied at school by a gang of dark-skinned
kids whose parents believe that whites took their land, or abused or enslaved their distant ansestors.
It might be germane here too... to point out that some of this anti-white sentiment gets support
and validation from the very rhetoric that Democrats have made integral to their campaigns.
As for not knowing why crime rates have been falling, the incarceration rates rose in step,
so duh, if you lock up those with propensities for crime, well, how could crime rates not fall?
And while I'm on the subject of crime, the statistical analysis that is commonly used focuses
too much on violent crime and convictions. Thus, crimes of a less serious nature, that being the
type of crimes committed by poor folks, is routinely ignored. Then too, those who are here illegally
are often transient and using assumed names, and so they are, presumably, more difficult to catch.
So, statistics are all too often not as telling as claimed.
And, though I'm not a Trump supporter, I fully understand his appeal. As would PK if he were
more travelled and in touch with those who have seen their schools, parks, towns, and everything
else turn tawdry and dysfunctional. But of course the nation that most of us live in is much different
than the one that PK knows.
> And, though I'm not a Trump supporter, I fully understand his appeal
I wonder why everybody is thinking about this problem only in terms of identity politics.
This is a wrong, self-defeating framework to approach the problem. which is pushed by neoliberal
MSM and which we should resist in this forum as this translates the problems that the nation faces
into term of pure war-style propaganda ("us vs. them" mentality). To which many posters here already
succumbed
IMHO the November elections will be more of the referendum on neoliberal globalization (with
two key issues on the ballot -- jobs and immigration) than anything else.
If so, then the key question is whether the anger of population at neoliberal elite that stole
their jobs and well-being reached the boiling point or not. The level of this anger might decide
the result of elections, not all those petty slurs that neoliberal MSM so diligently use as a
smoke screen.
All those valiant efforts in outsourcing and replacing permanent jobs with temporary to increase
profit margin at the end have the propensity to produce some externalities. And not only in the
form "over 50 and unemployed" but also by a much more dangerous "globalization of indifference"
to human beings in general.
JK Galbraith once gave the following definition of neoliberal economics: "trickle down economics
is the idea that if you feed the horse enough oats eventually some will pass through to the road
for the sparrows." This is what neoliberalism is about. Lower 80% even in so-called rich countries
are forced to live in "fear and desperation", forced to work "with precious little dignity".
Human beings are now considered consumer goods in "job market" to be used and then discarded.
As a consequence, a lot of people find themselves excluded and marginalized: "without work, without
possibilities, without any means of escape" (pope Francis).
And that inevitably produces a reaction. Which in extreme forms we saw during French and Bolsheviks
revolutions. And in less extremist forms (not involving lampposts as the placeholders for the
"Masters of the Universe" (aka financial oligarchy) and the most obnoxious part of the "creative
class" aka intelligentsia
https://en.wikipedia.org/wiki/Intelligentsia
) in Brexit vote.
Hillary and Trump are just symbols here. The issue matters, not personalities.
...Neoliberalism is not a post-war version of capitalism. It's a post-war version of fascism.
Notable quotes:
"... drove CEO pay in large corporations up from 29 times that of the average worker in 1978 to 352 times as great in 2007. ..."
"... The unwillingness of our intellectual class generally, and academic economists in particular, to even describe, let alone confront, the totalitarian trajectory of public policy will be one of the most notable aspects historians describe when talking about our era. ..."
"... the most (in)famous members of the intellectual class and that particularly includes academic economists are really nothing more than employees of the creditor class paid to administer intellectual anesthetic to debt peasants who still have enough time to ask what's going wrong while they try to hold the Wolves of Wall Street at bay. ..."
"... The Neoliberal project has sought quite successfully to delegitimize republican federalist state power and legitimize corporate and wealth power in its place. ..."
"... Neoliberalism is not a post-war version of capitalism. It's a post-war version of fascism. ..."
"... What has been delegitimized are other groups or ideas to which state power has been subordinated in other times. ..."
"... This describes contemporary political economy in that the state's economic role tends to be largely confined to protection of private property and enforcement of contracts. Find a single bit of financial chicanery that isn't wrapped up in a shit contract or geared to protect the deeper pocketed side of a dispute, and I'll find a million that are. Hello protection of private property and enforcement of contracts. Enter Neoliberal State. ..."
"... Like the series chronicling the "Journey into a Libertarian Future," ..."
The most talked about economic development in the neoliberal era is rapidly rising inequality.
While Thomas Piketty's now-famous book, Capital in the 21st Century, documented the relentless rise
of the income share of the top 1%, he did not provide a convincing explanation of that development.
The neoliberal form of capitalism supplies a clear explanation. As neoliberal restructuring undermined
labor's bargaining power, the real wage stagnated while profits rose rapidly. Figure 1 shows the
big gap after 1979 between the growth rate of profit and of wages and salaries (which include managerial
salaries). That gap jumped sharply upward after 2000. Another feature of neoliberal capitalism, the
development of a market in corporate CEOs, drove CEO pay in large corporations up from 29 times
that of the average worker in 1978 to 352 times as great in 2007.
My new book The Rise and Fall of Neoliberal Capitalism explains in detail how the institutions
of neoliberal capitalism account for two other important economic developments since 1980. One was
the transformation of the financial sector from a stodgy provider of traditional loans to businesses
and households and the sale of conventional insurance into speculatively oriented companies that
developed a series of highly risky so-called "financial innovations" such as sub-prime mortgage backed
securities and credit default swaps. The most important cause of this change in the financial sector
was its deregulation, a key part of neoliberal restructuring, starting with the first bank deregulation
acts of 1980 and 1982 and culminating in the last such act in 2000. A contributing factor was the
intensifying competition of neoliberal capitalism, which drove financial institutions to more aggressively
seek the maximum possible profit, which for financial institutions always involves moving into speculative
and risky activities.
Second, a series of large asset bubbles emerged, one in each decade. The 1980s saw a bubble in
Southwestern commercial real estate, whose collapse sank a large part of the savings and loan industry.
In the second half of the 1990s a giant stock market bubble arose. And in the 2000s a still larger
bubble engulfed US real estate. The preceding period of regulated capitalism had no large asset bubbles.
The rapidly rising flow of income into corporate profit and rich households exceeded the available
productive investment opportunities, and some of that flow found its way into investment in assets,
tending to start the asset price rising. The eagerness of the deregulated financial institutions
to lend for speculative purposes enables incipient asset bubbles to grow larger and larger.
Neoliberalism and the Crisis of 2008
The three developments noted above growing inequality, a speculative financial sector, and a
series of large asset bubbles account for the long, if not very vigorous, economic expansions in
the US economy during 1982-90, 1991-2000, and 2001-07. The rising profits spurred economic expansion
while the risk-seeking financial institutions found ways to lend money to hard-pressed families whose
wages were stagnating or falling. The resulting debt-fueled consumer spending made long expansions
possible despite declining wages and slow growth of government spending. The big asset bubbles provided
the collateral enabling families to borrow to pay their bills.
However, this process brought trends that were unsustainable in the long-run. The debt of households
doubled relative to household income from 1980 to 2007. Financial institutions, finding limitless
profit opportunities in the wild financial markets of the period, borrowed heavily to pursue those
opportunities. As a result, financial sector debt increased from 21% of GDP in 1980 to 117% of GDP
in 2007. At the same time, financial institutions' holdings of the new high-risk securities grew
rapidly. In addition, excess productive capacity in the industrial sector gradually crept upward
over the period from 1979 to 2007, as consumer demand increasingly lagged behind the full-capacity
output level. All of these trends are documented in The Rise and Fall of Neoliberal Capitalism.
The above trends were sustainable only as long as a big asset bubble continued to inflate. However,
every asset bubble eventually must burst. When the biggest one the real estate bubble started
to deflate in 2007, the crash followed. As households lost the ability to borrow against their no
longer inflating home values, consumer spending dropped at the beginning 2008, driving the economy
into recession. Falling consumer demand meant more excess productive capacity, leading business to
reduce its investment in plant and equipment. The deflating housing bubble also worsened investor
expectations, further depressing investment. Finally, in the fall of 2008 the plummeting market value
of the new financial securities, which had been dependent on real estate prices, suddenly drove the
highly leveraged major commercial banks and investment banks into insolvency, bringing a financial
meltdown.
Thus, the big financial and broader economic crisis that began in 2008 can be explained based
on the way neoliberal capitalism has worked. The very same mechanisms produced by neoliberal capitalism
that brought 25 years of long expansions were bound to eventually give rise to a big bang crisis.
Triple Crisis welcomes your comments. Please share your thoughts below.
David Kotz is a professor of economics at the University of Massachusetts-Amherst and the
author of The Rise and Fall of Neoliberal Capitalism (Harvard University Press, 2015). This is the
first installment of a two-part series based on his book.
I highly recommend Kotz' "Russia's Path from Gorbachev to Putin." He shows how the collapse
of the Soviet economy resulted from the failure by Soviet elites to mobilize its considerable
industrial strengths within a "developmental state" model and instead to engage in looting, primarily
natural resource-based. (Yes, the familiar short-term vs. long-term mindsets.) Contrary to MSM
spew, the Soviet economy was still growing, albeit slowly, up to the point when central planning
institutions were dissolved in the late 80s. A political agenda geared to a "Never Again" destruction
of central planning capacities, a too rapid opening up of the Soviet economy to competition with
Western multinationals and simple venality has set up an lop-sided natural resource dependent
economy. His analysis is based on a collection of interviews with elite figures.
By what criteria does this describe our contemporary system of political economy? Neoliberalism
is the antithesis of capitalism. It does not believe in markets and rule of law and a limited
role for bureaucracy. It believes in limited markets and a predominant role for the bureaucracy
and a two-tiered justice system. I challenge the author to name an area of the American economy
where non-market institutions play a limited role.
The unwillingness of our intellectual class generally, and academic economists in particular,
to even describe, let alone confront, the totalitarian trajectory of public policy will be one
of the most notable aspects historians describe when talking about our era.
The "market" certainly no longer refers to competition as a dynamic in the production and distribution
goods and services. Instead, it means something more along the lines of international financial
monopolies protected by collusion between corporate captured local states, (including saturation
of executive, legislative, judicial, penal and enforcement branches of government), educational
institutions and media. I wonder if "trade deals" doesn't better describe the phenomenon that
has replaced "markets."
The unwillingness of our intellectual class generally, and academic economists in particular,
to even describe, let alone confront, the totalitarian trajectory of public policy will be
one of the most notable aspects historians describe when talking about our era.
Take a look at Michael Hudson's new book, "Killing the Host". This "unwillingness" becomes
understandable once you realize the most (in)famous members of the intellectual class and
that particularly includes academic economists are really nothing more than employees of the
creditor class paid to administer intellectual anesthetic to debt peasants who still have enough
time to ask what's going wrong while they try to hold the Wolves of Wall Street at bay.
The behavior of the intellectual class down through the ages is what with notable exceptions
like Hudson, Veblen or Marx gives intellectuals a bad reputation among the laboring cattle.
Their message is always the same "Whatever is is right."
It's the difference between "we should use markets to efficiently allocate resources" and "Capitalists
should rule".
A nation's political system can be described by what types of power it legitimizes and delegitimizes,
and whose power it protects. No matter what we tell ourselves about our supposed political system
("constitutional federalism", "republican democracy") and economic system (Free Market Capitalism),
you can tell what we really have by looking at whose power the state protects. The Neoliberal
project has sought quite successfully to delegitimize republican federalist state power and legitimize
corporate and wealth power in its place.
If we really were in a capitalist system, the state would still actively intervene to make
sure that markets actually allocate resources efficiently. That is to say, the state would break
up monopolies and discourage rent extraction. If we really were in a representative democracy,
our elected officials' actions would hew more closely to the priorities that polls show the voters
to have.
delegitimize republican federalist state power and legitimize corporate and wealth power
in its place
I could see you going in a number of different directions, so I'm not sure whether I agree
or disagree.
From what I see, neoliberals love state power. They almost can't help themselves from
using government to interfere with citizens' lives. It is not a competition of wealth over the
state. It is a merger of state bureaucracy and private bureaucracy, a public-private partnership.
Neoliberalism is not a post-war version of capitalism. It's a post-war version of fascism.
Neoliberalism is not a post-war version of capitalism. It's a post-war version of fascism.
I think you really hit the nail on the head here. It's an important understanding to come to
before one can understand how the violence and criminality of it all play a part rather than are
some aberration.
Neoliberals do love state power, and have subordinated it to their purposes. What has been
delegitimized are other groups or ideas to which state power has been subordinated in other times.
Power does not reside in the hands of the people (thru the theoretical ability to drive out politicians
who fail to adequately safeguard our welfare). Regulatory agencies have power, but not to benefit
the interests of the people over the interests of the corporations they are supposed to regulate.
The state does not act to ensure the efficient allocation of resources, but it does act to protect
the interests of the Boardroom Class. It no longer acts to preserve checks and balances. Much
of this came through promoting the notion that the government is an illegitimate market actor
which is to blame for distorting markets (and that not distorting markets is more important than
mere values, ideals, or institutions).
The general term for the type of totalitarianism you are describing is fascism.
Until that last sentence, which does not follow from the rest. In what area of the economy
have neoliberals pushed to render government an illegitimate market actor?
It may be a leap for me to say the inroads neoliberals have made in securing state power is
built upon the premise (or propaganda) that the government is an illegitimate market actor. But
I feel the propaganda has been there for all to see for some time.
Since I was in college in the 80s, I've been bombarded with messages that when the government
seeks to help its citizens, it leads to worse results, because it distorts markets. (e.g. Reagan:
"The nine most terrifying words in the English language are: I'm from the Government, and I'm
here to help. "). The welfare state? Regulation? Environmental protection? Affirmative action?
I've heard or read every one of these blamed for causing or making worse the problems they are
intended to ameliorate; all because they interfere with the supposed effectiveness of untrammeled
free markets.
The net effect of all the changes to our nation while this rhetoric has been ascendant has
not been increased market efficiency, nor has it been smaller government. Instead, we have moved
to a system where protecting and promoting the interests of the Boardroom Class are the paramount
objectives of the state.
"Free markets" turns out to mean letting rich people do what they want, not promoting efficient
allocation of resources through competition and the price mechanism.
"Small government" turns out to means not allowing the government to help anyone the Boardroom
Class doesn't want helped.
"Free trade" turns out to mean subordinating government power to corporate power.
"Lower taxes" turns out to mean shifting the tax burden from corporations and the Boardroom
Class to the people the government is no longer allowed to help.
"Deregulation" means externalities are the law of the land, rather than a defect of capitalism
that could be ameliorated.
I don't disagree with the 'fascism' label. I just wanted to read out some of the ingredients.
"If we really were in a capitalist system, the state would still actively intervene " to deter
and punish financial fraud, not aid and abet it in the way that the legal and regulatory systems
do now. Campaign contributions from the biggest fraudsters, and cost-of-business fines and settlements,
have made the regulatory state the bought-off accessory after the fact and unindicted coconspirator
enabler of fraudulent financial schemes.
This describes contemporary political economy in that the state's economic role tends to
be largely confined to protection of private property and enforcement of contracts. Find a single
bit of financial chicanery that isn't wrapped up in a shit contract or geared to protect the deeper
pocketed side of a dispute, and I'll find a million that are. Hello protection of private property
and enforcement of contracts. Enter Neoliberal State.
It's all well and good to call bullshit on the bail-outs, robo-signings, illegitimate foreclosures,
HAMP runway foam, revolving doors and so on, but it's naive to suggest these practices are somehow
not really capitalist - that true Capitalism somehow doesn't do bureaucracy and that markets will
work fine if we can get the government off honest folks backs and on to policing fraud.
Today's markets aren't limited by the state so much as they are limited by monopoly power.
The state has recused itself from most everything outside of protecting those monopolies, which
makes it easy to see state intervention as bad in itself. So lift that protection - let the banks
fail; stop floating douche-bags like Elon Musk; stop foreclosures that lack a paper trail. Somehow
have a state that mostly just protects property and enforces contracts without corruption. Then
watch the rich get rich, the poor get poor, and the middle class disappear.
It takes money to make money. You can make money in a downturn. Buy low, sell high. Cash is
King. Free markets create, sustain, and grow inequality. Theory predicts it, and practice bears
it out.
it's naive to suggest these practices are somehow not really capitalist
What you're describing isn't what people who support market-based economics advocate. If we're
going to redefine capitalism so extremely, that's a perfectly fine semantics debate to have, but
then what's the point of talking about capitalism?
the state's economic role tends to be largely confined to protection of private property
and enforcement of contracts
But that's not at all descriptive of the state's role. First, the state does not protect private
property and enforcement of contracts. Rule of law has been almost completely replaced by rulers
of law. Some are more equal than others. We've been talking about a two-tiered justice system
for so long it is almost cliched at this point. Second, the state claims enormous powers beyond
the legal system. The role of government is so enormous that I am not sure you are thinking this
through. We have the largest prison system on the planet. We have the most aggressive national
security state on the planet. We have the most expensive healthcare system on the planet. We require
documents to go to work or cross the Canadian border or buy medicine. There are banking supports
and agribusiness and intellectual property and carried interest tax breaks and home mortgage interest
tax breaks and charitable contribution tax breaks and real estate development tax breaks and on
and on and on
Neoliberalism is not the antithesis of capitalism. It is yet another institutional setup that
has developed because relatively competitive capitalism is unworkable when it comes to large scale
industry. You're holding out for a form of market-based capitalism that has been completely superseded,
and not just by state-based mechanisms. There's a substantial literature including work by Nomi
Prins, who's got a post here today, and Michael Perelman, also occasionally appearing here on
how competition in late 19th century capitalism was regarded as too destructive by capitalists
themselves, leading to industry consolidations that were eventually bank-driven. Massive investment
commitments will not be undertaken if there's a chance they'll fail, and the logic of oligopoly
is not only straightforward but rational to some degree.
And, while we're at it, why not at least briefly consider the fate of communities of workers
who are supposed to cheerily migrate thither and yon to satisfy market-based criteria of efficiency
that equally cheerily ignore their externalized misery? Enter Polanyi and Marx.
I should add that Kotz also talks about the supersession of competitive capitalism in chapter
6 of the book Dayen extracted. Also recommended, a very succinct, useful history.
Did we read the same post? The author is talking about post-war developments, especially the
Reagan-Obama era. Government has become much more pervasive in all aspects of the economy, not
much less.
Today is 9/11. Are you aware that to this day we are still in a declared, official state of
emergency?
"the state's economic role tends to be largely confined to protection of private property and
enforcement of contracts"
if you interpret this broadly enough I suppose anything qualifies. But what we actually have
going on is not just something quaint like the "protection of private property", but of course
the massive expansion of private property (maybe it was ever thus, cue enclosure discussion).
But when they are attempting to patent things that have never been patented like medical procedures
as in the TPP, why use such unobjectionable (except to a serious socialist and even they don't
have much problem with personal property) terminology like "protection of private property" to
describe what is happening? I mean I could see people who support such things using such language
but that is all.
Ok only the essay wasn't about what is and is not "true capitalism" (which I'm not sure is
a productive line of thought, but who knows). The essay was making statements that it is very
hard to say are true in any sense like:
"Under neoliberalism, non-market institutions such as the state, trade unions, and corporate
bureaucracies play a limited role."
Would Katz support a radical decentralization and democratization of the modern state as well
a massive redistribution of property to private citizens giving everyone a chance to own the means
of production?
Or is he going to continue with the traditional lament of bankrupt socialist thinking that
since we are apparently unable politically to socialize the means of production we will continue
to wax nostalgic about the New Deal and be content with our serfdomwith Big Capital and Big State
running the show?
Do you think we will have massive redistribution of property short of revolution? Do you think
we need one? Sometimes a BIG does get it's foot in the door which would somewhat redistribute
money and power.
DOn't have time now, but the author mis-defines "neo-liberalism", making it out to be classical
liberalism, from which it is actually a stark depaarture. Neo-liberalism isn't about the state
withdrawing from market regulation and leaving it up to "market forces", but rather about using
the state to enforce and expand the dictates of Mr. Market, to the exclusion of any other function.
This can be seen in neo-liberalism's ignoring issues of monopoly and anti-trust, in contrast to
classical liberalism's concern with maintaining competition and suspicion of concentrated economic
power..
Things are not this complicated For example, the 2008 crisis did not happen in India because
the bank head (Rajan?) enforced a mandatory 20% cash down payment (among other things). No real
estate bubble in India.
Second, all of this starts with the ability of the banks and the state to create endless money,
so companies can make crazy investments. Solution is easy, make it expensive to make new money.
People should have a stake in the game involving real money when buying property (20% down).
The problem is wages may have stagnated so much compared to costs that it's hardly even possible
on the wages the vast majority are earning.
"Buying property" = Suburbia, "gentrification," "development?" These are all behaviors to be
credited and encouraged by "policy?" All involving assumption of large debt over long years, and
all kinds of externalities and consumptions? And "we" are to protect and foster such behaviors
as parts of the Rights of Man?
Always seemed strange to me that "growth in housing starts" is so happily cheered as a sign
of a Healthy Economy
"The most important cause of this change in the financial sector was its deregulation, a
key part of neoliberal restructuring, . A contributing factor was the intensifying competition
of neoliberal capitalism ."
Deregulation in a competitive endeavor. Yes. No one thinks taking the referees and umpires
off the playing field will result in teams self-regulating during play. Why do so many people
buy the nonsense that deregulating the financial competition field will be any different?
I think that if we consider the actual nature of capital, versus our perception of it and how
this relationship necessarily evolved over time, it would go a long way toward explaining the
economic dynamic of the last half century.
The reality is that capital functions as a glorified voucher system and as such, is a social
contract, but we think of and treat it as a commodity.
The divergence is that nothing is more detrimental to a voucher system than large numbers of
excess vouchers, but because we individually experience it as store of value, we think of it as
a form of commodity to be collected and saved.
Now there were sufficient means to maintain a fairly healthy circulation of capital, from savings
to productive investment, up to the 70's, but then this dynamic started to loosen and the excess
capital started seeping into the general economy and it caused inflation.
Presumably Volcker cured this by raising interest rates and thus reducing the flow of extra
capital into the economy, but that also further slowed the natural growth and so there was still
excess.
It wasn't until '82 that this process seemed to start working, but by that time Reaganomics
had ballooned the deficit to 200 billion and that was real money in those days. The concern voiced
publicly by economists at the time was this would crowd out private sector borrowing and further
slow the economy. Yet the reality was only Fed determined interest rates set the availability
of capital and the government was borrowing at high rates. So this served various purposes; For
one thing, it served to soak up excess capital. It created significant returns for investors and
the money was then spent on "Keynsian pump priming," which helped to get the economy going again.
The lesson apparently learned from this was not to let excess capital back into the larger
economy. For one, this required breaking up the labor movement and finding ways to store the surplus
within the investment community. Thus the explosion of the power and influence of the financial
community, as they were tasked with holding onto an ever growing percentage of the notational
wealth of the economy. Along with driving up asset prices and therefore the power of those holding
them. The momentum of this naturally knew no bounds and consequently the powers that be have run
amuck.
The lesson to learn from this is that wealth has to be stored in something other than notational
instruments and excess capital should be taxed back out of the economy, not borrowed back out.
This would definitely encourage people to develop all number of mediums of exchange and not rely
on banks to store their wealth.
For most people money is saved for very predictable reasons. Raising children, healthcare,
housing, retirement, vacations, entertainment, would be some of the most prominent reasons. So
rather than storing money in the banking system, communities could build up the infrastructure
to support these needs and consequently redevelop a public space. Which would amount to storing
wealth in a stronger community and a healthier environment.
So when this bubble does pop, it might prove to have set the stage for an advance in human
culture anyway.
"... The ideology, the fantasy of the market has penetrated so deeply into the culture that most people can imagine nothing else. ..."
"... The best insight of the change that started in 1980 that I've found is Emmanuel Todd's. "The United States itself, which was once a protector and is now a predator." Neo-liberalism is confusing. Predatory Capitalism is reality. ..."
By David Kotz, a professor of economics at the University of Massachusetts-Amherst and
the author of The Rise and Fall of Neoliberal Capitalism (Harvard University Press, 2015). This is
the second installment of a two-part series based on his book; see the first post
here. Originally published at
Triple
Crisis.
While it is widely agreed that capitalist economies underwent significant change after around
1980, there are different interpretations of the new form of capitalism that emerged. There is no
agreement about the best organizing concept for post-1980 capitalism. Some view it as financialized
capitalism, some as globalized capitalism, and some as neoliberal capitalism. These different conceptions
of contemporary capitalism have implications for our understanding of the problems it has produced,
including the financial and economic crisis that emerged from it in 2008. Focusing on the U.S. economy,
I presented a case in
part
1 that "neoliberal capitalism" is the best overall concept for understanding the form of capitalism
that arose around 1980. Here, I deal more specifically with the shortcomings of alternative interpretations
focused on the concepts of "financialization" and "globalization," respectively.
Why Not "Financialization"?
Some economists view "financialization" as the best overall concept for understanding contemporary
capitalism. Financialization can best be understood, however, as an outgrowth of neoliberal capitalism.
The rise in financial profit, which gave the financial sector a place of growing importance in the
economy, came quite late in the neoliberal era. As figure 2 shows, only after 1989 did financial
profit begin a long and steep climb, interrupted by a fall in the mid 1990s, and then a sharp rise
to a remarkable 40% of total profit in the early 2000s. It was only in the 2000s that financialization
fully blossomed. At that time, commentators noted, Wall Street was beginning to draw a large percentage
of elite college graduates.
The "financialization" of the U.S. economy in recent decades, important though it is, was itself
driven by neoliberal restructuring. The neoliberal institutional structure, including financial deregulation,
enabled financial institutions to appropriate a growing share of profits. Furthermore, financialization
cannot account for many of the most important economic developments in contemporary capitalism. It
cannot explain the dramatic shift in capital-labor relations from acceptance of compromise by the
capitalists to a striving by capitalists to fully dominate labor.. It cannot explain the sharp rise
in inequality. And it cannot explain the deepening globalization of capitalism.
Why Not "Globalization"?
Like financialization, "globalization" has been presented by some analysts as the best framework
for understanding the contemporary form of capitalism. Capitalism has, indeed, become significantly
more integrated on a world scale in recent decades, including the emergence of global value chains
and a truly global production process in some sectors.
The degree of globalization of capitalism has gone through ups and downs in history. Capitalism
became increasingly globalized in the decades prior to World War I. Then the cataclysm of two world
wars and the Great Depression reversed the trend, and capitalism became less globally integrated
over that period. After World War II, the process of globalization resumed, gradually at first. Around
the late 1960s, globalization accelerated somewhat measured by world exports relative to world GDP,
as figure 3 shows. After 1986 the trend became more sharply upward. Thus, in contrast to financialization,
which emerged later than neoliberalism, the globalization process in this era began before neoliberalism
emerged, although globalization accelerated in the neoliberal era, particularly after 1990.
However, many of the most important features of capitalism since 1980 cannot be understood or
explained based on globalization any more than they can be on the basis of financialization. Globalization
cannot fully explain the rapidly rising inequality in the contemporary era, which has been quite
extreme in the United States yet milder even in some other countries, such as Germany, that are more
integrated into the global economy. Globalization cannot explain the financialization process and
the rise of a speculatively-oriented financial sector, nor can it explain the series of large asset
bubbles. Like financialization, globalization has been an important feature of neoliberal capitalism,
but it is not its defining feature.
Neoliberalism as the Key Concept
Both financialization and globalization are fundamental tendencies in capitalism. Financial institutions
have an ever-present tendency to move into speculative and risky activities to gain the high profits
of such pursuits. Even more so, globalization is a tendency present from the rise of capitalism,
since the capital accumulation drive always spurs expansion across national boundaries. Then why
do these phenomena characterize one era of capitalism more than another?
Both of these tendencies can be obstructed for long periods of time, or released, depending on
the prevailing institutional form of capitalism. Financialization was held in check from the mid
1930s to 1980 by financial regulation, and globalization was hindered from World War I until the
1960s by the world wars, the Great Depression, and then the state regulation of trade and international
investment allowed under the post-World War II Bretton Woods monetary system. The neoliberal restructuring
starting in the late 1970s can explain all of the key economic developments in contemporary capitalism,
with the processes of financialization and globalization-released by neoliberal capitalism-forming
a part of the account.
These differences in analysis are important, since they represent different views of the basic
characteristics of the current era of capitalism and different diagnoses of the origins of the current
crisis. Proposals to overcome the current crisis that focus only on reigning in financialization
or reconfiguring globalization would be insufficient unless part of a restructuring that replaces
neoliberalism with something new. craazyboy
September 17, 2015 at 10:28 am
I guess for people that don't have a concise idea of what "neoliberalism" is yet, I'll offer
the following formula:
Neoliberalism = Financialization + Globalization
Additionally, Neoliberals need Neocons to keep them safe in foreign lands.
must be why neoliberals focus on trade balances: capitalism = competition = consolidation =
monopoly = trade advantages = inequality or stg like that and financialism is just hastily put
together to grease the skids
I think that even more fundamental is "marketization" as discussed by Polyani. The idea that
all of human activity (and indeed nature) can be captured and cast in some sort of market paradigm.
Underlying all these discussions is the assumption that our current market system is ok. I
don't think it is, since markets are driving society not the other way around.
We even see the curious inversion of trying to apply something called competitive free markets
(whatever that may be) to nature and evolution. Then in a fabulous logical salto mortale, in a
circular argument based on our own projections we impute that since nature runs like a market
so does society,
The analysis needs to be much deeper, at least at the level of primary social organization,
its purpose and historical social anthropology. Elinor Ostrom and her analysis of organizations
and the commons is a good start.
I appreciate this post, Yves. To name something is to control it, to own it in some sense,
it is the Rumplestiltskin, If we don't have appropriate names, then we can't think of things as
they are.
Thure, I agree with you. The ideology, the fantasy of the market has penetrated so deeply
into the culture that most people can imagine nothing else.
I'm not sure how to phrase this elegantly, it's only when we can see clearly the ideology we're
embedded in that we'll be able to see how artificial it all is, and how easily we could end it
and build something better. We have to avoid the sort of false change with radical features of
contemporary Burschenschaften types.
I think of it as death cult capitalism. For it's dependence on war making, it's consumer insatiability
in a finite world, and its cannibalization of Institutions, public and private.
Very well put! The peace and prosperity model that many of us grew up believing that some
capitalists actually believed in has been entirely supplanted by disaster capitalism and the
shock doctrine. :(
re "death cult capitalism," the observation attributed to Fredric Jameson that it has become
easier to imagine an apocalypse than to imagine an end to capitalism seems very true. It becomes
even more sadly ironic, or maybe just terribly sad, if you consider the likelihood that for a
significant proportion of the population the fascination with end times in a distorted way represents
their hostility to this social order. Consider how willing Hollywood is to serve up techno-buffed
apocalypse instead of films depicting anything other than blatantly criminal antagonism to society.
But then you've got the Superheroes, acting on our behalf and making us feel all the more enfeebled
in the process.
More evidence that even many simpatico economists don't understand the construction and use
of ideal types. Also, he is scrambling his US and global perspectives. And reification of markets,
which are specific human-made institutions that don't all act the same.
There is a much more straightforward institutional analysis of US and global economic changes
over the last 40 years that doesn't require such squishy "global" concepts: Fear of a loss of
competitiveness among US business (which through the 1970s was not all that global) leaders and
politicians, and a desire to crush US labor (which despite all the post-WW2 "social contract"
mumbo-jumbo has never been far below the surface) drove a restructuring of the US economy beginning
in the mid-1970s in the interests and direction of the relative (to their competitors) strengths
of US firms financial engineering, ease of corporate restructuring, etc. The same was true in
the UK, where the real economy was even more unbalanced than in the US.
It's OK to call this neoliberalism I guess, but the notion that neoliberalism is some kind
of unshackling of "the market" is dubious. Certain markets were unshackled, others weren't, and
some (drugs, patents, copyrights, etc.) become much more "shackled," all spelled out in various
laws and regulations blessed by the US (and UK) corporate and political class (and their economist
agents). During the 1970s-1990s at least, business leaders and politicians in other countries
(Germany, Japan, Korea, China to name the most obvious) pursued other strategies that differed
substantially from what American and British elites were up to. But it turned out that there was
a lot of easy money to be made through financial engineering (compared to the harder task of delivering
useful products and services at good value), and so elites all over the globe were drawn toward
what originally was a parochial American and British strategy. Also, having a large "advanced"
countries like the US and UK pursuing "labor immiseration" made it both easier and more necessary
for other "advanced" countries to reign in labor as well.
Patents and copyrights are state granted monopoly privileges absent the usual ( think Com Ed's
need to seek approval for rate hikes ) monopoly regulation.
The ( justly ) notorious Congressionally bestowed prohibition against Medicare's ability to bargain
for decreased drug costs is a perfect example of "reverse regulation".
What about just plain old capitalism? Capitalism seeks to accumulate profit, period. If it
can do this through accumulating financial income, by expanding globally, or crushing labor it
will do it. This is what I found refreshing about Piketty's book (and Arrighi's The Long Twentieth
Century too): he demonstrated that the 1930s-early 1970s was a historical anomaly.
These discussions can be useful, but only to a point. From someone working in academia, I see
word choices like these conforming not so much to what is the best overall term, but from what
you're focusing on. Some of us focus more on processes that are closer to "financialization,"
"globalization" etc. As someone else has said above, these are just good ideal types.
Hans and Franz wan to Pump You Up! so you're not a Girly Man economy. To get pumped up you
have to lose weight and sweat.
Neoperspiratory Capitalism for all you academics. You probably wouldn't want to get near sweat
if you can help it. hahahahahah. Layin around all day doing nothing. LOL
Possibly helpful here might be the late ecologist Garrett Hardin's concept of the Problem Of
The Commons- i.e. the degrading of a common resource by unregulated extractors. While it is in
the interest of the individual extractor that the common resource not be depleted, it is very
much in his interest to maximize his individual extraction. The collapse of ocean food fish populations
provide a good example.
Think of the U.S. economy as being like the Grand Banks of Newfoundland, rich source of fish (
profits to be made selling to an affluent consumer population ) , U.S. firms as being individually
owned fishing craft, and Globalization ( producing in very low wage, low safety, low environmental
protection areas while selling in the affluent USA ) and Financialization as rendering the "fishing
craft" much more efficient.
While the the individual fishing boat captains do not intend the destruction of the common resource,
they dare not slacken their extractive efforts. Depletion ( Deindustrialization, the collapse
of the Middle Class ) inevitably ensue.
Pace Adam Smith no Invisible Hand will save the Commons.
It is Deregulation, a key element of Neolibralism that is ultimately lethal- the Commons must
become everybody's property rather than no one's.
The Commons is an aspect that is being steadily wiped out by "enclosure" (restricting access
to what used to be shared resources).
David E. Martin has an interesting take on this as it relates to human creativitysomething
that conventional capitalism encourages us to "enclose" for profit, with little understanding
of how this undervalues human creativity. There's a very good recent paper that mentions this
on the M-CAM website, called "Putting
It All Together".
Globalization is just the euphemism for Colonialism.
Low rate pseudo inflation regulation of Central Banks destroys interest rate relation to risk
so no lending that is meaningful in regime since Reagan.
Monopolies rule so no competition.
First World uses other world's slave labor and countries to avoid home base environmental regulations.
So what are you talking about calling any of this capitalism. Ridiculous and ignorant. A tool
of this evil
trade.
Great post. I have been baffled by the use of the term "neoliberalization."
What about the "neocon"? Is the neocon the neoliberal who takes advantage of the negative externalities
of perpetual war? (Are there Venn diagrams that can explain these neoeconomic terms?) Indeed,
how much of our economy is driven by negative externalities? Crises begets predatory behavior,
clothed by doublespeak like "opportunity" or "creative destruction."
Yet there's nothing stopping negative externalities because they are included in GDP metricsthe
measure of economic "wellness." After 9/11, Bush reminded that we must shop. Americans are valued
as consumers.
I hate how a patient has become a "consumer" of health care. In health care, "wellness" is
just another product to consume. With neoliberalism at the heart of American economics, I can't
imagine there will ever be any real attempt rein in health care costs. We depend on sickness (real
and imagined) to keep our economy humming. "Prevention" is the tail that wags the dog as doctors
chase more and more false positives and respond to lower thresholds for "abnormalities".
The globalization piece is the narrative of "free" trade. Import cheap goods that outsource
more jobs and keep prices down to artificially lower the cost of living. The plutocrats' narrative
is that when corporations move into poor countries with jobs this levels the playing field globally.
(Never mind their tendency to uproot when those pesky citizens demand better pay and work conditions!)
This, of course, takes a huge toll on the environment when we ship goods that could easily be
manufactured here.
It means we extract more resources to create more landfills. And "waterfills" and "airfills".
We use technology to engineer our way out of our big messes. More chemicals are dumped into our
land, water and airwith trade secrets obfuscating what these chemicals are and whether they are
harmful. Fracking, glyphosate for GMOs, etc.
Can neoliberalization die of natural causes?
Maybe we can we bring it to Oregon for death with indignity? (No capital punishment in Texas
for neoliberalization pun intended.)
You see, I'm getting really worried that we've passed the tipping point when economics collision
with natural ecosystems is irreversible And that makes this mama bear really mad!
That is the only thing that is going to kill this cancer. Extraction and exploitation, extend
and pretend (ecologically) will continue until it simply cannot. THAT will lead to a massive and
near-sudden collapse of the diseased, shambling zombie that is the modern neoliberal system, and
with it the entire setup that depends on it (and a LOT of humans). No, not enough will be done
to reign in climate change, no, there will be no techno fix (though some will be tried in ultimate
desperation to keep the band playing).
Welcome the coming collapse. The fisheries will return on their own after most humans are gone
and no longer sucking them dry. The forests will return after most humans are gone and no longer
mowing them down. As the late, great George Carlin prophetically and accurately stated, "The earth
isn't going anywhere. We are."
From where I sit, one of the most important developments of the last 35 years has been the
failure to prevent the increasing power of monopolies and cartels. The increasing share of income
taken in profits by said monopolies and cartels has of course strengthened the position of capital
relative to labour.
So my preferred term for current day arrangements is cartel capitalism. If you want to be more
pejorative there is of course crony capitalism and corrupt capitalism.
Glad you highlighted economic concentration. That used to be a deservedly emphasized part of
a critical analysis of capitalism but for some reason - did we just come to accept it? - fell
to second rank or backbench status. Perhaps it got folded into the idea of "multinational corporation,"
but that concept more immediately evokes globalization and the mobility of production rather than
concentration and the power that comes with it.
Monopolies that took decades to split away, over time gradually began to reemerge. I can't
place where I saw this, but there was an article about how "Ma Bell" was split into 10-12 regional
bells. Given enough time, we're somewhat nearly back where that started.
Plus in 1994, I think, the act passed to Congress eliminating / reducing restrictions on bank
consolidation over state lines. Just from my native state, that resulted in WachFirstOvia and
Bank of America. (Granted there have been smaller start up institutions using regional executives
and regional capital).
These posts are an interesting exercise which I find to be almost entirely lacking in critical
content. What difference does it make to quibble over the name of the current disaster (neoliberalism
it is) if no real attempt is made to explain what neoliberalism is and how it came to be? Professor
Kotz's book may be very good in this regard (I haven't yet had a chance to read it), but this
effort from my vantage point does not sufficiently explain neoliberalism to those not already
familiar with it; nor does it offer anything of particular interest to those who are.
The problem of dealing with neoliberalism is, in my opinion, coming to grips with the history
and philosophy behind it - and that is not simply accomplished. Neoliberalism is philosophy based
upon deceit and deliberate obfuscation of its goals and objectives. It is not simply capitalism.
It is an orchestrated effort to control the power and wealth of the world - and it is, by and
large succeeding. Without properly understanding the forces behind and within neoliberalism, I
don't believe that it is possible to formulate any real effort to stem the tide of its successes.
It is ultimately a self-destructive formulation, but the level of that destruction may well be
something none of us wish to experience.
Anyone truly interested in understanding neoliberalism should be reading the works of Philip
Mirowski, The Road From Mont Pelerin and Never Let A Serious Crisis Go To Waste. Professor Kotz's
book may well add to this, but this posting, I am sorry to day, does not. I in no way wish do
denigrate the work of those, including Professor Kotz, at the University of Massachusetts, Amherst
as they are among the best in the nation at standing up to neoliberalism and neoclassical economics.
I just wish this could have been a more useful post.
One of the interesting facets of globalization is its dependence on government subsidies. Some
are structural, such as social programs substituting for living wages, but many are direct transfers
of assets to corporations. Special currency exchange rates, forgivable loans, government gathering
of foreign intellectual property, free land, etc, all save the companies the expected business
expenses. This is on top of import barriers, local preference buying, and other help.
The justification is, of course, greater national economic activity/jobs. Americans call this
'smokestack chasing', but here its heyday's come and gone. Partly because states and cities have
figured out the math doesn't work. The government spends far more money than they could ever hope
for in taxes, even when the whole enterprise doesn't go bust. Today, any subsidy a corporation
wrings out of the locals is usually hedged with conditions that make it at least look like an
even deal. Before, it was a matter of faith.
Without government subsidies, would the foreign trade portion of globalization exist? Foreign
ownership, like any ownership, is protected by government. And that's a choice, too. But would
'cheap labor' or 'lack of environmental laws' really make up the difference? Seems global capitalism
depends on national boundaries.
I read Mirowski's "Never Let A Serious Crisis " two years ago, and as Paul Heideman's positive
review in "www.jacobinmag" concluded, it nonetheless left me wanting for an explanation of just
how a set of ideas enamating originally from the obscure Mont Pelerin Society (however influential)
could gain such worldwide traction, and seeking perhaps a social-anthropological or political
answer to that query. In "The Making of Global Capitalism" Panitch & Gindin point unequivocally
to the "pivitol role" of US state institutions (since WW2) in orchestrating (with other elites)
opportunities and overcoming difficulties in making the world free for what Michael Hudson would
say is primarily US "(fiat)-capital" (since the floating exchange rate regime with dollar as
key came into effect in 1971). Given the advantage to the US of the dollar as world reserve currency;
of the role US public & private institutions in maintaining that status and thwarting any challenges;
and the role of the US military in overall guardianship, (and the advantages Panitch & Gindin
point out that these factors have given real US industry in maintaining a lead in the more advanced
technologies & industries, (and how mutually supporting all these forces are of each other)) I
am inclined towards (the intemperate!-) Paul Craig Robert's assertion that NeoLiberalism is essentially
a US imperial project. Like many imperialisms of old, it relies on well rewarded local elites
playing their part in the outposts. But the loss of dollar and/or military hegemony would surely
lead to a significant retrenchment and a major realignment of world trade & development patterns,
not to mention financial flows? Hence the struggles we see today, to retain hegemonic status.
The amazing thing is, as playwright Harold Pinter said, how this "imperialism" is accepted as
representing "freedom", "democracy", "rule of law" even just the very longterm natural evolution
of barter, in the form of modeern "markets"!
and the real dirty secret is, Americans love every second of it. they are consuming more than
ever.
Capitalism was global from the 19th century until the 1914 when WWI broke out. Before that
time, Europe was the modern America and America was modern BRIC. From a Babylon 5 pov, this was
the beginning of the transfer from the Brits to the US as the dominate global power. The Axis
were the "Shadows" while the Allies were the Vorlons. During this period of 1914-89, capitalism
receded back into nationalism and 'perceived' threats like communism. The first breakdown in this
was the global crisis in the mid-70's when the Soviet Union got hit by a crippling blow. Another
factor was the rising American living standards coupled with mass production still mostly inhabiting
the homeland. Capitalism does not do well with rising living standards. It can't make profit amid
dwindling supplies and high living standards. In Hitlerian talk, it needs breathing room. The
late 60's the results were coming in, inflation began to accelerate in the US, driving inflation
globally. The end result was the new global period and cheap sources of production to drive consumption
in the US via debt.
The best insight of the change that started in 1980 that I've found is Emmanuel Todd's.
"The United States itself, which was once a protector and is now a predator." Neo-liberalism is
confusing. Predatory Capitalism is reality.
"... The film compares the rise of the neoconservative movement in the United States and the radical Islamist movement, drawing comparisons between their origins, and remarking on similarities between the two groups. More controversially, it argues that radical Islamism as a massive, sinister organisation, specifically in the form of al-Qaeda, is a myth, or noble lie, perpetuated by leaders of many countries-and particularly neoconservatives in the U.S.-in a renewed attempt to unite and inspire their people after the ultimate failure of more utopian ideas. ..."
Here's a little something to rouse you from your post-Thanksgiving torpor; the first part of a
three-part 2004 series by Adam Curtis called "The Power of Nightmares." The title seems strangely
a propos, what?
Here's the WikiPedia
summary:
The film compares the rise of the neoconservative movement in the United States and the
radical Islamist movement, drawing comparisons between their origins, and remarking on similarities
between the two groups. More controversially, it argues that radical Islamism as a massive, sinister
organisation, specifically in the form of al-Qaeda, is a myth, or noble lie, perpetuated by leaders
of many countries-and particularly neoconservatives in the U.S.-in a renewed attempt to unite
and inspire their people after the ultimate failure of more utopian ideas.
I'm not going to attempt to tease out any systematic implications from listening to the series
right now, but well worth the listen it is. So many old friends from back in 2003, when those whackjobs
in the Bush administration were only starting to lose the wars in Iraq and Afghanistan! Random thoughts:
1)
Leo Strauss is a horrible human being, who has a lot to answer for.
3) The neocons make Henry Kissinger look like a Boy Scout.
4) Best quote: "The Soviets had developed systems that were so sophisticated that they were undetectable."
5) Sayyid Qutb, the Egyptian
Islamic theorist counterpoised by Curtis to Strauss, sees the United States "as obsessed with materialism,
violence, and sexual pleasures." What a nut job! To be fair, if the Egyptian government hadn't tortured
him, Qutb might never have come up with the
Jahiliyyah concept,
which, at least as I hear Curtis tell it, means that you're so corrupt that you can't even know you're
corrupt.
* * *
Nightmares is mostly archive footage plus a soundtrack, with Curtis narrating. So if
you want to listen to it with your morning coffee, the way one listened to NPR before it became evident
how horrid NPR is, that will work; you don't have to sit in front of the screen.
The Power of Nightmares 2: The Rise of the Politics of Fear (BBC-2004) Posted on
by
Yves Smith
"... In practice, however, neoliberalism has created a market state rather than a small state. Shrinking the state has proved politically impossible, so neoliberals have turned instead to using the state to reshape social institutions on the model of the market - a task that cannot be carried out by a small state. ..."
"... The Neoliberal State ..."
"... Neoliberals are not anarchists, who object to any kind of government, or libertarians, who want to limit the state to the provision of law and order and national defense. A neoliberal state can include a welfare state, but only of the most limited kind. Using the welfare state to realize an ideal of social justice is, for neoliberals, an abuse of power: social justice is a vague and contested idea, and when governments try to realize it they compromise the rule of law and undermine individual freedom. The role of the state should be limited to safeguarding the free market and providing a minimum level of security against poverty. ..."
"... Plant's central charge against neoliberalism is that, when stated clearly, it falls apart ..."
"... Neoliberalism and social democracy are not entirely separate political projects; they are dialectically related, the latter being a kind of synthesis of the contradictions of the former. ..."
"... But it is one thing to argue that the neoliberal state is conceptually unstable, another to suggest that social democracy is the only viable alternative. Neoconservatives have been among the sharpest critics of neoliberalism, arguing that the unfettered market is amoral and destroys social cohesion. ..."
"... Immanent criticism can show that the neoliberal theory of the state is internally contradictory. It cannot tell us how these contradictions are to be resolved - and in fact neoliberals who have become convinced that the minimal welfare state they favour is politically impossible do not usually become social democrats. Most opt for a conservative welfare state, which aims to prepare people for the labour market rather than promoting any idea of social justice. ..."
"... A more likely course of events is that social democracy will be eroded even further. ..."
"... The crisis is deep-rooted, and neoliberalism has no remedy for its own failure. ..."
"... Although the deregulated banking system may have imploded, capital remains highly mobile. Bailing out the banks has shifted the burden of toxic debt to the state, and there is a mounting risk of a sovereign debt crisis as a result. In these conditions, maintaining the high levels of public spending that social democracy requires will be next to impossible. ..."
John Gray Neoliberals
wanted to limit government, but the upshot of their policies has been a huge expansion in the power
of the state. Deregulating the financial system left banks free to speculate, and they did so with
reckless enthusiasm. The result was a build-up of toxic assets that threatened the entire banking
system. The government was forced to step in to save the system from self-destruction, but only at
the cost of becoming itself hugely indebted. As a result, the state has a greater stake in the financial
system than it did in the time of Clement Attlee. Yet the government is reluctant to use its power,
even to curb the gross bonuses that bankers are awarding themselves from public funds. The neoliberal
financial regime may have collapsed, but politicians continue to defer to the authority of the market.
Hardcore Thatcherites, and their fellow-travellers in New Labour, sometimes question whether there
was ever a time when neoliberal ideas shaped policy. Has public spending not continued to rise over
recent decades? Is the state not bigger than it has ever been? In practice, however, neoliberalism
has created a market state rather than a small state. Shrinking the state has proved politically
impossible, so neoliberals have turned instead to using the state to reshape social institutions
on the model of the market - a task that cannot be carried out by a small state.
An increase in state power has always been the inner logic of neoliberalism, because, in order
to inject markets into every corner of social life, a government needs to be highly invasive. Health,
education and the arts are now more controlled by the state than they were in the era of Labour collectivism.
Once-autonomous institutions are entangled in an apparatus of government targets and incentives.
The consequence of reshaping society on a market model has been to make the state omnipresent.
Raymond Plant is a rarity among academic political theorists, in that he has deep experience of
political life (before becoming a Labour peer he was a long-time adviser to Neil Kinnock). But he
remains a philosopher, and the central focus of The Neoliberal State is not on the ways
in which neoliberalism has self-destructed in practice. Instead, using a method of immanent criticism,
Plant aims to uncover contradictions in neoliberal ideology itself. Examining a wide variety of thinkers
- Michael Oakeshott, Friedrich Hayek, Robert Nozick, James Buchanan and others - he develops a rigorous
and compelling argument that neoliberal ideas are inherently unstable.
Neoliberals are not anarchists, who object to any kind of government, or libertarians, who
want to limit the state to the provision of law and order and national defense. A neoliberal state
can include a welfare state, but only of the most limited kind. Using the welfare state to realize
an ideal of social justice is, for neoliberals, an abuse of power: social justice is a vague and
contested idea, and when governments try to realize it they compromise the rule of law and undermine
individual freedom. The role of the state should be limited to safeguarding the free market and providing
a minimum level of security against poverty.
This is a reasonable summary of the neoliberal view of the state. Whether this view is underpinned
by any coherent theory is another matter. The thinkers who helped shape neoliberal ideas are a very
mixed bag, differing widely among themselves on many fundamental issues. Oakeshott's scepticism has
very little in common with Hayek's view of the market as the engine of human progress, for example,
or with Nozick's cult of individual rights.
It is a mistake to look for a systematic body of neoliberal theory, for none has ever existed.
In order to criticise neoliberal ideology, one must first reconstruct it, and this is exactly what
Plant does. The result is the most authoritative and comprehensive critique of neoliberal thinking
to date.
Plant's central charge against neoliberalism is that, when stated clearly, it falls apart
and is finally indistinguishable from a mild form of social democracy. Plant is a distinguished
scholar of Hegel, and his critique of neoliberalism has a strongly Hegelian flavour. The ethical
basis of the neoliberal state is a concern for negative freedom and the rule of law; but when these
ideals are examined closely, they prove either to be compatible with social democracy or actually
to require it. Neoliberalism and social democracy are not entirely separate political projects;
they are dialectically related, the latter being a kind of synthesis of the contradictions of the
former. Himself a social democrat, Plant believes that the neoliberal state is bound as a matter
of morality and logic to develop in a social-democratic direction.
But it is one thing to argue that the neoliberal state is conceptually unstable, another to
suggest that social democracy is the only viable alternative. Neoconservatives have been among the
sharpest critics of neoliberalism, arguing that the unfettered market is amoral and destroys social
cohesion. A similar view has recently surfaced in British politics in Phillip Blond's "Red Toryism".
Immanent criticism can show that the neoliberal theory of the state is internally contradictory.
It cannot tell us how these contradictions are to be resolved - and in fact neoliberals who have
become convinced that the minimal welfare state they favour is politically impossible do not usually
become social democrats. Most opt for a conservative welfare state, which aims to prepare people
for the labour market rather than promoting any idea of social justice.
If there is no reason in theory why the neoliberal state must develop in a social-democratic direction,
neither is there any reason in practice. A more likely course of events is that social democracy
will be eroded even further. The banking crisis rules out any prospect of a return to neoliberal
business-as-usual. As Plant writes towards the end of the book: "It has been argued that the central
cause of the banking crisis is a failure of regulation in relation to toxic assets . . . This, however,
completely neglects the systemic nature of the problems - a systemic structure that has itself been
developed as a result of liberalisation, that is, the creation of new assets without normal market
prices and their diffusion throughout the banking system." The crisis is deep-rooted, and neoliberalism
has no remedy for its own failure.
The upshot of the crisis is unlikely, however, to be a revival of social democracy. Although
the deregulated banking system may have imploded, capital remains highly mobile. Bailing out the
banks has shifted the burden of toxic debt to the state, and there is a mounting risk of a sovereign
debt crisis as a result. In these conditions, maintaining the high levels of public spending that
social democracy requires will be next to impossible. Neoliberalism and social democracy may
be dialectically related, but only in the sense that when the neoliberal state collapses it takes
down much of what remains of social democracy as well.
The Neoliberal State
Raymond Plant Oxford University Press, 304pp, £50
John Gray is the New Statesman's lead book reviewer. His book "False Dawn: the Delusions
of Global Capitalism", first published in 1998, has been reissued by Granta Books with a new introduction
(£8.99) His latest book is
The Soul of the Marionette: A Short Enquiry into Human Freedom .
"... Hillary Clinton and her lackeys will be taking a lot of heat for their shady actions in the primaries, get berned! ..."
"... How could Hillary be the best qualified candidate of all time??? She was a liar. Just being a woman does not automatically make you the best person ..."
"... A nice way of understanding this is the media, pollsters and pseudo liberal's use of the term popularist. This has been identified as the danger and a type of ignorance/stupidity if you just reflect for a moment it could be seen as a synonym for the majority. ..."
"... Trump' victory marks the profound failures of the political and economic system in America and across the West. It is a complete failure of the Clinton and the DNC establishment approach to politics ..."
"... The Guardian should have supported Bernie Sanders' campaign. There was a systemic failure to acknowledge and recognise the intense disillusionment and sweeping anti-establishment zeitgeist among huge numbers of the electorate both in America and Europe. ..."
How could Hillary be the
best qualified candidate of
all time??? She was a liar.
Just being a woman does not
automatically make you the
best person, there are other
honest and more competent
women.
Granted Trump isn't
ideal but Hilary was equally
divisive and assumed the
whole fiasco was about her
being the first woman to
make it into the white house
than the policy issues that
needed serious tackling.
This is a revolution against
the media and the pollsters
stuck in the washington/westminster
bubble. It was obvious to
any objective observer that
Trump was going to win.
The liberal media and the
pollsters just as in Brexit
have had an incredulous
bioptic view of what was
happening.
Not once in 18 months has
there been a serious attempt
to understand Trump's appeal
and what he was really
saying, not once.
A nice way of understanding
this is the media, pollsters
and pseudo liberal's use of
the term popularist. This
has been identified as the
danger and a type of
ignorance/stupidity if you
just reflect for a moment it
could be seen as a synonym
for the majority.
The people want change even
if it comes from Trump.
I wonder if Farage is
thinking of staying on as
leader?
Trump' victory marks the
profound failures of the
political and economic
system in America and across
the West. It is a complete
failure of the Clinton and
the DNC establishment
approach to politics.
The
Guardian should have
supported Bernie Sanders'
campaign. There was a
systemic failure to
acknowledge and recognise
the intense disillusionment
and sweeping
anti-establishment zeitgeist
among huge numbers of the
electorate both in America
and Europe.
"... I am not sure that any serious force is able to challenge American's oligarchy in a class war in modern conditions. There is no any really powerful countervailing force able to challenge status quo. ..."
"... But neoliberalism does it in its own way: humans are considered to be market actors and nothing but market actors. Every activity is viewed as a market. Everything whether person, business, or state is considered an entity that should be governed as a firm striving for market share. ..."
"... The USA foreign policy so far remains brutal expansionism, opening one country after another to large transnationals, which are the key political players under neoliberalism and definitely represent power that be in the USA along the lines of 'shadow state" thinking and inverted totalitarism model. ..."
"... While the next economic crisis is given, how the next stage of self-destruction of neoliberalism will look is fuzzy. Much depends on price and availability of oil which recently demonstrated a completely unexpected and dramatic drop. ..."
"... One thing is certain: with high oil prices neoliberal society inevitably enters "secular stagnation". But the threshold between "normal" and "high" oil prices itself is subject to revisions due to technology advances and our ability to find sustainable energy substitutes for oil. ..."
"... Electoral democracy places some limit on the excesses of plutocracy. ..."
"... You mean we can not express our will with our, or some else's money? Are we forced to borrow and spend by the plutocracy, and thus become enslaved to the rent seekers? ..."
"... Krugman quickly passes over the hypothesis that the growth in international trade was responsible for the growing the gap between the wages of college educated and non-college educated workers. But I'd like to see more empirical support for the dismissal. ..."
"... In a globalized system in which both capital and finished goods can move across borders, and in which industries have complex production chains, why couldn't it be the case the effect of this openness on developed economies is to disaggregate existing industries and then trade for, or offshore, only the lower skill components of those industries? ..."
"... Good to see these guys stumping to challenge the oligarchy. Where were they forty years ago? Oh, I forgot. We are just learning about hysteresis. Socio-political evolution is barely understood.] ..."
"... Starting in the mid-1930s, a handful of prominent American businessmen forged alliances with the aim of rescuing America--and their profit margins--from socialism and the "nanny state." Long before the "culture wars" usually associated with the rise of conservative politics, these driven individuals funded think tanks, fought labor unions, and formed organizations to market their views. These nearly unknown, larger-than-life, and sometimes eccentric personalities--such as GE's zealous, silver-tongued Lemuel Ricketts Boulware and the self-described "revolutionary" Jasper Crane of DuPont--make for a fascinating, behind-the-scenes view of American history. ..."
"... It is not just Fox. The mainstream media is just as much a part of the corporatocracy as GE or Goldman Sachs. Consolidated market power knows no bounds as long as people like you and me cannot organize ourselves into electoral solidarity. ..."
"... Fox speaks its lies to a certain set of willful fools. Fox does tell the only lies and the viewers of Fox are not the only willful fools. MULP tells a truer story when he is on his meds. ..."
"... Meanwhile, phony progressive liberals like pgl continue to champion trickle down monetary policies. With seven years of trickle down monetary policy, the results are obvious--the 1% won. As Saez found, the 1% got 58% of the gains of this 'recovery.' Meanwhile, real median household income has dropped to where it was 20 years ago. ..."
"... Yet phony liberals here continue to carry water for Wall Street, always holding out the myth that Fed policy is designed to raise workers' wages...even after seven years of evidence to the contrary. ..."
"... As always when there is conflict, there are plenty of people willing to serve as a fifth column, claiming to serve the interests of the many while actually helping the wealthy. ..."
These days, Reich offers a much darker vision, and what is in effect a call for class
war-or if you like, for an uprising of workers against the quiet class war that America's oligarchy
has been waging for decades. ...
=== end of quote ===
Looks like such calls are meaningless. I am not sure that any serious force is able to challenge
American's oligarchy in a class war in modern conditions. There is no any really powerful countervailing
force able to challenge status quo.
Neoliberal thinking still penetrates the society and even after 2008 neoliberalism remains
the dominant ideology all over the world. and the USA remain the citadel of neoliberalism and
still manages to invade smaller nations to open their markets. In a way neoliberalism is parody
on Marxism (Trotskyism for the rich) a governing rationality in which everything like In Marxism
is "economized".
But neoliberalism does it in its own way: humans are considered to be market actors and nothing
but market actors. Every activity is viewed as a market. Everything whether person, business,
or state is considered an entity that should be governed as a firm striving for market share.
Even such activities as education, dating, or exercising are viewed in market terms. The idea
is to submits them to market metrics, and governs them using market-based approaches and practices.
Humans are viewed as chunks of human capital who must constantly strive to increase their market
value or face consequences.
Unions are emasculated. Movements like Occupy are infiltrated and repressed pretty mercilessly
using all arsenal of method of police/national security state, which was preemptively created
after 9/11.
Minorities protests in impoverished cites (which often start as protests against police brutality)
are swiped under the carpet. And eventually suppressed.
The USA foreign policy so far remains brutal expansionism, opening one country after another
to large transnationals, which are the key political players under neoliberalism and definitely
represent power that be in the USA along the lines of 'shadow state" thinking and inverted totalitarism
model.
In other words like cancer transforms cells, neoliberalism transforms the whole societies into
profit making machines for top 1%.
Events of 2008 and this "Heil Mary pass" that was Bernanke monetary policy suggests that there
are already some serious cracks in the neoliberal economic model. But how and when the next stage
of self-destruction occurs is anybody guess. While the next economic crisis is given, how the
next stage of self-destruction of neoliberalism will look is fuzzy. Much depends on price and
availability of oil which recently demonstrated a completely unexpected and dramatic drop.
One thing is certain: with high oil prices neoliberal society inevitably enters "secular
stagnation". But the threshold between "normal" and "high" oil prices itself
is subject to revisions due to technology advances and our ability to find sustainable energy
substitutes for oil.
RC AKA Darryl, Ron -> likbez...
That was a poorly edited but still cogent summation of our current state of affairs.
Electoral democracy places some limit on the excesses of plutocracy. They must maintain some combination
of mystique behind the curtain or popular complacency towards the wizards hijinks in order for
there to be no electoral solidarity to overturn the status quo. We don't need pitchforks nor guillotines
if we stick together in the ballot box.
mulp -> RC AKA Darryl, Ron...
You mean we can not express our will with our, or some else's money? Are we forced to borrow and spend by the plutocracy, and thus become enslaved to the rent seekers?
Why can't we go on strike and not buy anything?
Doesn't anyone understand that high profits will not increase gdp?
Only spenders will increase gdp? And if profits are high, it will require borrow and spend to
increase gdp followed by enslavement to the rent seekers. If income inequality is high, it will
require borrow and spend to increase gdp, followed by enslavement to rent seekers.
Becoming homeless is the ultimate blow struck against the plutocrats. Living in a car board box
and eating from dumpsters drives down gdp and thus drives down profits destroying wealth.
RC AKA Darryl, Ron -> mulp...
You have your moments and then there are times like this.
Dan Kervick said...
Krugman quickly passes over the hypothesis that the growth in international trade was responsible
for the growing the gap between the wages of college educated and non-college educated workers.
But I'd like to see more empirical support for the dismissal. He says,
"Around 1990, trade with developing countries was still too small to explain the big
movements in relative wages of college and high school graduates that had already happened.
Furthermore, trade should have produced a shift in employment toward more skill-intensive industries;
it couldn't explain what we actually saw, which was a rise in the level of skills within industries,
extending across pretty much the entire economy."
On that second point, both older classical trade theory and "new" trade theory seem to operate
at the level of whole industries. But why? In a globalized system in which both capital and finished
goods can move across borders, and in which industries have complex production chains, why couldn't
it be the case the effect of this openness on developed economies is to disaggregate existing
industries and then trade for, or offshore, only the lower skill components of those industries?
Whether or not this impact was "too small", as Krugman says, to account for the entirety of
the big movements in relative wages, the point is not to identity a single monocausal explanation
for the changes, but to piece together a number of contributing factors that are part of the puzzle.
RC AKA Darryl, Ron said...
[When I advocate better public education the channel by which it would exert greater equality
is via political power, not just higher paying jobs.
Good to see these guys stumping to challenge the oligarchy. Where were they forty years ago?
Oh, I forgot. We are just learning about hysteresis. Socio-political evolution is barely understood.]
The Making of the Conservative Movement from the New Deal to Reagan
Kim Phillips-Fein (Author)
A narrative history of the influential businessmen who fought to roll back the New Deal.
Starting in the mid-1930s, a handful of prominent American businessmen forged alliances
with the aim of rescuing America--and their profit margins--from socialism and the "nanny
state." Long before the "culture wars" usually associated with the rise of conservative
politics, these driven individuals funded think tanks, fought labor unions, and formed
organizations to market their views. These nearly unknown, larger-than-life, and sometimes
eccentric personalities--such as GE's zealous, silver-tongued Lemuel Ricketts Boulware and
the self-described "revolutionary" Jasper Crane of DuPont--make for a fascinating,
behind-the-scenes view of American history.
The winner of a prestigious academic award for her original research on this book, Kim Phillips-Fein
is already being heralded as an important new young American historian. Her meticulous research
and narrative gifts reveal the dramatic story of a pragmatic, step-by-step, check-by-check campaign
to promote an ideological revolution--one that ultimately helped propel conservative ideas to
electoral triumph.
ilsm -> RC AKA Darryl, Ron...
Media is a problem!
Without the teachers' unions there is no education.
The battle of the educated mind is lost when the likes of Fox go undisputed and are sold as
news.
We have always been at war with Shiites for the Sunni oil masters.....
RC AKA Darryl, Ron -> ilsm...
It is not just Fox. The mainstream media is just as much a part of the corporatocracy as GE
or Goldman Sachs. Consolidated market power knows no bounds as long as people like you and me
cannot organize ourselves into electoral solidarity.
RC AKA Darryl, Ron -> RC AKA Darryl, Ron...
Fox speaks its lies to a certain set of willful fools. Fox does tell the only lies and the
viewers of Fox are not the only willful fools. MULP tells a truer story when he is on his meds.
JohnH said...
Meanwhile, phony progressive liberals like pgl continue to champion trickle down monetary policies.
With seven years of trickle down monetary policy, the results are obvious--the 1% won. As Saez
found, the 1% got 58% of the gains of this 'recovery.' Meanwhile, real median household income
has dropped to where it was 20 years ago.
Stiglitz said it well in his 'Price of Inequality:' a macroeconomic policy and a central bank
by and for the 1%.
Yet phony liberals here continue to carry water for Wall Street, always holding out the
myth that Fed policy is designed to raise workers' wages...even after seven years of evidence
to the contrary.
As always when there is conflict, there are plenty of people willing to serve as a fifth
column, claiming to serve the interests of the many while actually helping the wealthy.
JohnH -> RC AKA Darryl, Ron...
When someone champions policies that have overwhelmingly benefited the wealthy while claiming
that they benefit workers, what do you call them but phony?
Let's see how do pgl's policy prescriptions differ from those advocated by Wall Street banks?
- they both champion low interest rates
- they both hate taxing the wealthy to address inequality and fund stimulus
- they both have been cozy with Wall Street Democrats
- both hail from New York City.
Seem to me that pgl and Wall Street bankers have more in common than differences...
pgl -> JohnH...
"Let's see how do pgl's policy prescriptions differ from those advocated by Wall Street
banks?"
I'm for Dodd-Franks. I support higher capital ratios. I'm all in on what Liz Warren is supporting.
Now if you think the banksters agree with me on these fundamental reforms - then you are even
dumber than I give you credit for. Run along angry lying worthless stupid troll.
"... "Business must learn the lesson . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination-without embarrassment and without the reluctance which has been so characteristic of American business." ..."
"... "Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations." ..."
"... The number of corporate Political Action Committees soared from under 300 in 1976 to over 1,200 in 1980, and their spending on politics grew fivefold. In the early 1970s, businesses spent less on congressional races than did labor unions; by the mid-1970s, the two were at rough parity; by 1980, corporations accounted for three-quarters of PAC spending while unions accounted for less than a quarter. Then came Ronald Reagan's presidency, corporate control of the Republican Party, and a Republican-dominated Supreme Court and its "Citizens United" decision. ..."
Right-wing mega-donor Sheldon Adelson has just bought the biggest newspaper in Nevada, the Las Vegas
Review-Journal -- just in time for Nevada's becoming a key battleground for the presidency and for
the important Senate seat being vacated by Harry Reid. It's not quite like Rupert Murdoch's ownership
of Fox News and the Wall Street Journal, but Adelson's purchase marks another step toward oligarchic
control of America and the relative decline of corporate power.
Future historians
will note that the era of corporate power extended for about 40 years, from 1980 to 2016 or 2020.
It began in the 1970s with a backlash against Lyndon Johnson's Great Society (Medicare, Medicaid,
the EPA and OSHA). In 1971, future Supreme Court justice Lewis Powell warned corporate leaders that
the "American economic system is under broad attack," and urging them to mobilize. "Business
must learn the lesson . . . that political power is necessary; that such power must be assiduously
cultivated; and that when necessary, it must be used aggressively and with determination-without
embarrassment and without the reluctance which has been so characteristic of American business."
He went on: "Strength lies in organization, in careful long-range planning
and implementation, in consistency of action over an indefinite period of years, in the scale of
financing available only through joint effort, and in the political power available only through
united action and national organizations."
Soon thereafter, corporations descended on Washington. In 1971, only 175 firms
had Washington lobbyists; by 1982, almost 2,500 did. Between 1974 and 1980 the U.S. Chamber of Commerce
doubled its membership and tripled its budget. In 1972, the National Association of Manufacturers
moved its office from New York to Washington, and the Business Roundtable was formed, whose membership
was restricted to top corporate CEOs.
The number of corporate Political Action Committees soared from under 300 in
1976 to over 1,200 in 1980, and their spending on politics grew fivefold. In the early 1970s, businesses
spent less on congressional races than did labor unions; by the mid-1970s, the two were at rough
parity; by 1980, corporations accounted for three-quarters of PAC spending while unions accounted
for less than a quarter. Then came Ronald Reagan's presidency, corporate control of the Republican
Party, and a Republican-dominated Supreme Court and its "Citizens United" decision.
"... Railroading Economics: The Creation of the Free Market Mythology ..."
"... The Wal-Mart Revolution ..."
"... Schnurr's speech was part of a yearlong campaign to oust Doty and thwart his efforts to implement rules that would increase auditors' accountability to investors and their independence from the companies they audit. ..."
"... Doty's efforts have floundered, in large part because Schnurr's office has used its oversight powers to block, weaken and delay them, according to a dozen current and former SEC and PCAOB officials. Schnurr's staff has also campaigned to have Doty removed from office, these people said. ..."
Continuing our series of
book reviews in time for the holiday gift-giving season, here's a quick look at Michael Perelman's
Railroading Economics, a title, and a subject, that intrigued me for two reasons. Trivially,
as readers know, I'm by way of being a
rail fan; more importantly, when I was a mere sprat, I read Matthew Josephson's Robber Barons.
Josephson's tales of
Jim Fisk watering
the stock of the Erie Railroad - "Gone where the woodbine twineth" was Fisk's answer to where the
money went - and his running buddy
Jay Gould - "I can hire one
half of the working class to kill the other half" (attributed) - trying to corner the gold market
would inoculate anyone from belief in the ideology of "perfect competition." They certainly did me.
Perelman begins (p.1):
The title of this book, Railroading Economics, has multiple meanings. The verb "railroading"
refers to the ideological straitjacket of modern economics, which teaches that the market is the
solution to all social and economic problems. The adjective "railroading" refers to the experience
of economists during the late nineteenth century when the largest industry in the country, railroading,
was experiencing terrible upheavals. Many of the leading eocnomists at the time came to grips
with the destructive nature of market forces. Competition, which according to conventional economics,
is supposed to guide business to make decisions that will benefit everybody, was driving business
into bankruptcy and common people into poverty.
That lesson was never allowed to take hold among economists. In fact, the same economists continue
to teach their students that markets work in perfect harmony, while they advised policy makers
to take quick action to put the brakes on competition. In effect, the railroad economists railroaded
economics into perpetuating a free market mythology.
This is a long and complicated story, and Perelman tells it well. Since Perelman is a radical
economist from a non-Ivy League School, reviews of his book are few and far between.
Here's one from an orthodox economist (latest book: The Wal-Mart Revolution) that to
my untutored eye seems to summarize Perelman's thesis fairly:
[Michael Perelman's new book] is a highly readable, lucidly written, and provocative account
of the evolving American economy. Moreover, readers of this site would be pleased that this is
a rare economist who draws very heavily on insights from economic history and even the history
of economic thought in reaching conclusions about the contemporary American economy. Also, the
book has lots of solid footnotes showing a serious appreciation of much of the relevant scholarly
literature of the past century or more .
According to Perelman, classical economics emerged out of an agrarian society where the presumption
of pure competition was fairly reasonable. Over time, however, massive capital-intensive businesses
evolved, notably the railroads, with very high fixed costs. The neoclassical notion that profit-maximizing
firms would produce where marginal costs equaled marginal revenue and price (in pure competition)
simply did not fit the reality of these new natural monopolies. Competition was destabilizing,
led to overinvestment, and paved the way for unscrupulous financiers like Jay Gould. In Perelman's
view, "the increasing relative importance of fixed costs means that competition would lead
to utter chaos" (p. 46). A group of "railroad economists" or corporatists understood all this,
but they were largely ignored by conventional economists who developed a "quasi-religious" and
"ideological" (p. 99) fervor towards their theoretical models, a fervor that persists today.
Perelman thinks that in pursuing competition, prices were forced so low that many railroads
were forced into bankruptcy, much as is happening in airlines today. This opens the door for the
"financial capitalists" who make money reducing competition (via mergers) and reorganizing bankrupt
companies, getting rich in the process and hurting workers of the involved companies. The Enron/WorldCom
problems of the early twenty-first century are not that different from those created by J.P. Morgan
organized mergers of a century earlier, best symbolized by the formation of U.S. Steel.
In Perelman's eyes, the instability arising from the lack of realization of the importance
of fixed costs, the machinations of financial interests, and so forth, have caused internal contradictions
in capitalism. He opines that "an economy built increasingly on finance is a disaster waiting
to happen" (p. 198), concluding "I look forward to the day when we no longer rely on competition
for monetary rewards when cooperation and social planning replace the haphazard world of the
market place" (p. 200).
Needless to say, the orthodox reviewer vehemently disagrees; readers can follow up at the link.
At this point, however, magpie-like, I want to pass on from assessing Perelman's thesis to display
a bright, shiny object I collected from the text. As the post title suggests, it's about accounting!
(Note the focus on fixed, long-lived capital; railroads have rather a lot of it.) From pp. 58-59:
What about accounting as an anchor for business rationality? Certainly, the widespread adoption
of seemingly solid accounting practices contributed to the illusion of a sound basis for business
action. Even as astute an observer as Max Weber associated accounting practices with rationality.
This attitude toward accounting is not surprising. Indeed, the erratic movements of markets disappear
in the accountant's ledgers, which exude a misleading image of straightforward calculations of
profit and loss.
First, accounts are necessarily backward-looking. Accountants must necessarily
base their calculations on historical costs, even though they can make allowances for changes
that have occurred since the original purchase. Since account books are based on historical
information, they will be better guides if the business is a relatively short-lived affair. After
all, tomorrow is more likely to resumble today than sometime in the far-off future will.
Second, the methods that accountants use to make these adjustments are necessarily based on
inexact conventions rather than precise measurements. Finally, as the dot com bubble proved [the
book was published in 2006] accountants can easily mislead even supposedly sophisticated investors.
Accounting firms even accommodated failing corporations by providing fraudulent information [of
which more below] rather than risk losing lucrative contracts.
So much for accounting. But wait! There's more!
The treatment of capital in conventional economic theory had its origins in the long-obsolete
accounting principles of early merchants. The economic environment of the early merchants' shops
conditioned later accounting practices, especially their treatment of fixed capital. Even as late
as the time of Adam Smith more than two centuries ago, fixed capital requirements were relatively
modest. Since accountants have never been able to discover a satisfactory method of handling
long-lived capital goods, accounting provides a frail foundation for business rationality in a
developed economy where long-lived fixed capital assumes great importance.
Ronald Coase once noted that an accountant would say that the cost of a machine is the depreciation
of the machine. The economist would say that "the cost of using the machine is the highest receipts
that could be obtained by the employment of the machine in some alternative use." If no alternative
exists, the cost of the machine is zero
Ideally, Coase is correct. Unfortunately, no economist can hope to calculate the highest receipts
that could be obtained. To do so would require knowledge of the future of all industries that
could possibly use the machine. As a result, economists generally either accept the accountant's
calculations in violation of their own principles or they assume away the problem of long-lived
capital goods.
Economists rarely consider this defect in economics because they avoid any serious consideration
of time in their models. Instead, in dealing with investment decisions, the models typically pretend
that investors are able to accurately foresee the future.
All that is solid melts into air. (Orthodox) economics assumes a soothsayer. And accounting provides
no basis for business rationality (at least if one is more than a shopkeeper). How does one even
begin to process that information? (Here let me welcome corrections and clarifications from readers
familiar with current accounting practice and theory.)
* * *
So what's accounting for, then? Perhaps the news flow will provide a clue. From
Reuters (but leaving out most of the detail on a sadly usual
flexian infestation):
Accounting industry and SEC hobble America's audit watchdog
The Public Company Accounting Oversight Board was set up [by Dodd-Frank] to oversee the auditing
profession after a rash of frauds. The industry got the upper hand, as the story of the board's
embattled chief shows.
James Schnurr, just two months into his job as chief accountant at the U.S. Securities and
Exchange Commission, stood before a packed ballroom in Washington last December and upbraided
a little-known regulator.
The Public Company Accounting Oversight Board, or PCAOB, oversees the big firms that sign off
on the books of America's listed companies. And the board was "moving too slowly," Schnurr said,
to address auditing failures that in recent years had shaken public confidence in those firms.
These were fighting words in the decorous auditing profession, and they hit their target. PCAOB
Chairman James Doty was among those attending the annual accounting-industry gala where Schnurr
spoke. And Schnurr was Doty's new supervisor.
"This is going to get ugly," Doty said to a colleague afterward.
In his new SEC job, Schnurr now had direct authority over the PCAOB a regulator that just
a few years earlier had derailed his C-suite ambitions at Deloitte & Touche. As deputy managing
partner at the world's largest accounting firm, Schnurr had commanded an army of auditors until
a string of damning PCAOB critiques of Deloitte's audits led to his demotion.
Then, in August 2014, SEC Chair Mary Jo White named Schnurr to his SEC post. It was a remarkable
instance of Washington's "revolving door" for professionals moving between government and industry
[sic] jobs.
Schnurr's speech was part of a yearlong campaign to oust Doty and thwart his efforts to
implement rules that would increase auditors' accountability to investors and their independence
from the companies they audit.
Deloitte, Ernst & Young, PricewaterhouseCoopers and KPMG audit companies that account for 98
percent of the value of U.S. stock markets. During the crisis, nine major financial institutions
collapsed or were rescued by the government within months of receiving clean bills of health from
one of the Big Four. While Schnurr was deputy managing partner at Deloitte, the firm signed off
on the books of Bear Stearns, Washington Mutual and Fannie Mae. Each went bust soon after, costing
investors over $115 billion in losses.
Doty's efforts have floundered, in large part because Schnurr's office has used its oversight
powers to block, weaken and delay them, according to a dozen current and former SEC and PCAOB
officials. Schnurr's staff has also campaigned to have Doty removed from office, these people
said.
Doty's term ended on Oct. 24. He continues to serve as PCAOB chairman day-to-day, waiting for
the SEC to decide whether or not to reappoint him.
The standoff is a test of who holds sway with regulators in Washington investors large and
small who seek better disclosure of what really goes on inside companies, or the financial-services
establishment that's supposed to serve those investors.
Why, one might almost conclude that the accounting "industry" exists to enable
accounting control fraud, rather than to prevent it - especially given the limitations that Perelman
points out. Although, to be fair, perhaps fraud is what "business rationality" is all about these
days.
* * *
So, from Perelman, we learn that accounting has severe limitations that make it unsuitable as
a basis for business rationality. Moreover, it's not suitable (in its current form, at least) for
making decisions - any decision - about long-lived, fixed capital allocation - and isn't capitalism
supposed to be all about that? And finally, if we ask what accounting is good for, we find
that it's certainly useful for enabling fraud. It's very difficult to know how deep the rot goes.
Richard Parker coined the word "neglectorate" to describe the public's alienation from the current
dysfunctional political system. Now that economists have, for the most part relegated John Maynard
Keynes to the dustbin of history, the term Dickenysian seems to be appropriate for the present conditions,
which are becoming increasingly similar to Charles Dickens' portrayal of the world he lived in. The
power of the bond market in imposing its will on supposedly independent states, suggests that bondage
may be appropriate for expressing the power of capital.
Finally, we could describe the current economic system as Crapitalism, which treats ordinary people
as crap.
"... But if the Macri administration is a throwback to the neoliberal era of Menem, it is important to remember that the current historical context is very different. Back in the 1990s, the fall of the Berlin Wall and the collapse of the Soviet Union gave the neoliberal policies of the infamous Washington Consensus a status of unquestionable truth. Supposedly, ideology had vanished and history had come to an end. No alternative was politically possible. Since then, the 2008 global Great Recession has shown the world the perils of unfettered capitalism, and even if the "Keynesian moment" was brief and austerity policies have reasserted themselves, at least it is widely understood that the "free market" is no solution for the problems of development in a globalized economy. ..."
"... the phrase "Garbage in, Garbage out" sort of sums up the problem, I think. throughout the neoliberal world, similar events have transpired, supported importantly by a tame press. As well, if the objective of neoliberal policies is to roll back social safety nets and restore corporate or oligarchic control, then austerity like Mr. Dayan predicts has been a success. ..."
"... It is clearly not easy to dislodge the vultures, once their nests are well fortified, and the often bitter process can easily lead to the rise of an Argentine version of (God forbid) Donald Trump. ..."
"... If you're looking for an outright rejection of neoliberalism, you needn't look farther than Argentina in 2001. The people filled the streets shouting "Get Rid of Them All (leaders)" until the leading elite brought forth a leader (Nιstor Kirchner) who finally got the message and reversed the Washington consensus. ..."
"... Kirchner, incidentally, had previously been a willing part of Menem's neoliberal policies in the 90s, so that just goes to show that it's not so important whom one elects, as it is the power of popular movements to get said person to do the right thing. ..."
"... Geopolitically too, the new administration seems quite happy to be a nice, well behaved member of the neoliberal club http://www.bbc.co.uk/news/uk-politics-34914413 and promises to not bump into the furniture or scoff too many of the hors d'oeuvres. If it is content to accept crumbs from the table, crumbs is what it - and the lucky people of Argentina - will get. ..."
"... Wikileaks reported that Macri went to the US embassy at least 5 times to seek support in winning the presidency. Now, scant days after the inauguration he has cancelled the Argentine memorandum of understanding with Iran in regards to Israel's allegations that Iran was behind two bombings against Israeli/Jewish targets in Argentina in the 90s. Very possibly quid pro quo. ..."
"... It seems to me that it is increasingly difficult for Leftist, i.e., non-neoliberal economies to survive, nevermind thrive, in the world today. As the neoliberal forces have coalesced globally they are now in position to punish any nation that refuses to follow the program. ..."
"... Until the U.S. reforms itself - or maybe Western Europe - it appears small Leftist nations will have to thread a needle just to survive. ..."
"... I would like to read the author's comments on the above in more detail. I cannot figure out why on earth the Roussef admin in brazil is doing what it is doing. They've destroyed their base who won't trust them again for a decade. Will lula ride to the rescue again? I'm not sure he can pull off the same act twice. ..."
"... What I'd always concede is that, for leftist political parties, this job will always be harder. No-one really expects neoliberal or corporatist state parties to be anything other than on the take, it simply goes with the territory. Voters are pretty cynical there, and rightly so, but the cynicism is realistic. The deal is, you put up with our pilfering in return for competent administration. It's more-or-less latter-day versions of "Say what you like about Mussolini, at least he made the trains run on time". ..."
"... The left, conversely, is expected to be both honest and competent. Rightly so, but harder. ..."
"... Oh great, another TBTF banker running a central bank. That should work to someone's advantage If they are telegraphing a devaluation, what does that mean for the FX market? Seems to me a move that large can make some fortunes if one had insider info. Here's a thought, wealthy right wing argentinians go to the us dollar in a similar way to us corps leaving money offshore, to create the impression of weakness, which justifies devaluation of the peso and deregulation, in swoop the buzzards (sorry, vulture is already taken in this case) to buy up pesos at 15 for a buck, plus no repatriations! ..."
"... The devaluation of the peso is a bit more tricky than this, since every political party pushed devaluation, just in different forms. The Kirchner's policy was a slow series of micro-devaluations that kept the peso steadily decreasing against the dollar to keep exports competitive. The bulwark against speculation was (sloppily applied) capital controls that did halt a lot of capital flight, but not all. ..."
"... The fact is very few people here save in pesos, they all save in dollars or property, mainly because there is no faith in the peso. A mega devaluation does not increase faith in the currency, but it does, as you say, work out dandy for speculators. ..."
"... Foreign "investment" (direct or via compradors) and foreign military occupation (direct or by proxy) are two sides of the same coin- of conquest, dominion, oppression and exploitation. Any semblance of, or aspiration to, autonomy, is limited by the perceived needs of imperial "manifest destiny", and thus must be "de"stabilized, then "re"stabilized as a heteronomy, that "better" serves the insatiable needs of the "masters of mankind" as far as "right" v. "left", from my pov comes down to the politics of "concentration" v. "distribution" and what defines "surplus" in the context of basic needs ..."
"... A crude parallel is the "shellacking" of Obama in 2010. Sure there were people that voted for the repubs, but it was by no means out of enthusiastic support for their policies. Likewise here, the enthusiasm was somewhat muted. ..."
By Matias Vernego, Associate Professor, Department of Economics, Bucknell University, and
author of the blog Naked Keynesianism.
Cross-posted from
Triple Crisis.
The election of businessman Mauricio Macri to the presidency in Argentina signals a rightward
turn in the country and, perhaps, in South America more generally. Macri, the candidate of the right-wing
Compromiso para el cambio (Commitment to Change) party, defeated Buenos Aires province governor
Daniel Scioli (the Peronist party candidate) in November's runoff election, by less than 3% of the
vote.
... ... ...
But if the Macri administration is a throwback to the neoliberal era of Menem, it is important
to remember that the current historical context is very different. Back in the 1990s, the fall of
the Berlin Wall and the collapse of the Soviet Union gave the neoliberal policies of the infamous
Washington Consensus a status of unquestionable truth. Supposedly, ideology had vanished and history
had come to an end. No alternative was politically possible. Since then, the 2008 global Great Recession
has shown the world the perils of unfettered capitalism, and even if the "Keynesian moment" was brief
and austerity policies have reasserted themselves, at least it is widely understood that the "free
market" is no solution for the problems of development in a globalized economy.
...The new government does not control congress, and the election was close, signaling
a divided country. In short, society is more organized and better prepared to face the onslaught
of neoliberal policies this time around.
First, a Succinct and well organized piece. A pleasure to read.
Thank you, David Dayan.
Sad but familiar pattern of political events. The key piece of the puzzle not yet known is
if the widespread failure of austerity policies to produce the claimed results will ever trigger
an effective rejection by the voters, and if so, how long will it take? It hasn't happened yet.
A stronger working class is fine, but what is the state of sources of information in Argentina?
in a democratic system, the phrase "Garbage in, Garbage out" sort of sums up the problem,
I think. throughout the neoliberal world, similar events have transpired, supported importantly
by a tame press. As well, if the objective of neoliberal policies is to roll back social safety
nets and restore corporate or oligarchic control, then austerity like Mr. Dayan predicts has been
a success.
It is clearly not easy to dislodge the vultures, once their nests are well fortified, and
the often bitter process can easily lead to the rise of an Argentine version of (God forbid) Donald
Trump. Been there, done that.
If you're looking for an outright rejection of neoliberalism, you needn't look farther
than Argentina in 2001. The people filled the streets shouting "Get Rid of Them All (leaders)"
until the leading elite brought forth a leader (Nιstor Kirchner) who finally got the message and
reversed the Washington consensus.
Kirchner, incidentally, had previously been a willing part of Menem's neoliberal policies
in the 90s, so that just goes to show that it's not so important whom one elects, as it is the
power of popular movements to get said person to do the right thing.
Geopolitically too, the new administration seems quite happy to be a nice, well behaved
member of the neoliberal club
http://www.bbc.co.uk/news/uk-politics-34914413
and promises to not bump into the furniture or scoff too many of the hors d'oeuvres. If it is
content to accept crumbs from the table, crumbs is what it - and the lucky people of Argentina
- will get.
I don't suppose Jim Haygood will be mourning the political exit of the Black Widow, but I,
in my not so humble opinion, think this new lot of ex-financiers will be worse.
In addition to the Venezuela volte-face and a different tune on the Malvinas/Falklands issue,
there is a more substantive move in the works by the new regime.
Wikileaks reported that Macri went to the US embassy at least 5 times to seek support in
winning the presidency. Now, scant days after the inauguration he has cancelled the Argentine
memorandum of understanding with Iran in regards to Israel's allegations that Iran was behind
two bombings against Israeli/Jewish targets in Argentina in the 90s. Very possibly quid pro quo.
It seems to me that it is increasingly difficult for Leftist, i.e., non-neoliberal economies
to survive, nevermind thrive, in the world today. As the neoliberal forces have coalesced globally
they are now in position to punish any nation that refuses to follow the program.
Until the U.S. reforms itself - or maybe Western Europe - it appears small Leftist nations
will have to thread a needle just to survive. Maybe China will emerge, especially possible
as the failure of America's global leadership is underscored by political instability, global
warming, florid wealth disparities, and increasing radicalization.
Erm, I can't see The Middle Kingdom coming to anyone's rescue but their own. That will be good
only for those countries whose welfare coincides with China's. Which would be, ? Pro'ly not
Argentina?
The last government, in addition to selling huge quantities of grain to China, also conducted
2 currency swaps with Beijing all to cries of "dealing with communists!" and "selling out our
patrimony to the enemies!" from the opposition. Now that the opposition is in power, they announced
a 3rd currency swap two days after coming into office.
In 2013, China South Railway(CSR) won a 1-billion U.S. dollar contract which provides 709
carriages to renew [Argentina's] commuter system.
By the end of July 2015, all the 709 carriages had been shipped to Argentina.
A large part of Argentina's national railway system has been in disrepair or underdeveloped.
Aging infrastructure has also led to a number of accidents in the country in recent years.
China of course is looking after its own mercantilist interests. But Argentina, after allowing
its British-built railroads to decay into shambles by a century of neglect and bizarro-world service
pricing, will benefit from upgraded rail infrastructure.
I got to ride the antiquated 99-year-old Belgian-built coaches, with manually-latched wooden
doors, on Line A of the Buenos Aires subte, before they were removed from service in 2013.
Photo:
The railroad system was built by the British, nationalised by Perσn in his first term, and
then slowly privatised under successive dictatorships and their "democratic" front men. The coup
de grace was Menem in the 90s but the whole system was dead well before then, ditched in favour
of the more "advanced" US interstate system.
One of the last moves of the outgoing Kirchner government was to renationalise the system.
The new Chinese cars are a delight (and the old A line was indeed fun, but moved at a snail's
pace). Argentina does not yet have the native industry to produce trains, but that was definitely
a goal, that now looks farther away.
And just for comparison's sake, the top 2 Argentine presedencies in terms of infrastructure
built were Perσn's 1&2 terms, and the Kirchners. Meanwhile, the record for least km of subway
built per year in Buenos Aires history belongs to Marucio Macri. All whilst going deeply into
debt.
Fiscal responsibility comrades: it's not a neoliberal priority.
"And if it is any consolation, at least the adjustment will be done by a right-wing party,
in contrast to Brazil, where the same program, essentially, is being pushed by the Workers' Party;
and yet the right-wing forces are also trying to bring the left of center government of Dilma
Rousseff down; more on that on another post]."
I would like to read the author's comments on the above in more detail. I cannot figure
out why on earth the Roussef admin in brazil is doing what it is doing. They've destroyed their
base who won't trust them again for a decade. Will lula ride to the rescue again? I'm not sure
he can pull off the same act twice.
Unfortunately nowhere is it written that the left is automatically able to walk (adopt and
implement progressive policies aiming to improve equality not just on social issues but also economic
and financial ones) and chew gum (govern competently and effectively) at the same time.
While Roussef's (and Christina Fernandez's) hearts may have been in the right place, for Roussef
not being whiter-than-white on campaign funding and employing accountants who would not only find
out any wrong-doing but tell the Workers' Party leadership something didn't smell right - and
also what seemed pretty blatant gerrymandering via the budget - were avoidable own-goals.
What I'd always concede is that, for leftist political parties, this job will always be
harder. No-one really expects neoliberal or corporatist state parties to be anything other than
on the take, it simply goes with the territory. Voters are pretty cynical there, and rightly so,
but the cynicism is realistic. The deal is, you put up with our pilfering in return for competent
administration. It's more-or-less latter-day versions of "Say what you like about Mussolini, at
least he made the trains run on time".
The left, conversely, is expected to be both honest and competent. Rightly so, but harder.
Agreeing with what Clive said, I would also add a couple points:
1. Syriza. 'Nuff said.
2. Here in LatAm (and elsewhere) the leftist leadership has a dismal record of not understanding
economics. In the example at hand, the Kirchners 'swooped in to rescue' Argentina from the clutches
of neoliberalism. But said neoliberalism had been imposed by their own ostensibly leftist, 'populist'
Justicialist (Peronist) party under Menem (and before under Perσn himself). Nιstor Kirchner and
Cristina Fernαndez were completely on board with this because they didnt really pay too much attention
to econ policy, and privatising everything seemed like a nice liberal thing to do. Only once the
street pushed back against the Washington Consensus in 2001 did they see the potential in riding
the wave, and did a reasonably good job at it, but it's not like socialism was in their DNA from
the get-go.
With Dilma, I'd say it's the same thing. She is leftist in that she is pro-human rights, pro-equal
marriage, etc. But she does not have a really leftist economic understanding, so to her austerity
seems to fit right in with her other leftist beliefs just as it did with say Tony Blair or Bill
Clinton.
Oh great, another TBTF banker running a central bank. That should work to someone's advantage If
they are telegraphing a devaluation, what does that mean for the FX market? Seems to me a move
that large can make some fortunes if one had insider info. Here's a thought, wealthy right wing
argentinians go to the us dollar in a similar way to us corps leaving money offshore, to create
the impression of weakness, which justifies devaluation of the peso and deregulation, in swoop
the buzzards (sorry, vulture is already taken in this case) to buy up pesos at 15 for a buck,
plus no repatriations! It's just got win written all over it when you have a central banker
who's going to revalue the currency by selling off the commons in some form or another.
The devaluation of the peso is a bit more tricky than this, since every political party
pushed devaluation, just in different forms. The Kirchner's policy was a slow series of micro-devaluations
that kept the peso steadily decreasing against the dollar to keep exports competitive. The bulwark
against speculation was (sloppily applied) capital controls that did halt a lot of capital flight,
but not all.
In the election, both candidates campaigned on lifting the capital controls and 'floating'
the peso, with Macri's team saying it would lift all controls the day after the election. Didn't
happen. Incoming FinMin Prat Gay has now said they can't go 'free-market' just yet (i.e., release
ForEx restrictions and devalue the peso in one giant swoop), but the threat is hanging over the
economy like an executioner's knife. Last month after the election, prices shot up across the
board (up to 20% increases!) as merchants speculated on expectations. It was the highest inflation
recorded in over 20 years.
The fact is very few people here save in pesos, they all save in dollars or property, mainly
because there is no faith in the peso. A mega devaluation does not increase faith in the currency,
but it does, as you say, work out dandy for speculators.
Fifteen pesos for a buck is an 'informal' gray market that exists behind capital controls.
You can physically carry hundred-dollar bills into Argentina and exchange them at the ubiquitous
"compro oro" shops. But this trade can't be done from outside the country, in size.
Second issue is that a unified exchange rate might settle somewhere between 9 and 15 pesos,
since 15 pesos is an artificial 'dollar scarcity' value produced by capital controls. If the unified
exchange rate ends up at 13, speculators lose 13% in a hurry.
That's why speculators get paid to take risks. There is no obvious, guaranteed trade, equivalent
to picking up ten-dollar bills off the sidewalk.
The buzzards I refer to would actually be the insiders in the new gov who have info not available
to speculators as a whole, but I see your point that it's not as easy as it sounds in my pretty
tale
Foreign "investment" (direct or via compradors) and foreign military occupation (direct
or by proxy) are two sides of the same coin- of conquest, dominion, oppression and exploitation.
Any semblance of, or aspiration to, autonomy, is limited by the perceived needs of imperial "manifest
destiny", and thus must be "de"stabilized, then "re"stabilized as a heteronomy, that "better"
serves the insatiable needs of the "masters of mankind" as far as "right" v. "left", from my pov
comes down to the politics of "concentration" v. "distribution" and what defines "surplus" in
the context of basic needs
Excellent question, and one not answered in the article.
In the first round of voting Macri came in second place, but he had a close enough margin to
force a one-on-one runoff with the top voted candidate, Daniel Scioli, who was representing the
outgoing Kirchner government.
Macri and the far right have generally pulled about 20% of the population at most, but he made
an alliance with the two largest opposition parties (UCR and CC), who essentially sold their souls
just to ensure the Kirchner "successor" did not win. This put Macri over the top, giving him an
advantage of less than 2% enough to win the runoff.
Furthermore, the Kirchnerist candidate was selected from the rightwing of the party, and ran
to the right. Macri meanwhile, well aware of the precariousness of his alliance, actually ran
to the left - reversing his previous stances and saying he would not privatise anything or eliminate
social spending. By the time of the final election, the two candidates were practically indistinguishable.
A crude parallel is the "shellacking" of Obama in 2010. Sure there were people that voted
for the repubs, but it was by no means out of enthusiastic support for their policies. Likewise
here, the enthusiasm was somewhat muted.
"... Undoing the Demos: Neoliberalism's Stealth Revolution ..."
"... market values to all institutions and social actors ..."
"... Harperism: How Stephen Harper and his thank tank colleagues have transformed Canada ..."
"... Political Theory, ..."
"... Dr. Michael Welton is a professor at the University of Athabasca. He is the author of Designing the Just Learning Society: a Critical Inquiry. ..."
Deciphering the meaning of Neo-liberalism as a historical force and societal form requires the energies
and know-how of a sagacious sleuth like Hercule Poirot. Wendy Brown, a philosophy professor at UCLA
(Berkeley) and author of Undoing
the Demos: Neoliberalism's Stealth Revolution, has a Poirot intellectual sensibility and
acuity that sees what most of us cannot.
Those of us who have written on neo-conservative politics
and neo-liberalism as an economic form have illuminated many dimensions of "something new" that has
emerged out of the collapse of welfare state liberal democracy in the West over the last five decades.
But putting all the pieces of this intricate puzzle together and detecting not only particular
patterns but also the logic underlying neo-liberalism is a complex task.
What is the connection between the US Empire's contempt for law and truth-telling and neo-liberalism?
And how is it that citizens can be so passive in the face of evident government prevarication,
endless spinning of false narratives, the evisceration of democratic morality and countless corporate
and government scandals?
Most of us know that neo-liberalism as an economic form repudiates Keynesian welfare state economics
and was propounded by ideologues like Milton Friedman at the University of Chicago and in an earlier
day, by the dubious intellectual propagandist Friedrich von Hayek.
In popular usage, neo-liberalism conjures up a cluster of ideas adumbrated by Brown: a radically
free market, maximized competition and free trade achieved through economic de-regulation, elimination
of tariffs, a range of monetary and social policies favourable to business and indifferent toward
poverty, social deracination, cultural decimation and long-term resource depletion and environmental
destruction.
Something new and darker is at stake
But something new and darker seems to be at stake. The crux of Brown's sophisticated argument
is that the left fails to see the "political rationality that both organizes these policies
and reaches beyond the market" ("Neo-liberalism and the end of liberal democracy" [2003]). The left
analyses do not capture the "neo" of neo-liberalism because they "obscure the specifically political
register of neo-liberalism in the First World, that is, its powerful erosion of liberal democratic
institutions and practices in places like the US."
In other words, neo-liberalism agents systematically aim to radically de-democratize their societies.
The supreme triumph of corporate power in the world requires that liberal democracy be undermined.
This means that political autonomy is jettisoned. Formal rights, private property and voting are
retained, but civil liberties are re-cast as useful only for the enjoyment of private autonomy.
Social problems are de-politicized and converted into therapeutic, individualistic solutions (mostly
through consuming a special commodity). The political rationality of neo-liberalism interpellates
the governed self of the citizenry. Separated from the collectivity, this self is then absorbed into
a world of choice and need-satisfaction through consumption that is mistaken for freedom.
Aware that the mere restoration of some ragtag social welfare state spiced with a pinch of climate
change rhetoric is a dangerous delusion, Brown slices through the bramble bush of esoteric terminology
to enable us to see that "neo-liberalism carries a social analysis which, when deployed as a form
of governmentality, reaches from the soul of the citizen-subject to education policy to practices
of empire." Neo-liberal rationality "involves extending and disseminating market values to all
institutions and social actors, even as the market itself remains a distinctive player."
Neo-liberalism ruthlessly sets out to subvert democracy
Good god! This guy moved stealthily and incrementally according to a "master plan": to dismantle
Canadian democracy and free the society for total corporate domination without citizen recourse.
It was systematic! It was devilish! He did it behind closed doors and in the twilight under our noses!
Voter ignorance permits these bastards to blast the world back into the medieval era of serfdom and
anti-enlightenment beliefs and degrading practices.
This intention to subvert liberal democracy has not been fully grasped by those on the left. That's
Brown's wake-up call. And it is a salient one. It may provide us clues to understanding puzzling
elements of the contemporary world such as lying without consequences, total absence of moral principle
underpinning actions, abject inconsistency, utter hard-heartedness towards the vulnerable and contempt
for democratic deliberation and international diplomacy.
Specific characteristics of the neo-liberal political rationality
To help us sort these things out, Brown identifies the specific characteristics of this rationality.
Plunging in, Brown first points out that neo-liberal rationality configures human beings as homo
oeconomicus. All dimensions of human life are cast in terms of a market rationality. Actions
and policies are reduced to the bare question of profitability and the social production of "rational
entrepreneurial action." Our schools are re-figured to pump out little brown-shirted entrepreneurs
who know only calculation and competition.
Second, Brown states that neo-liberalism pedagogics intends to develop, disseminate, and institutionalize
such a rationality. "Far from flourishing when left alone," Brown asserts, "the economy must be directed,
buttressed, and protected by law and policy as well as by the dissemination of social norms designed
to facilitate competition, free trade, and rational economic action on the part of every member and
institution of society."
Neo-liberals only want to get the state out of providing for the security and well-being of its
citizens. They use the state apparatus to enable corporations to serve only their profit-making without
fear of legal regulation or moral demands. This means, then, that the market organizes and regulates
the state and society. Therefore:
(a) By openly responding to the needs of the market (through immigration policy or monetary and
fiscal policy), the state is released from the burden of a legitimation crisis (European critical
theorists like Claus Offe and Jurgen Habermas had raised this concern in the 1970s). The new form
of legitimation is simply economic success (it is also, I might add, the new, post-liberal democratic
morality). The old norms of crime and morality are expunged from the cultural ethos of neo-liberalism.
(b) Under neo-liberal conditions, the state itself must think and behave like a market actor.
The languages of cost-benefit analysis and calculation sweep in and consume public service and governmental
practices. Under the Harper dictatorship's thumb, gags were stuffed in the public service mouth.
(c) The health and growth of the economy is the "basis of state legitimacy both because the state
is forthrightly responsible for the health of the economy and because of the economic rationality
to which state practices have been submitted." The watchword of neo-liberalism is: "It's the economy,
stupid."
The third characteristic, then, of this depraved neo-liberal rationality (which wrenches itself
free of the constraints of the old liberal democratic paradigm) has to do with the "extension of
economic rationality to formerly non-economic domains and institutions extends to individual conduct,
or more precisely, prescribes citizen-subject conduct in a neo-liberal order." Famously, Habermas
termed this the "colonization of the lifeworld."
There is something disturbingly monstrous now before us. The classical liberal thinker Adam Smith
set out the necessity of tension between individual moral and economic actions. This crucial distinction
collapses, Brown maintains, because neo-liberalism has figured us as rational, calculating machines.
Thus, to be "morally autonomous" means that we take care of our own needs and fund our own self-projects.
Pedagogics (in schools and everyday life) orients its students to consider the costs, benefits,
and consequences of individual action. But this "responsibility for the self" gets carried to new
heights as support for the vulnerable and needy is withdrawn. They are on their own. Didn't Thatcher
say: "There is no such thing as society. There are individual men and women, and there are families"?
Grim news for the last defenders of deliberative democracy
For diehard defenders of active citizenship and liberal democracy, Brown's analysis is grim news.
Political citizenship is radically reduced within the neo-liberal frame to an "unprecedented degree
of passivity and political complacency."
In "American nightmare: neo-liberalism, neo-conservatism, and de-democratization," Political
Theory, 34 (6), December 2006)," Brown bemoans the "hollowing out of a democratic political
culture and the production of the undemocratic citizen. This is the citizen who loves and wants neither
freedom nor equality, even if of a liberal sort; the citizen who expects neither truth nor accountability
in governance and state action; the citizen who is not distressed by exorbitant concentrations of
political and economic power, routine abrogation of the rule of law, or distinctly undemocratic formulations
of national purpose at home and abroad." Bravo Ms. Brown!
Brown's most innovative analysis is the way she links neo-conservative religious thought and neo-liberal
economic and political rationality. She addresses the evident contradiction. "How does a project
that empties the world of meaning, that cheapens and deracinates life and openly exploits desire,
intersect with one centred on fixing and enforcing meanings, conserving certain ways of life, and
repressing and regulating desire?"
Neo-liberal political rationality and neo-conservative fundamentalist Christianity may diverge
on the level of ideas. But American Christianity (in its fundamentalist form) and neo-liberal rationality,
Brown contends, converge in the domain of political subjectivity. American fundamentalism contours
the spiritual sensibility of its adherents to submit to Divine Authority and a declarative form of
truth.
She states: "The combination of submissiveness toward a declared truth, legitimate inequality,
and fealty that seeps from religious and political rationality transforms the conditions of legitimacy
for political power; it produces subjects whose submission toward authority and loyalty are constitutive
of the theological configuration of state power sketched in Schmitt's juristic thought."
In post 9/11 America panicked and fearful citizens easily fall prey-so it sadly seems-to sacralising
the existing Neo-liberal regime. The founding myth of America as New Israel tips fundamentalists
(and others, too) toward fusing the US's malevolent actions in the world with America as instrument
of God's eternal purposes-"holy violence" to usher in the New Millennial Order.
Thus, apolitical preferences rule the day and citizens consume and idolize their families. Political
participation is not necessary; and political scientists write articles about "voter ignorance" and
weep. Critics of Habermas chide him for harbouring the illusion that voters know enough to deliberate
with each other. But this submission to the Natural Order (now God's order) of neo-liberal capitalism
is to bow down before the Golden Calf.
We appear to have entered Weber's "polar night of icy darkness" without morality, faith, heroism
and meaning. But for Brown both Weber and Marx's analyses are too teleological. Neither captures
the "discursive and practical integration" of formerly differentiated moral, economic and political
rationalities.
This perspective certainly is controversial and debateable stuff. But there is no denying that
neo-liberalism erodes "oppositional political, moral or subjective claims located outside capitalist
rationality but inside liberal democratic society, that is, the erosion of institutions, resources,
and values organized by non-market rationalities in democracies."
There is much at stake: the Left from Marx's day to ours assumed that liberal democratic societies
at least contained the formal principles of equality and freedom. This ethical gap between the norms
and social reality could elicit oppositional action to close the division and permit a form of "immanent
critique." Now Brown suggests provocatively, "Liberal democracy cannot be submitted to neo-liberal
political governmentality and survive." Indeed, "liberal democracy is going under in the present
moment, even as the flag of American 'democracy' is being placed everywhere it finds or creates soft
ground."
The Left humanist project for post-liberal democracy times
Thus, the Left Humanist movement world-wide confronts-if Brown's argument holds-a neo-liberal
rationality that in the post 9/11 period uses the idiom of liberal democracy while undermining it
in practice. The infamous cry from Paul Bremer in Iraq that it was "open for business" clearly signalled
that democratic institutions were secondary to "privatizing large portions of the economy and outsourcing
the business of policing a society in rubble, chaos, and terror occasioned by the combination of
organizing military skirmishes and armed local groups."
The only way we might fathom the post 9/11 American world of governmental deceit and a raw market
approach to political problem solving is to assume that moral principle has been banished because
the only criteria for action is whether the ends of success and profitability have been achieved.
That's all. That's it. And since morality is the foundation of legal systems, adhering to law is
abandoned as well.
There is, then, plenty of evidence for the argument of the assault on democracy. Civil liberties
have been undermined in the USA in the Homeland Security Act (and in Canada under the Harper regime),
aggressive imperial wars ventured into, the welfare state dismantled and progressive tax schemes
abolished and public education defunded.
Brown is reluctant to name this miserable concoction fascism (or neo-fascism). "Together these
phenomena suggest a transformation of American liberal democracy into a political and societal form
for which we do not yet have a name, a form organized by a combination of neo-liberal governmentality
and imperial world politics, contoured by the short run by conditions of global economics and global
security crisis."
Nonetheless, regardless of how we name this new world, the conditions we find ourselves inhabiting
at the moment must acknowledge that the "substance of many of the significant features of constitutional
and representative democracy have been gutted, jettisoned, or end-run, even as they continue to be
promulgated ideologically, serving as a foil and shield for their undoing and doing of death elsewhere."
Bitterly, Brown admits that this unprecedented nature of our time is that "basic principles and
institutions of democracy are becoming anything other than ideological shells for their opposite
as well as the extent to which these principles and institutions are being abandoned even as values
by large parts of the American people."
Thus, in order to avoid descent into acute melancholia on the part of the Left, Brown urges us
to reject the idea that we are in the "throes of a right-wing or conservative positioning with liberal
democracy but rather at the threshold of a different political formation, one that conducts and legitimizes
itself on different grounds from liberal democracy even as it does not immediately divest itself
of the name."
She maintains strongly that the Left must face the implications of losing democracy. We ought
not to run around in a frenzy raging into the polar night. We will have to dig in for the long haul
and offer an intelligent left counter-vision to the neo-liberal political and economic formation.
This will be an integral project of the reconstitution of the global left in post-liberal democracy
times.
The soft neoliberalism (or The Third Way) promoted by Clinton and Blair now is replaced with a splash
of far right nationalism. the level of anger in the bottom 99% and a refusal to accept the lies and
propaganda by the top 1% created a crisis of legitimacy for neoliberal elite. Moreover, right years
of king of "bait and switch" Obama with his typical for neoliberals unconditional love for financial
elites has revealed that change can be delivered only through radical means...
Notable quotes:
"... Of course in the age of inverted reality, spin and obfuscation, the true nature of [neo]iberals is quite the reverse. Just like the fabians they seek to divert attention from their real goals by describing themselves as mirror opposites. ..."
"... The [neo]liberal elite is nothing of the sort, they seek to control, manipulate and suppress everything which doesn't fit their hidden purpose, which is to promote the flat earth globalisation of the debt pyramid on behalf of the banking cartel and the likes of the Rothschild's. ..."
"... They are despicable creatures, full to the brim with breath-taking hypocrisy, happy to claim faux indignation over widening inequality and falling living standards while they promote the pyramid scheme of debts which causes it. They may dream of a world government with socialism for the masses and largesse for the elites, but as sure as the sun rises in the east, such concentration of power, wielded by those least suitable to hold it, would create an authoritarian tyranny like seen before. ..."
"... Essentially, Third Way liberalism as practised by Clinton and Blair, but even more so by those who followed them (Clinton and Blair were, let's not forget, populists of a sort), is predicated on the belief that you can fashion a winning mandate to govern by appealing to a consensus among middle class professionals, the liberal rich, and what they saw as a new, unideological class of 21st century workers - the socially liberal, politically apathetic, precariously situated masses who hover somewhere between traditional working class and educated middle. ..."
"... They did this by appealing to issues of social identity while reinforcing the economics of the right-wing neoliberal ushered in by Thatcher and Reagan. They were, at the same time, losing working class votes - but their analysis of the economics told them that the (in a Marxist sense) working class was an endangered species. ..."
"... 2008 exploded this fiction but its architects remain wedded to the cause. They personally enriched themselves by opening-up traditionally popular parties to the donations and interests of corporate capitalism. Look beyond Blair and the Clintons and you will see hundreds of centre-left politicians growing fat on an endless stream of corporate money: Cory Booker, Chuck Schumer, DWS, Howard Dean (in the US), Ben Bradshaw, Chris Byrne, Alastair Campbell, Jack Straw (in the UK) ..."
"... Deregulated capitalism tends to monopolies and the rise of a rentier class epitomised on Wall Street and property speculators like Donald Trump. ..."
"... Global capitalism pits workers against workers in an endless spiral of wage deflation and this fosters divisions between those whose class interests are, in fact, the same. The alienation that is an intimate part of capitalist production ..."
"... Marx also made a distinctive between productive and fictitious capital - share prices, derivatives and other financial instruments, arbitrage and all the other heinous arsenal of second-order exploitation. Neoliberalism has delivered productive capital into the arms of fictitious capital and ushered us into a world governed by nobody so much as orchestrated according to the graph-lines of the global stock markets. It has turned the spectacle from social relations mediates by images into the beating heart of how, where and why wealth moves the way that it does. The unreality has seeped into every aspect of lived experience. ..."
"... I am less despondent then I was under Obama and his smooth delivery of a hope and change always deferred. ..."
"... Or Hillary Clinton and her revolution of upper-class women with their own specific class interests. There is organising taking place right now and making demands that this system will not satisfy - because it is designed to do the exact opposite. ..."
"... I would rather speak with an alt-right troll than a liberal because one is searching for answers in the wrong place where the other glibly renders apologies for the system from which they seek to profit at the expense of those to whom they offer nothing but false sympathy. ..."
"... There is a mobilisation of anger and a refusal to accept the fictions spun by the ruling class that can potentially be harnessed for permanent change - and, moreover, 8 years of Obama and his pathological love for financial elites has revealed that radical change can be delivered only through radical means. ..."
"... But as others have said really we mean neoliberalism, not liberalism. Liberalism and capitalism are not the same thing and cant be used interchangeably, liberalism is a set of beliefs and capitalism is a set of practices which are sometimes at odds with one another. On the other hand, neoliberalism as a set of beliefs explicitly accepts the hegemony of capital and the expansion of the market economy into all areas of society and life. ..."
"... the reformist and incrementalist view of a progressive social democracy that balances state and market for the betterment of all is con. ..."
"... I don't think that Trump and Brexit mark an epochal shift; I think they are signs of disintegration. The more significant (though still not epochal!) moment was the 2008 financial crisis - and the complete failure of the political elites of Europe and America to address its fallout. This, by the way, was also far from the unforeseeable calamity that it was characterised as being in many sections of the media. Many economists and political analysts had discussed deregulation and unsustainable debt in terms of future crises; it wasn't prophesy, but a basic understanding of how unrestricted market capitalism (especially when reliant on the vicissitudes of shares/bonds/derivatives) operates. ..."
"... More broadly, I agree with you - history is not some untroubled march of the working class to freedom (alas!) It is contingent, messy and unexpected. We have agency - and we have to use it (another thing I believe has been reignited in the last 8 years). One of many ironies of the present situation is that neoliberal politicians believed that the educated precariat they were helping to create would be unideological, politically apathetic consumers - and yet it is the young who are returning the repressed in the form of unrest, economic demands, and the re-introduction of class into political discourse. ..."
"... Okay though, back to reality! That, I concede, is a very American and European perspective that does not take into account the global developments in Asia, Africa or Latin America. I actually lived in China for a while as a young man, and it struck me at the time that the society offered a possible, if bleak, template for the future - a technocratic, one-party state in which people trusted them to deliver the right decisions through a central bureaucracy but with consumer freedoms sufficient to forestall unrest. This is, perhaps, an alternative to the dissent and potentially unrest I have described - and what makes the latter imperative...? ..."
"... Oh, and what you wrote about waste is very interesting. I certainly agree that it, "efficiency" (usually code for cuts and/or transfer from public to private stewardship), are over-fetishised. In fact, ridiculously so. The waste of most governments is staggering and yet they attack only certain areas. What America squanders on its military is the most obvious of examples - or its increasingly repressive police. ..."
"... The point with Trump - and Brexit too - is not so much what it means to the man himself (or Brexit-profiteers like Boris Johnson) but how his victory gets brandished to confer legitimacy and political cover for a newly emboldened syndicate of zealously right-wing politicians and the corporate interests they represent (especially in America, where the majority of Congressional Republicans are little better than local union bosses who have been installed by the Mafia to carry their water and hold their places to exclude anyone else attaining any uncorrupted power or autonomous control). ..."
"... We are seeing this happen right now as Trump fashions his administration - there are a lot of lobbyists, reactionary financiers, neoconservative mavens, embittered figures from the intelligence community, and evangelical culture warriors suddenly footloose and demob happy after 8 years of Barack Obama and his patented brand of Fidel-loving, radical Chicago organising, spectacularly lukewarm but yet (according to Fox) apocalyptically awful, anti-American, Socialist Revolution. ..."
"... Much of the above will be familiar from Bush files - a man who was seldom happier than when sunk into his Lay-Z-Boy learning how to eat pretzels safely from Barney, his Scottish Terrier. His main role was to show up when required and gurn for the cameras, narrow his peepers and regurgitate what the teleprompter feeds him, before signing the executive orders dreamt up by his dream-team of vampyric, far-right champions of such American glories as the Vietnam War, Watergate, Iran/Contra, and more Latin American coup d'etats than even Henry Kissinger could shake his razor-studded cudgel at. ..."
"... The fact is that Trump cares about victory and basking in the light of his own self-proclaimed greatness and now he's won. I doubt he cares nearly as much about mastering the levers of government or pursuing some overarching vision as he does about preening himself in his new role as the Winner of the World's Greatest Ever Reality TV Show. He may have thrown red meat to the crowds with the gun-toting, abortion-hating campaign rhetoric, but that is the base for every contemporary Republican's bill of fare. I don't believe he gives a tinker's cuss about those issues or any of the other poisons that constitute their arsenal of cultural pesticides. ..."
"... Like all rich people, he wants to pay as little tax as possible without breaking the law (or at least breaking it outrageously enough to attract the notice of the perennially over-worked, under-resourced IRS). ..."
"... And finally, like most rich people, he refuses to accept that governments can or should regulate transactions or industries in ways that may even slightly inhibit their unbound, irrepressible pursuit of their self-interests and unquenchable desire for more, more and yet again more. ..."
"... These basic right-wing tenets, of course, all easily translate into concrete policy - that's what the Republicans do best. ..."
"... But beyond that, there is the small matter of the world's most highly evolved and comprehensive system of state surveillance and repression - a confluence of agencies, technologies, paranoia and class war that was embraced and embellished by Obama from the moment he brought his glacial approach to change to the highest office in the land indeed, he showed that he was quite comfortable signing off on historic erosions of constitutional freedoms provided it was endorsed by his ever-responsible friends in Langley and The Pentagon. ..."
"... So while Trump and his administration may in many ways resemble the familiar class warriors of Republican presidencies past, albeit with added evangelical vim, viciousness and vapidity courtesy of Mike Pence, let's not forget that his frequently displayed authoritarianism will have ample opportunity to be both stress-tested and to revenge itself on a plethora of opponents. ..."
"... The point, really, is to move beyond the office of the President, which is always absurdly fetishised in American politics to the detriment of scrutiny that should be directed elsewhere - at his team, his cabinet, his appointments, and his place in the web of Congressional Republicans, lobbyists and corporate money the nexus of interests that really dictates policies and determined which political battles get fought aggressively, which cast aside. ..."
"... People will not see a new dawn, but the delirious rush to expand those chaotic, inhumane, amoral, and utterly unaccountable market forces that have already seeped far too deep into the already grotty political system. Trump is only a piece of this large and ugly tapestry a figurehead for an army of cultural and social vandals serving alongside economic thieves and assassins. These are, moreover, the experts in how to instrumentalise economic inequality to serve the very politicians responsible for fostering the inequality in the first place and those most wedded to beliefs capable only of making matters worse for all but themselves and their donor-owners. ..."
"... But let's not be lulled by the familiarity of parts of this story. Familiar from Reagan and Bush Jnr, as well as Clinton and Obama (albeit with a more fulgent presentation and the skilled performance of sympathy to sugar the pill). ..."
"... [Neo]Liberalism is an ideology, it has many variations and even definitions for people. Arrogance, superiority, disdain, refusal to engage etc. A moral certainty more in line with doctrinal religion. ..."
"... The first question to ask is why these right wing commentators are attacking liberalism . Is it because they want a better society in which everyone gets a chance of a decent life ? Do they actually care about the people they claim to speak for - they people right at the bottom of the social scale ? ..."
"... The answer , of course, is no. They see attacking liberalism as a means of defending their own privileges which they believe liberalism and the gradual progress of recent years towards a more equal society have undermined. ..."
"... Since they are basically conning the underprivileged and cannot deliver what they promise the right will find itself driven to even more extremes of bigotry and deceit to maintain its position. The prospect is terrifying. ..."
Of course in the age of inverted reality, spin and obfuscation, the true nature of [neo]iberals
is quite the reverse. Just like the fabians they seek to divert attention from their real goals
by describing themselves as mirror opposites.
The [neo]liberal elite is nothing of the sort, they seek to control, manipulate and suppress
everything which doesn't fit their hidden purpose, which is to promote the flat earth globalisation
of the debt pyramid on behalf of the banking cartel and the likes of the Rothschild's.
They are despicable creatures, full to the brim with breath-taking hypocrisy, happy to
claim faux indignation over widening inequality and falling living standards while they promote
the pyramid scheme of debts which causes it. They may dream of a world government with socialism
for the masses and largesse for the elites, but as sure as the sun rises in the east, such concentration
of power, wielded by those least suitable to hold it, would create an authoritarian tyranny like
seen before. Power in all forms should be spread into as many hands as possible, monopolies
are always bad yet, once again, the illiberal's love a monopoly because they're not what they
seem.
tempestteacup 1d ago Guardian Pick
...You certainly have a point that the experiences in the UK and the US are different for lots
of reasons - historic alignments of the major parties, political corruption, and the different
points where class, race, gender and geographical location intersect - but the latter-day form
of liberalism tried - and failed - to do the same thing in both countries.
Essentially, Third Way liberalism as practised by Clinton and Blair, but even more so by
those who followed them (Clinton and Blair were, let's not forget, populists of a sort), is predicated
on the belief that you can fashion a winning mandate to govern by appealing to a consensus among
middle class professionals, the liberal rich, and what they saw as a new, unideological class
of 21st century workers - the socially liberal, politically apathetic, precariously situated masses
who hover somewhere between traditional working class and educated middle.
They did this by appealing to issues of social identity while reinforcing the economics
of the right-wing neoliberal ushered in by Thatcher and Reagan. They were, at the same time, losing
working class votes - but their analysis of the economics told them that the (in a Marxist sense)
working class was an endangered species. The Republicans in America willingly played into
this fantastical analysis by engaging in the culture wars - politically useful but also economically
necessary as a distraction from the growing cross-party consensus on how to enshrine, extend and
improve the means of capitalist exploitation through deregulation and debt.
2008 exploded this fiction but its architects remain wedded to the cause. They personally
enriched themselves by opening-up traditionally popular parties to the donations and interests
of corporate capitalism. Look beyond Blair and the Clintons and you will see hundreds of centre-left
politicians growing fat on an endless stream of corporate money: Cory Booker, Chuck Schumer, DWS,
Howard Dean (in the US), Ben Bradshaw, Chris Byrne, Alastair Campbell, Jack Straw (in the UK)
.
Evolutions and developments require always refreshed analysis but the basic principles by which
we subject those developments to our analysis remain fundamentally the same: capitalism is a system
by which wealth is transferred from the workers to those owning the means of production. Deregulated
capitalism tends to monopolies and the rise of a rentier class epitomised on Wall Street and property
speculators like Donald Trump.
Global capitalism pits workers against workers in an endless spiral of wage deflation and
this fosters divisions between those whose class interests are, in fact, the same. The alienation
that is an intimate part of capitalist production is carried over into the social relations
between workers and can only be short-circuited by acts of radical organising - revolution begins
with a question that the system cannot answer and ends with a demand that refuses to be denied.
Marx also made a distinctive between productive and fictitious capital - share prices,
derivatives and other financial instruments, arbitrage and all the other heinous arsenal of second-order
exploitation. Neoliberalism has delivered productive capital into the arms of fictitious capital
and ushered us into a world governed by nobody so much as orchestrated according to the graph-lines
of the global stock markets. It has turned the spectacle from social relations mediates by images
into the beating heart of how, where and why wealth moves the way that it does. The unreality
has seeped into every aspect of lived experience.
And yet, strangely, I am less despondent then I was under Obama and his smooth delivery
of a hope and change always deferred.
Or Hillary Clinton and her revolution of upper-class women with their own specific class
interests. There is organising taking place right now and making demands that this system will
not satisfy - because it is designed to do the exact opposite.
I would rather speak with an alt-right troll than a liberal because one is searching for
answers in the wrong place where the other glibly renders apologies for the system from which
they seek to profit at the expense of those to whom they offer nothing but false sympathy.
There is a mobilisation of anger and a refusal to accept the fictions spun by the ruling
class that can potentially be harnessed for permanent change - and, moreover, 8 years of Obama
and his pathological love for financial elites has revealed that radical change can be delivered
only through radical means.
joropofever -> tempestteacup 2d ago
I would agree about this idea of a vacuum being created by the political class but really I
think the political turmoil is a reflection of the economic inequality, economics shaping the
political. But as others have said really we mean neoliberalism, not liberalism. Liberalism
and capitalism are not the same thing and cant be used interchangeably, liberalism is a set of
beliefs and capitalism is a set of practices which are sometimes at odds with one another. On
the other hand, neoliberalism as a set of beliefs explicitly accepts the hegemony of capital and
the expansion of the market economy into all areas of society and life.
I think what you are saying (correct me if wrong) is that the reformist and incrementalist
view of a progressive social democracy that balances state and market for the betterment of all
is con. Marxists said this view would result in the state becoming a conduit for the accumulation
of power in the hands of capital and the gradual destruction of welfare and social institutions,
and they were right.
My question is then though is how do you achieve this transformation (though I don't know what
you would think best) without running the risk of a right-wing and nationalist hijack? History
is littered with cases where well intended left-wing revolutions and social movements helped sow
the seeds for later horrors. As you say, the prognosis and world view of the radical left and
the alt-right are not miles apart.
tempestteacup -> joropofever 2d ago
More excellent and pertinent questions!
I don't think that Trump and Brexit mark an epochal shift; I think they are signs of disintegration.
The more significant (though still not epochal!) moment was the 2008 financial crisis - and the
complete failure of the political elites of Europe and America to address its fallout. This, by
the way, was also far from the unforeseeable calamity that it was characterised as being in many
sections of the media. Many economists and political analysts had discussed deregulation and unsustainable
debt in terms of future crises; it wasn't prophesy, but a basic understanding of how unrestricted
market capitalism (especially when reliant on the vicissitudes of shares/bonds/derivatives) operates.
And I don't accept that this is an anglocentric point of view. There are crises across Europe,
although none have as yet had quite the before/after drama of the Brexit and presidential votes.
In France, the Front National are basically the second party. In Italy, the chaotic 5 Star Movement
are on the verge of toppling the prime minister and making gains elsewhere. In Hungary, Fidesz
and the borderline neo-fascist Jobbik dominate political discourse, as the Law and Justice party
have come to do in Poland. Even in Scandinavia, the Danish People's Party and True Finns have
made significant, even decisive, inroads on political discourse.
Commentators are fond of saying that the left-right divide has been scrambled. Doubtless they
would cite some of these as examples - many of the European nationalist parties I have mentioned
are in favour of strong welfare protections, and use race, country of origin, religion or ethnicity
as a dividing line. To me this does not signify the same thing - the Nazis were called National
Socialists for a reason, and while the purges of the 30s and the war brought the anti-semitic
mass murderers into the ascendancy, there were many founder-members like Strasser and Rohm who
were essentially socialists with a racial or nationalist element.
But look, you're right - the events of 2016 are, as we speak, being interpreted, exploited
and spun to the benefit of the prevailing conditions. One would expect no different - it's why
I was not surprised that the Tory bloodletting post-Brexit gave way to such a painless transition,
just as it appears to be doing in America under President-elect Trump. It's what the ruling class
do - protect their interests. What I believe has happened is that there is now a rupture within
the left (in its broadest sense) and that rupture is defined by those who believe economic change
will deliver social justice on the one hand and those who believe in cosmetic changes without
challenging the economic system.
More broadly, I agree with you - history is not some untroubled march of the working class
to freedom (alas!) It is contingent, messy and unexpected. We have agency - and we have to use
it (another thing I believe has been reignited in the last 8 years). One of many ironies of the
present situation is that neoliberal politicians believed that the educated precariat they were
helping to create would be unideological, politically apathetic consumers - and yet it is the
young who are returning the repressed in the form of unrest, economic demands, and the re-introduction
of class into political discourse.
If I may be allowed to spit-ball for a moment, this is, to my mind, a pivotal moment in history.
Those of us adults but under 40 are the last vestiges of the 20th century and its traditions of
dissent, revolt and counterculture. We are, so to speak, the children of the 1960s. And those
from the 1960s are still here - there is a living link, and in revolutionary terms, such things
matter. In a period where we could potentially prevent catastrophic, irreversible climate change,
there is no more time. It is imperative that we make our stand now, with those who lived through
the last revolutionary period in the west, to keep that flame of revolt alive - or, better yet,
to stoke it into a pyre. Because without those signal historical developments, those noble challenges,
the flame dies down and is covered in ashes....
Okay though, back to reality! That, I concede, is a very American and European perspective
that does not take into account the global developments in Asia, Africa or Latin America. I actually
lived in China for a while as a young man, and it struck me at the time that the society offered
a possible, if bleak, template for the future - a technocratic, one-party state in which people
trusted them to deliver the right decisions through a central bureaucracy but with consumer freedoms
sufficient to forestall unrest. This is, perhaps, an alternative to the dissent and potentially
unrest I have described - and what makes the latter imperative...?
tempestteacup -> joropofever 2d ago
Oh, and what you wrote about waste is very interesting. I certainly agree that it, "efficiency"
(usually code for cuts and/or transfer from public to private stewardship), are over-fetishised.
In fact, ridiculously so. The waste of most governments is staggering and yet they attack only
certain areas. What America squanders on its military is the most obvious of examples - or its
increasingly repressive police.
I was more concerned, though, with the general sustainability of a system where decisions are
made by criteria other than profit/loss, demand/supply. You're right about direct democracy (it's
been ages since I've read Raymond Williams so I'm glad you reminded me to do so again!) - but
how does that work when it comes to resources that have to be shared over large areas? Is it possible
to build, step by step, a democratic structure of shared ownership that is both responsive to
individual communities and responsible in its disposition of resources on the basis of needs rather
than profits?
tempestteacup -> ForgetThePolitics 1d ago
Sorry but I can't agree with that. Popular in terms of electoral success and populist in terms
of generating fervid support through direct, emotionally charged appeals to your audience's most
passionately held interests, fears or aspirations while adopting their language and mobilising
their energy, are two very different things. Obama was popular but not, it turned out, a populist
despite the narrative of his early presidency, inflected as it still was with the delirious,
joyous cheers the followed his rhetorically rich but studiously vague Yes We Can barnburner (of
sorts).
The point with Trump - and Brexit too - is not so much what it means to the man himself
(or Brexit-profiteers like Boris Johnson) but how his victory gets brandished to confer legitimacy
and political cover for a newly emboldened syndicate of zealously right-wing politicians and the
corporate interests they represent (especially in America, where the majority of Congressional
Republicans are little better than local union bosses who have been installed by the Mafia to
carry their water and hold their places to exclude anyone else attaining any uncorrupted power
or autonomous control).
We are seeing this happen right now as Trump fashions his administration - there are a
lot of lobbyists, reactionary financiers, neoconservative mavens, embittered figures from the
intelligence community, and evangelical culture warriors suddenly footloose and demob happy after
8 years of Barack Obama and his patented brand of Fidel-loving, radical Chicago organising, spectacularly
lukewarm but yet (according to Fox) apocalyptically awful, anti-American, Socialist Revolution.
There are legions of pissed off, fired up kingpins from the fossil fuel industry already itching
to fire up the federal shredders fired up and set loose in the EPA. There are batallions of combat-ready,
obscenely wealthy people and dynasties for whom there is no such thing as too much, and who are
salivating just as they imagine the glorious bonfire of taxes that their Republican lackeys have
a chance to build and dance around in one of their pagan rituals of money worship and rapacity
as a fetish of a heavenly future. And they can build it on the floor of a Congress they also dominate,
before embarking on a mission to extend their current gains during the 2018 mid-terms, when several
precariously held Democratic Senate seats in otherwise Trump-friendly states will be up for re-election.
Much of the above will be familiar from Bush files - a man who was seldom happier than
when sunk into his Lay-Z-Boy learning how to eat pretzels safely from Barney, his Scottish Terrier.
His main role was to show up when required and gurn for the cameras, narrow his peepers and regurgitate
what the teleprompter feeds him, before signing the executive orders dreamt up by his dream-team
of vampyric, far-right champions of such American glories as the Vietnam War, Watergate, Iran/Contra,
and more Latin American coup d'etats than even Henry Kissinger could shake his razor-studded cudgel
at. It was their interests, energies, vendettas and connections that provided the real substance
for a presidency characterised above all by the elevation of anti-intellectualism to the level
of essential and authentic patriotic performance (preparing ground now bulldozed across by a Trump-shaped
figure reveling in the sheer winningness of it all).
The fact is that Trump cares about victory and basking in the light of his own self-proclaimed
greatness and now he's won. I doubt he cares nearly as much about mastering the levers of government
or pursuing some overarching vision as he does about preening himself in his new role as the Winner
of the World's Greatest Ever Reality TV Show. He may have thrown red meat to the crowds with the
gun-toting, abortion-hating campaign rhetoric, but that is the base for every contemporary Republican's
bill of fare. I don't believe he gives a tinker's cuss about those issues or any of the other
poisons that constitute their arsenal of cultural pesticides.
Like all rich people, he wants to pay as little tax as possible without breaking the law
(or at least breaking it outrageously enough to attract the notice of the perennially over-worked,
under-resourced IRS). Like many rich people, he believes that his wealth is objective and
irrefutable proof of his personal excellence; that this proves how America is truly a land of
opportunity, where hard work, innovation and good old moxie can transform any Joe Schlubb on Main
Street into a millionaire princeling of the Upper West Side - thus demonstrating that social investment
in education or spending to address issues like systemic discrimination is just throwing money
at life's losers.
tempestteacup -> ForgetThePolitics 1d ago
And finally, like most rich people, he refuses to accept that governments can or should
regulate transactions or industries in ways that may even slightly inhibit their unbound, irrepressible
pursuit of their self-interests and unquenchable desire for more, more and yet again more.
These basic right-wing tenets, of course, all easily translate into concrete policy - that's
what the Republicans do best. It is what should be expected.
But beyond that, there is the small matter of the world's most highly evolved and comprehensive
system of state surveillance and repression - a confluence of agencies, technologies, paranoia
and class war that was embraced and embellished by Obama from the moment he brought his glacial
approach to change to the highest office in the land indeed, he showed that he was quite comfortable
signing off on historic erosions of constitutional freedoms provided it was endorsed by his ever-responsible
friends in Langley and The Pentagon.
If, as would be unsurprising, public unrest spreads and civil disobedience intensifies while
Trump begin work on the familiar Republican transfer of wealth, with Black Lives Matter hardening
their resistance and resolve in the face of police brutalities now able to justify themselves
in terms of sympathetic views espoused by the incoming President himself; with white working class
voters realising that their interests have been, were always going to be, betrayed; with environmental
activists mobilised in deadly earnest and in a desperate effort to push back against potentially
catastrophic energy and industrial policies that imperil everyone's future; as young people schooled
in the Bernie campaign seek to organise and resist the excesses of a Trump presidency that few
accept as legitimately representative of them or their lives, and as the despair of the country
increases under a divisive, duplicitous and avaricious administration soaked in the very corruption
it was such a winning strategy to declaim - well, then Trump has at his fingers the shiniest forms
of repression that money and 21st century technology can provide: blanket surveillance online
and in the streets, habeas corpus perilously undermined by legislation like the NDAA, hyper-militarised
police forces trained in the use of obscenely excessive force, obscenely high sentences imposed
by one of the army of judges perversely satisfied by every extreme species of punitive justice
at their fingertips, along with prosecutors who consider the multi-year deprivation of freedom
in a brutalising prison system as a badge of professional honour, all the while dreaming up criminal
indictments that are so overzealous they look for felonies to charge the felonies with. Many warned
that the step-by-step construction of this multi-layered, barely controllable system (to complement
the steady erosion of civil liberties and constitutional rights) betrayed a potentially disastrous
lack of foresight. It would not always rest in the command of people unwilling to test its full
extent, and once you have created such possibilities in law, in storage rooms of equipment, in
training drills and operating manuals, it is only a matter of time before they will be invoked
in reality (and seldom in the exact ways they were originally intended or designed).
tempestteacup -> ForgetThePolitics 1d ago
So while Trump and his administration may in many ways resemble the familiar class warriors
of Republican presidencies past, albeit with added evangelical vim, viciousness and vapidity courtesy
of Mike Pence, let's not forget that his frequently displayed authoritarianism will have ample
opportunity to be both stress-tested and to revenge itself on a plethora of opponents. Add
in the fact that the Republicans have achieved an unexpected, clean sweep of Congress, as well
as holding an unprecedented number of governorships. They can act from a position of unparalleled
strength, and as a strength that came unexpectedly one should not be surprised if they start wielding
it recklessly. They can do so, also, after 8 years of stultification and political paralysis,
placed under restraints in order the more effectively to effectively perform their new definition
of Congressional work: obstruct everything the President attempts to do. They only receive the
occasional fun day-out to the Benghazi hearings or when they could play find the gavel during
the 2013 sequester.
So I would expect a lot of pent-up resentment, plenty of lunatic ideas and plenty of hubris
that sees no problem in airing them as if they were the wisdom of Solomon. Their opposition is
disastrously enfeebled after years of poor candidates being selected on the basis of their ability
to toe the corporate line rather than define and then achieve political goals. There is a chance
here, in other words and before demographic changes make future Republican presidential victories
more remote, to pursue their most cherished, most ideological, most shameless, lunatic, idiotic,
corrupt, destructive and irresponsible policies. Trump's bulbous slab of torso-meat, congenitally
bound to seek and fill every available limelight, can provide cover as they rip up every regulation
they see lying around or pretend to have read, slash taxes for themselves, their families, friends,
and all those fine citizens who fund their political cesspool, all the while having fun with whichever
civil liberty or egalitarian policy that catches their eye or makes them feel confused, perhaps
inadequate, with their nasty, un-American regard for systemic injustice and the imperative to
address historic wrongs.
Fresh from one of their favoured think-tanks, where charmed minds devote themselves to the
rigorous and sober analysis, the scholarly investigation of such pressing national issues as:
the best way to enjoy your money is to keep it, why the poor have only themselves to blame, and
freedom is whatever we say it is, vulpine Republican advisers can sink their teeth into racial
equality, voting rights, affirmative action, abortion rights, and whatever else Mike Pence and
friends have decided does not represent their crushingly reactionary, mind-numbingly mediocre
vision of an America without charm and sunk grotesquely in self-love, with anti-intellectualism
as a core principle and, in the end, frightened of anything that diverges from a template of respectability
designed by someone who seemingly loathes the entire human race.
None of this, however, justifies the orgy of visions competing to describe the most apocalyptic
America, commentators outdoing each other in op-ed after op-ed as they spin stories from the most
terrifying speculations or possible scenarios. I'm simply pointing out that it is not that difficult
to foresee the direction Trump's presidency will travel - or to point out where and how things
could become very nasty. The point, really, is to move beyond the office of the President,
which is always absurdly fetishised in American politics to the detriment of scrutiny that should
be directed elsewhere - at his team, his cabinet, his appointments, and his place in the web of
Congressional Republicans, lobbyists and corporate money the nexus of interests that really
dictates policies and determined which political battles get fought aggressively, which cast aside.
The truth so far is about as desolate as one would expect made that little bit worse by the
continued (maybe permanent?) state of delusion and the feeble platitudes dribbling out of the
by-now-almost-unsalvageable Congressional Democratic Wurlitzer of Wisdom, scarcely enough to drowned
the noise of meretricious minds whirring as they look for solutions to the only question that
really matters: how to continue mainlining the corporate donor money-dope while at the same time
presenting an appearance of interest in the left-wing changes championed by progressive Democrats
like Bernie sufficient to placate the latter along with their irritatingly rambunctious supporters.
tempestteacup -> ForgetThePolitics 1d ago
Ok, crazy - this is like a nightmare of my own making. So long! But must finished now I've
started........
Blimey, this got long - apologies. Let me offer the reader's digest, abbreviated version: Trump
and his court have thus far confirmed what was fairly obvious - that he and his new Congressional
play-mates are already pawing the ground in anticipation of the approaching adventure into their
favourite land: the magical kingdom of inexhaustible tax cuts, where every regulation can be tossed
on the fire, where protections come to you to be gutted and the public finances positively cry
out to be finagled in a giant cabaret that they can dedicate, as is their wont, to their feared
yet beloved corporate masters. They can demonstrate to their heart's content their enduring fealty
to the donor-class who bestride the nation like benevolent princes, they can lavish on them a
horn of plenty overflowing with gifts, endowments, contracts, pourboires, fortunes bilked from
the taxpayer and juggled into the pockets of these stalwart champions of American values, coy
little loopholes with diagrams for how to exploit them, and above all first, last and always
every asset they can think of stripping from public ownership they have been taught to believe
is merely a euphemism for Marxist-Leninism.
In the meantime, public resistance or acts of dissent, the faintest hint of mass organising
will be met with state forces of repression restrained now by little more than the frayed strands
of a mostly cut-through piece of rope. Divisions revealed, exploited and entrenched during the
election will, without serious and sustained will to extend solidarity beyond immediate interest-groups
and to learn from the experiences of others, become the permanent operative language of the entire
administration of American government. People will not see a new dawn, but the delirious rush
to expand those chaotic, inhumane, amoral, and utterly unaccountable market forces that have already
seeped far too deep into the already grotty political system. Trump is only a piece of this large
and ugly tapestry a figurehead for an army of cultural and social vandals serving alongside
economic thieves and assassins. These are, moreover, the experts in how to instrumentalise economic
inequality to serve the very politicians responsible for fostering the inequality in the first
place and those most wedded to beliefs capable only of making matters worse for all but themselves
and their donor-owners.
But let's not be lulled by the familiarity of parts of this story. Familiar from Reagan
and Bush Jnr, as well as Clinton and Obama (albeit with a more fulgent presentation and the skilled
performance of sympathy to sugar the pill). Familiar from every interview with almost every
Republican and certainly the freshly minted, post Tea Party brand of prosperity Christian bullies
worthy of far greater anger and loathing than they often receive thanks to a perhaps deliberate
act involving a quasi-folksy clownishness however many references, though, to the Republican
clown car cannot alter the fact that even the thickest among them is capable of being herded with
the others when it comes to voting for vicious legislation, insane tax cuts and budgets in which
each new one is more limited, more nihilistic than the one before in every respect but the military
and the ever-growing number of enormous flags that will soon follow Republican politicians around
the country to provide an immediately appropriate backdrop in case they feel the sudden need to
share their wisdom with the world or the nearest news anchor.
But while some parts are familiar, enough should be new or unknown to keep all of us looking
forward anxiously, preparing carefully, and planning intelligently for the potentially vicious
challenges ahead.
Danny Sheahan 3d ago
[Neo]Liberalism is an ideology, it has many variations and even definitions for people.
Arrogance, superiority, disdain, refusal to engage etc. A moral certainty more in line with doctrinal
religion.
These are big problems on the left/liberal platform.
Certainly not all but enough to damage it is a position.
Many, like me, who vote left are hoping that the penny will drop. It has to at some stage,
why not now?
It may not though, it would not surprise me.
tehanomander -> Danny Sheahan 3d ago
What Danny said
Supported Labour all my life probably will with reservations still ....but the disconnect is
palpable now (think Owen Smith to understand my meaning)
I voted Leave though .....so obviously now in here I'm a Trump supporter and racist xenophobe
(which always amuses my Jamaican wife when I tell her)
Keith Macdonald 3d ago \
The first question to ask is why these right wing commentators are attacking liberalism
. Is it because they want a better society in which everyone gets a chance of a decent life ?
Do they actually care about the people they claim to speak for - they people right at the bottom
of the social scale ?
Do they really want their own children to compete on equal terms with the rest of the population
for the inevitably limited number of top jobs ?
The answer , of course, is no. They see attacking liberalism as a means of defending their
own privileges which they believe liberalism and the gradual progress of recent years towards
a more equal society have undermined.
Since they are basically conning the underprivileged and cannot deliver what they promise
the right will find itself driven to even more extremes of bigotry and deceit to maintain its
position. The prospect is terrifying.
The next question is how liberals and progressives deal with this powerful onslaught. So far
we have done badly. For example Hillary Clinton clearly did not have a clue how Trump used the
constructed "reality" of shows like The Apprentice to mount a presidential campaign based on fiction
(although of course the underlying discontents are real). There is a massive amount of work to
do here.
Yes - there has been a failure to make globalisation work. I think Thomas Piketty began to
give some answers to this at
"... he changed American politics forever by demonstrating that style was more important than substance. In fact, he showed that style was everything and substance utterly unimportant. ..."
"... Conservatives used "bracket creep" to convince the middle class that reducing marginal rates on the top tax brackets along with their own would be a good idea, then with the assistance of Democrats replaced the revenue with a huge increase in FICA so that the Social Security Trust Fund could finance the deficit in the rest of the budget. The result was a huge boon to the richest, little difference for the middle class, and a far greater burden for the working poor. ..."
"... Any conversation about who the fantasy-projection "Reagan" was, misses an important reality: He was a hologram, fabricated by a kaleidoscope of various sorts of so-called "conservative" handlers and puppeteers. It was those "puppeteers" who ranged from heartlessly, stunningly "conservative" (destroya-tive), all the way further right to the kind of militaristic, macho, crackpots who have finally emerged from under their rocks at this year's "candidates." ..."
Do not contradict the memories of all the old teabaggers who desperately need the myth of Saint
Ronnie to justify their Greed is Good declining mentality and years.
When Reagan cut-and-ran on Lebanon he showed rare discretion. A lot of the puffery stuff was
B-Movie grade, but there was a lot of cross-the-aisle ventures, too.
He was a politician. The current GOP is just a bunch of white Fundie bullies, actually and
metaphorically (e.g., Carson).
Zepp -> thedono 19 Sep 2015 11:37
Well, compared to Cruz, or Santorum, or Huckabee, he's a moderate. Of course, compared to the
right people, you can describe Mussolini or Khruschev as moderates...
mastermisanthrope 19 Sep 2015 11:37
Lifelong shill
LostintheUS -> William J Rood 19 Sep 2015 11:36
Reagan underwent a political conversion when Nancy broke up his marriage with Jane Wyman and
married him.
The cold war ended while Reagan was president, but he did not win the cold war. His rhetoric
and strategy was wishful thinking - there's no way he could have had the definitive intelligence
about the entire military-political-economic that would have justified the confidence he projected.
He merely lucked out, significantly damaging the US economy by trying (and luckily succeeding)
to out-militarize the soviets.
pretzelattack -> kattw 19 Sep 2015 11:31
both clinton and obama have showed a willingness to "reform social security". try naked capitalism,
there are probably a number of articles in the archives.
LostintheUS -> piethein 19 Sep 2015 11:29
And that the emergency room federally funded program that saved his life was soon after defunded...by
him.
LostintheUS -> pretzelattack 19 Sep 2015 11:28
Many of us saw through him...I noted the senility during his speeches during his first campaign...as
did many people I knew.
Dementia masquerading as politics.
But you can't say anything negative about Saint Ronald!
Peter Davis -> Peter Davis 19 Sep 2015 11:22
I believe Reagan also is responsible for creating the Hollywood notion in American politics
and political thinking that life works just like a movie--with good guys and bad guys. And all
one needs is a gun and you can save the world. That sort of delusional thinking has been at the
heart of the modern GOP ever since.
loljahlol -> ID3732233 19 Sep 2015 11:21
Reagan did not end the Cold War. Brezhnev rule solidified the Soviet death. Their corrupt,
inefficient form of capitalism could not compete with the globalization of Western capitalism.
John78745 19 Sep 2015 11:21
There's not much nuance to Reagan. He was a coward, a bully and a loser. He got hundreds of
U.S. Marines killed then he ran from the terrorists in Beirut and on the Archille Lauro personally
creating the seeds of the morass of terrorists we now live with. He fostered the republican traditions
of sending U.S. jobs overseas at the expense of U.S. taxpayers and of invading helpless, hapless
nations, a tradition so adeptly followed by Bush I & II. He also promised that there would never
be a need for another amnesty.
I guess it's true that he talked mean to the Russians, broke unions, and helped make the military
industrial complex into the insatiable war machine that it is today. Remember murderous Iran-Contra
(a real) scandal where he and his minions worked in secret without congressional authorization
to overthrow a democratically elected government while conspiring to supply arms to the dastardly
Iranians!
We could also say that he bravely fought to save the U.S. from socialized medicine and to expunge
the tradition of free tuition for California students. Whatta hero!
thankgodimanatheist 19 Sep 2015 11:19
Reagan, the acting President, was the worst President since WWII until the Cheney/Bush debacle.
Most of the problems we face today can be directly traced to his voodoo economics, huge deficit
spending, deregulation, and in retrospect disastrous foreign policies.
LostintheUS 19 Sep 2015 11:17
"these days everyone seems to love Ronald."
Absolutely, not true. The farther along we go in time, the more Americans realize the damage
this man and his backers did to America and the world. The inversion of the tax tables, the undoing
of union laws, the polarization of Americans against each other so the plutocrats had no real
opposition and on and on. His camp stole the election in 1980 through making a back door deal
with the Iranian government to hold onto the American hostages until the election when Jimmy Carter
had negotiated an end to the hostage crisis, which was the undoing of Jimmy Carter's administration.
"Behind Carter's back, the Reagan campaign worked out a deal with the leader of Iran's radical
faction - Supreme Leader Ayatollah Khomeini - to keep the hostages in captivity until after the
1980 Presidential election." This is, unquestionably, treason. http://www.truth-out.org/opinion/item/20287-without-reagans-treason-iran-would-not-be-a-problem
No, Reagan marks the downward turn for our country and has resulted in the economic and social
mess we still have not clawed our way back out of. No, Reagan is no hero, he is an American nemesis
and a traitor. Reagan raised taxes three times while slashing the tax rate of the super rich...starting
the downward spiral of the middle-class and the funneling of money toward the 1%. Thus his reputation
as a "tax cutter", yeah, if you were a multi-millionaire.
Never thought of Reagan as the first Shrub but it fits. I wonder if future pundits will sing
the Dub's praises as well. I think I'm gonna be sick for a bit.
kattw -> namora 19 Sep 2015 11:10
Pretzel is maybe talking about the 'strengthen SS' bandwagon? Perhaps? Not entirely sure myself,
but yeah - one of the major democrat platform planks is that SS should NOT be privatized, and
that if people want to invest in stocks, they can do that on their own. The whole point of SS
is to be a mattress full of cash that is NOT vulnerable to the vagaries of the market, and will
always have some cash in it to be used as needed.
SS would be totally secure, too, if congress would stop robbing it for other projects, or pay
back all they've borrowed. As it is, I wish *I* was as broke as republicans claim SS is - I wouldn't
mind having a few billion in the bank.
William J Rood 19 Sep 2015 11:08
Reagan was former president of the Screen Actors' Guild. Obviously, he thought unions for highly
educated workers were great. Meatpackers? Not so much.
RealSoothsayer 19 Sep 2015 11:04
This article does not mention the fact that in his last couple of years as President at least,
his mental state had seriously deteriorated. He could not remember his own policies, names, etc.
CBS' Leslie Stahl should be prosecuted for not being honest with her everyone when she found out.
Peter Davis 19 Sep 2015 11:04
Reagan was a failed president who nonetheless managed to convince people that he was great.
He was a professional actor, after all. And he acted his way into the White House. Most importantly,
he changed American politics forever by demonstrating that style was more important than substance.
In fact, he showed that style was everything and substance utterly unimportant. He was the
figurehead while his handlers did the dirty work of Iran-Contra, ballooning deficits, and tanking
unemployment.
nishville 19 Sep 2015 11:03
For me, he was a pioneer. He was the first sock-puppet president, starting a noble tradition
that reached its climax with W.
mbidding -> hackerkat 19 Sep 2015 11:03
In addition to:
Treasonous traitor when, as a presidential candidate, he negotiated with Khomeini to hold the
hostages till after the election.
Subverter of the Constitution via the Iran-Contra scandal.
Destroyer of social cohesion by turning JFK's famous admonishment of "ask not what your country
can do for you, ask what you can do for your country" on its head with his meme that all evil
emanates from the government and taxation represents stealing rather than a social obligation
for any civilized society that wishes to continue to develop in a sound fashion that lifts all
boats.
Incarcerator in Chief through his tough on crime and war on drugs policies, not to mention
defunding mental health care.
Pisser in Chief through his successful efforts to imbed trickle down economics as the economic
thought du jour which even its original architects, notably Stockman, now confirm is a failed
theory that we nonetheless cling to to this day.
Ignoramus in Chief by gutting real federal financial aid for higher education leading to the
obscene amounts of student debt our college students now incur.
Terrorist creator extraordinaire not only with the creation of the Latin American death squads
you note, but the creation, support, trading, and funding of the mujahedin and Bin Laden himself,
now known as the Taliban, Al Qa'ida, and ISIS, only the most notable among others.
namora -> trholland1 19 Sep 2015 10:59
That is not taking into account his greatest role for which he was ignored for a much deserved
Oscar, Golden Globe or any of the other awards passed out by the entertainment industry, President
of The United States of America. He absolutely nailed that one.
William J Rood 19 Sep 2015 10:58
Conservatives used "bracket creep" to convince the middle class that reducing marginal
rates on the top tax brackets along with their own would be a good idea, then with the assistance
of Democrats replaced the revenue with a huge increase in FICA so that the Social Security Trust
Fund could finance the deficit in the rest of the budget. The result was a huge boon to the richest,
little difference for the middle class, and a far greater burden for the working poor.
Tax brackets could have been indexed to inflation, but that wouldn't have been so great for
Reagans real supporters.
Doueman 19 Sep 2015 10:55
What sad comments by these armchair experts.
They don't gel with my experiences in North America during this period at all. When Reagan
ran for the presidency he was generally ridiculed by much of the press in the US and just about
all of the press in the UK for being a right wing fanatic, a lightweight, too old, uninformed
and even worse an actor. I found this rather curious and watched him specifically on TV in unscripted
scenarios to form my own impression as to how such a person, with supposedly limited abilities,
could possibly run for President of the US. I get a bit suspicious when organisations and individuals
protest and ridicule too much.
My reaction was that he handled himself well and gradually concluded that the mainly Eastern
liberal press in the US couldn't really stomach a California actor since they themselves were
meant to know everything. He actually was pretty well read ( visitors were later astonished to
read his multiple annotations in heavy weight books in his library). He was a clever and astute
union negotiator dealing with some of the toughest Hollywood moguls who would eat most negotiators
for dinner. He had become Governor of California and had done a fine job. I thought it was unlikely
he was the simpleton many portrayed. He couldn't be easily categorised as he embraced many good
aspects of the Democrats and the Republicans. Life wasn't so polarised then.
The US had left leaning Republicans and right wing Democrats. A political party as Churchill
noted was simply a charger to ride into action.
In my view, his presidential record was pretty remarkable. A charming, fair minded charismatic
man without the advantage of a wealthy background or influential family. The world was lucky to
have him.
raffine -> particle 19 Sep 2015 10:50
Reagan's second term was a disaster. But as someone below mentioned, conservative pundits and
their financers engaged in a campaign to make Reagan into a right-wing FDR. The most effective,
albeit bogus, claim on Reagan's behalf was that he had ended the Cold War.
jpsartreny 19 Sep 2015 14:22
Reagan is the shadow governments greatest triumph. After the adolescent Kennedy, egomaniacs
Johnson and Nixon , they needed front guys who followed orders instead .
The experiment with the peanut farmer from Georgia provided disastrous to Zebrew Brzezinski
and the liberals. The conservatives had better luck with a B- movie actor with an great talent
to read of the teleprompter.
RealSoothsayer -> semper12 19 Sep 2015 14:19
How? By talking? Gobachev brought down the USSR with his 'Glasnost' and 'Perestroika' policies.
His vision was what communist China later on achieved: mixed economy that flies a red flag. Reagan
was just an observer, absolutely nothing more. Tito of Yugoslavia was even more instrumental.
Marc Herlands 19 Sep 2015 14:17
IMHO Reagan was the second most successful president, behind FDR and ahead of LBJ. Not that
I liked anything about him, but he moved this country to the right and set the play book. He lowered
taxes on the wealthy, the corporations, capital gains, and estate taxes. He reduced growth in
programs for the poor, and made it impossible to increase their funding after his presidency because
of he left huge federal deficits caused by lowering taxes and increasing outlays on the military.
This Republican playbook still is their way of making sure that the Democrats can't give the poor
more money after they lose power. Also, he enlarged the program for deregulating industries, doing
away with antitrust laws, hindering labor laws, encouraged anti-union behavior, and did nothing
for AIDS research. He was a scoundrel who did a deal with Iran to prevent Carter from being re-elected.
He directly disobeyed Congressional laws not to intervene in Nicaragua. He set the tone for US
interventions after him.
bloggod 19 Sep 2015 14:17
Obama, Clinton, and the Bushes all hope to be forgiven for their unpardonable crimes.
Popularity is created. It is not populism, or informed consent of the pubic as approval for
more of the same collusion.
It is a One Party hoe down.
bloggod -> SigmetSue 19 Sep 2015 14:12
"they"
the indicted Sec of Defense Weinberger; the indicted head of the CIA Casey who "died" as he
was due to testify: Mcfarlane, Abrams, Clair George, Oilyver North, Richard Secord, Albert Hakim
Reagan had no genius, he had Bush-CIA and the Jerry Falwell, Billy Graham, and the "immoral
majority" of anti-abortion war profiteers.
Marios Antoniou Lattimore 19 Sep 2015 13:52
I agree with everything you mentioned, and I intensely dislike Reagan YET the point of the
article wasn't that Reagan was good, it rather points to the fact that Republicans have shifted
so far to the right that Reagan would appear moderate compared to the current batch.
Rainer Jansohn pretzelattack 19 Sep 2015 13:52
Interesting had been his speeches during the Cold War.Scientists have subsumed it under "Social
Religion",a special form of political theology.Simple dialectical:UDSSR the incarnation of the
evil/hell on the other side USA :the country of God himself.A tradition in USA working until now.There
is no separation between government and church as in good old centuries sincetwo centuries resulting
from enlightening per Philosophie/Voltaire/Kant/Hume/Descartes and so on.Look at Obamas speeches/God
is always mixed in!
talenttruth 19 Sep 2015 13:49
Any conversation about who the fantasy-projection "Reagan" was, misses an important reality:
He was a hologram, fabricated by a kaleidoscope of various sorts of so-called "conservative" handlers
and puppeteers. It was those "puppeteers" who ranged from heartlessly, stunningly "conservative"
(destroya-tive), all the way further right to the kind of militaristic, macho, crackpots who have
finally emerged from under their rocks at this year's "candidates."
The fact that Reagan was going ga-ga definitely in his second term, and likely for part of
the first was entirely convenient for his Non-Human-Based-Crackpot-Right-Holographers, since
he had was not actually "driven" to vacuousness by a tragic mental condition (dementia) THAT
change was merely a "short putt" from his entire previous life.
Regarding his Great Achievement, the collapse of the Soviet Union? After decades of monstrous
over-spending by the USA's Military-Industrial-Complex, the bogus and equally insane USSR finally
bankrupted itself trying to "compete" and fell. Reagan (and his puppeteer handlers), always excellent
at Taking Credit for anything, showed up with exquisite cynical timing, and indeed Took Credit.
Lest anyone forget, Reagan got elected in 1980, via a totally illegal and stunningly immoral
"side deal" with the Iranians, in which they agreed to not release our hostages to make Carter
look like a feeble old man. Then we got Reagan who WAS a "feeble old man" (ESPECIALLY intellectually
and morally). Reagan "won," the hostages were "released" and he of course took credit for that
too.
So all these so-called "candidates" ARE the heirs of all the very worst of Ronald Reagan: they
are all simpleminded, they are totally beholden to Hidden Sociopathic Billionaires hiding behind
various curtains, and they all have NO CLUE what the word "ethics" means. Vacuous, anti-intellectual,
scheming, appealing only to morons, and puppets all. Perfect "Reaganites."
Bill Ehrhorn -> semper12 19 Sep 2015 13:32
It seems that the teabaggers and their ilk give only Reagan credit.
SigmetSue 19 Sep 2015 13:16
They called him the Teflon President because nothing ever stuck. It still doesn't. That was
his genius -- and I'm no fan.
Lattimore 19 Sep 2015 13:13
The article seems to present Reagan as an theatrical figure. I disagree. Reagan, President
of the United States, was a criminal; as such, he was among the most corrupt and anti democratic
person to hold the office POTUS. The fact that he tripled the national debt, raised taxes and
skewed the tax schedules to benifit the wealthy, are comparitively minor.
,,,
Reagan's crimes and anti democratic acts:
1. POTUS: CIA smuggling cocaine into the U.S., passing the drug to wholesalers, who then processed
the drug and distributed crack to Black communities. At the same time Reagan's "War on Crime"
insured that the Black youth who bought "Central Intelligenc Agencie's" cocaine were criminalized
and handed lengthy prison sentences.
2. POTUS supported SOUTH AMERICAN terrorist, and the genocidal atrocities commited by terrorist
in Chili, Guatamala, El Mazote, etc.
3. POTUS supported SOUTH AFRICAN apartheid, and the imprisonment of Nelson Mandela as well. Vetoing
a bill that would express condemnation of South Africa.
4. POTUS sold Arms to Iran.
5. POTUS used taxpayer dollars to influence election outcomes.
6. POTUS rigged government grants to enrich his cronies.
7. POTUS thew mental patients onto the streets.
8. POTUS supported McCarthyism, witch hunts, etc.
9. POTUS created and supported Islamic terrorist--fore runners of al Queada, ISIS, etc.
Niko2 LostintheUS 19 Sep 2015 13:12
I don't have much love for Nancy, but she did not break up this marriage, to be fair. And she
actually got rid off the extreme right wingers in Reagan's administration, like Haig and Regan,
whom she called "extra chromosome republicans". Surely she was a vain and greedy flotus with no
empathy whatsoever for people not in her Bel Air circles (I can easily imagine her, "Do I really
have to go and see these Aids-Babies, I'd rather shop at Rodeo Drive, lose the scheduler") but
she realized at an early stage that hubbies shtick-it-to-the-commies policies would do him no
favour. Maybe she's the unsung heroine of his presidency.
tommydog -> MtnClimber 19 Sep 2015 13:04
The principle subsidies to big oil are probably the strategic oil reserve and subsidies to
low income people for winter heating oil. You can choose which of those you'd like to cut. After
that you're arguing about whether exploration costs should be expensed in the year incurred or
capitalized and amortized over time.
WilliamK 19 Sep 2015 13:03
He was one of J Edgar Hoover's red baiting fascist admiring boys along with Richard Nixon and
Walt Disney used to destroy the labor unions, control the propaganda machine of Hollywood and
used to knuckle under the television networks and undermine as much as possible the New Deal polices
of Franklin Roosevelt. An actor groomed by the General Electric Corporation and their fellow travelers.
"Living better through electricity" was his mantra and he played the role of President to push
forward their right wing agenda. Now we are in new stage in our "political development" in America.
The era of the "reality television star" with Hollywood in bed with the military industrial complex,
selling guns, violence and sex to the fool hardy and their children and prime time television
ads push pharmaceutical drugs, children hear warnings of four hour erections, pop-stars flash
their tits and asses and a billionaire takes center stage as the media cashes in and goes along
for the ride. Yeah Ronnie was a second tier film star and with his little starlet Nancy by his
side become one of America's greatest salesman.
Backbutton 19 Sep 2015 12:57
LOL! Reagan was a walking script renderer, with lines written by others, and a phony because
he was just acting the part of POTUS. His speeches were all crafted, and he had good writers.
He was no Abraham Lincoln.
And now these morons running for office all want to rub off his "great communicator" fix.
Good help America!
Milwaukee Broad 19 Sep 2015 12:49
Ronald Reagan was an actor whom the depressingly overwhelming majority of American voters thought
was a messiah. They so believed in him that they re-elected him to a second term. Nothing positive
whatsoever became of his administration, yet he is still worshiped by millions of lost souls (conservatives).
Have a nice day.
Michael Williams 19 Sep 2015 12:48
The US was the world's leading creditor when Reagan took office. The US was the world's leading
debtor by the time Bush 1 was tossed out of office.
This is what Republicans cannot seem to remember.
All of the other scandals pale in comparison, even as we deal with the blowback from most of
these original, idiotic policies.
Reagan was an actor, mouthing words he barely understood, especially as his dementia progressed.
This is the exact reason the history is so poorly taught in the US.
People might make connections....
Jessica Roth 19 Sep 2015 12:46
Oh, he had holes in his brain long before the dementia. "Facts are stupid things", trees cause
pollution, and so on.
A pathetic turncoat who sold out his original party (the one that kept his dad in work throughout
the Great Depression via a series of WPA jobs) because Nancy allegedly "gave the best head in
Hollywood" and who believed that only 144,000 people were going to Heaven, presumably accounting
for his uncaring treatment of the less-well-off.
His administration was full of corruption, from Richard Allen's $1000 in an envelope (and three
wristwatches) that he claimed was an inappropriate gift for Mrs. Reagan he had "intercepted" and
then "forgotten" to report to William Casey trading over $3,000,000 worth of stocks while CIA
director. (Knowing about changes in the oil market ahead of time sure came in handy.) You had
an attorney general who took a $50,000 "severance payment" (never done before) from the board
of a corporation he resigned from to avoid conflict of interest charges and this was William French
Smith; his successor, Edwin Meese, was the one with real scandals (about the sale of his home).
Hell, Reagan himself put his ranch hand (Dennis LeBlanc) on the federal payroll as an "advisor"
to the Commerce Department. I didn't know the Commerce Dept needed "advice" on clearing wood from
St. Ronnie's ranch, but LeBlanc got a $58,500 salary out of the deal. (Roughly £98,000 at today's
prices.) Nice work if you can get it.
Meanwhile, RR "talked tough" at the Soviets (resulting in the world nearly ending in 1983 due
to a false alarm about a US nuclear attack) while propping up any rightwing dictator they could
find, from the South African racists to Ferdinand and Imelda Marcos (after they had Aquino assassinated
at the airport) to Roberto "Death Squad" D'Aubuisson in El Salvador (the man who masterminded
the assassination of Archbishop Romero while he was performing Mass).
Oh, and while Carter did a nice job of shooting himself in the foot, Reagan benefited in the
election not only from his treasonous dealings with the Iranian hostage-takers (shades of Nixon
making a deal with North Viet Nam to stall the peace talks until after the 1968 elections, promising
them better terms) but through more pedestrian means such as his campaign's stealing of Carter's
briefing book for the campaign's only debate, Reagan being coached for the debate by a supposedly
neutral journalist (George Will, of ABC and The Washington Post), who then went on television
afterwards (in the days when there were only three commercial channels) and "analysed" how successful
Reagan had been in executing his "game plan" and seeming "Presidential" without either Will or
ABC bothering to mention that Will had coached Reagan and designed the "game plan" in question.
The "liberal bias" in the media, no doubt.
Always a joke, only looking slightly better by the dross that has followed him. (Including
Bill "Third Way" Clinton and his over-£50,000,000 in post-Presidential "speaking fees" graft,
and Barack Obama, drone-murderer of children in over a dozen countries and serial-summary-executioner
of U.S. citizens. When Gordon-effing-Brown is the best that's held office on either side of the
Atlantic since 1979, you can see how this planet is in the state it's in.)
pretzelattack DukeofMelbourne 19 Sep 2015 12:45
his stand on russia was inconsistent, and he didn't cause it to collapse. his economic programs
were a failure. his foreign policy generally a disaster. he set the blueprint for the current
mess.
pretzelattack semper12 19 Sep 2015 12:38
a total crock. reagan let murdering thugs run rampant as long as they paid lip service to democracy,
the world over from africa to central america. the ussr watched this coward put 240 marines to
die in lebanon, and then cut and run, exactly the pattern he was so ready to condemn as treason
in others, and was so ready to portray as showing weakness, and you think the ussr was terrified
of him. he was a hollywood actor playing a role, and you bought it.
Tycho1961 19 Sep 2015 12:13
No President exists in a political vacuum. While he was in office, Reagan had a large Democrat
majority in the House of Representatives and a small Republican majority in the Senate. The Supreme
Court was firmly liberal. Whatever his political agenda Reagan knew he had to constructively engage
with people of both parties that were in opposition to him. If he didn't he would suffer the same
fate as Carter, marginalized by even his own party. His greatest strength was as a negotiator.
Reagan's greatest failures were when he tried to be clever and he and his advisors were found
to be rather ham handed about it.
RichardNYC 19 Sep 2015 11:57
The principal legacy of Ronald Reagan is the still prevalent view that corporate interests
supersede individual interests.
Harry Haff 19 Sep 2015 11:45
Reagan did many horrible things while in office, committed felonies and supported murderous
regimes in Central America that murdered tens of thousands of people with the blessing of the
US chief executive. he sold arms to Iran and despoiled the natural environment whenever possible.
But given those horrendous accomplishments, he could not now get a seat at the table with the
current GOP. He would be considered a RINO, that most stupid and inaccurate term, at best, and
a closet liberal somewhere down the line. The current GOP is more to the right than the politicians
in the South after the Civil War.
"... you will suffer metabolic injury so great that you will perish, as the cancer pumps out various toxins, like 'Free Market Fundamentalism', 'Western moral values' or 'Exceptionalism'. ..."
"... That is that the Rightwing Authoritarian Personality, or whatever other euphemism you care to use, suffer some or all of the well-known features of psychopathy ie the absence of human empathy and compassion, unbridled greed and narcissistic egomania, unscrupulousness and a preference for violence. ..."
"... From Obama down through Harper, Cameron, Abbott, Satanyahoo et al to the very dregs of politics and MSM propaganda, it is a vast field of human perfidy, differing only in the degree of their malevolence. ..."
Mulga Mumblebrain on September 17, 2015 · at 11:17 pm UTC
Erebus, that would be like trying to cage a cancer. If you do not then excise the cancer,
you will suffer metabolic injury so great that you will perish, as the cancer pumps out various
toxins, like 'Free Market Fundamentalism', 'Western moral values' or 'Exceptionalism'.
Cut the tumour out, plus the chemotherapy of somehow rescuing the non-malignant members of
the cancer societies from the inhuman habits inculcated in them from birth (ie gross materialism,
unbridled greed, cultural and racial superiority, addiction to crass 'tittietainment' etc) and
even a few escaping cancer cells can cause metastasis elsewhere.
What is really needed is a miracle, a 'spontaneous remission' where the individual cells in
the Western cancer suddenly transform themselves into non-malignant, human, organisms again. There
might be some good signs, such as the rise of Corbyn in the UK, the eclipse of Harper, the character
of Pope Francis, but there is a Hell of a way to go, and not much hope of success.
Mulga Mumblebrain on September 17, 2015 · at 11:07 pm UTC
David, I agree. The central problem facing humanity is that the planet has become dominated
by evil psychopaths. There is a mountain of literature that explains what one can see with one's
own eyes.
That is that the Rightwing Authoritarian Personality, or whatever other euphemism you care
to use, suffer some or all of the well-known features of psychopathy ie the absence of human empathy
and compassion, unbridled greed and narcissistic egomania, unscrupulousness and a preference for
violence.
The situation in the world today, geo-political, economic and ecological is a battle between
good and evil. Many people refuse to face that reality, because it is frightening, and presages
a dreadful global death struggle or the collapse of human civilization and probable species extinction.
But denying the hideous reality won't make it go away. What we have seen over recent decades in
Iraq, Libya, Syria, Congo etc is evil in action, and we had better acknowledge that reality.
From Obama down through Harper, Cameron, Abbott, Satanyahoo et al to the very dregs of
politics and MSM propaganda, it is a vast field of human perfidy, differing only in the degree
of their malevolence.
"... Nobody expected communism to fall apart in 1989, not a single person had any inkling what was coming, from within or without. For quite a long time previously it was wondered how it could keep on going, and it dutifully did until inertia had it's say. ..."
"... In many ways capitalism is the flipside of communism, and the latter kept us honest, but once we lost them as an arch-rival, what did we need honesty for anymore? ..."
"... The current diaspora ascending on Europe reminds me of when communism fell apart, the difference being that the bloc party then was thought of as a good thing. ..."
"... We've effectively taken over communism's role as being the dishonest player in terms of a rivalry, but there doesn't appear to be an honest rival anywhere, we're all the same now. ..."
Nobody expected communism to fall apart in 1989, not a single person had any inkling what
was coming, from within or without. For quite a long time previously it was wondered how it could
keep on going, and it dutifully did until inertia had it's say.
In many ways capitalism is the flipside of communism, and the latter kept us honest, but
once we lost them as an arch-rival, what did we need honesty for anymore?
lawyerliz wrote on Sat, 8/29/2015 - 5:45 am (in reply to...)
Yes we need an honorable enemy/rival. I don't think it will be China, but perhaps India could
make an honorable frenemy. I like Indians and we have Britain in common.
Jackdawracy wrote on Sat, 8/29/2015 - 5:47 am
The current diaspora ascending on Europe reminds me of when communism fell apart, the difference
being that the bloc party then was thought of as a good thing.
Jackdawracy wrote on Sat, 8/29/2015 - 5:49 am (in reply to...)
We've effectively taken over communism's role as being the dishonest player in terms of
a rivalry, but there doesn't appear to be an honest rival anywhere, we're all the same now.
Jackdawracy wrote on Sat, 8/29/2015 - 5:57 am (in reply to...)
Without a rivalry, the space race never gets off the ground. Liftoff would be a word with no
meaning whatsoever.
Folks in Florida right now would have an inkling of a hurricane coming from the Caribbean,
but have no idea the direction, speed, etc.
dilbert dogbert wrote on Sat, 8/29/2015 - 6:03 am (in reply to...)
Jackdawracy wrote:
In many ways capitalism is the flipside of communism, and the latter kept us honest,
but once we lost them as an arch-rival, what did we need honesty for anymore?
Been reading others making the same point. Unrestrained Capitalism, just like unrestrained
compound interest spirals out of control.
I for one welcome our new Unrestrained Capitalist Overlords!!! PS: Rents are still too damned
low!!! Impeach Now!!!
"... The buck is constantly and systematically passed to those least able to carry it large-scale problems (e.g. national debts) are sent down the pipeline to smaller units; devolution without the resources to implement it, combined with competition for resources, choices without resources, responsibility without power, power without structure. ..."
"... "See-Judge-Act" ..."
"... resistance have happened over the last 5 years or so views about how effective they have been vary. But as Christians, we are called to show solidarity with those who resist a dehumanising and very powerful status quo. ..."
"... And, above all, we should recognise that a very small space in which to act is not no space at all challenging TINA that neoliberalism is the only view on the block is itself action of a kind sometimes opening up a space opens up new possibilities. What we shouldn‟t so, at least, is to close them down! ..."
Mar 07, 2015 | Diocese of Liverpool
Introduction: When is an economy not an economy? When it's a caravan park!
Sources Chicago School of Economics (Friedman and Hayek) also German ordoliberalism‟.
First use of the word probably Freidman 1951 essay Neoliberalism and its Prospects.
They DIFFERED but the development of their views has become the economic status quo since
the 1980s TINA‟ there is no alternative.‟
Ironic from the 1930s to the 1950s, its theorists were dismissed by mainstream economic
thinking as cranks and mavericks
How did it get to be so influential? Interesting one analysis - rugby match‟ analysis
the think tanks passed to the journalists, who passed to the politicians, who with aid from the
think tanks run with it and score.‟
You won‟t see the term much although the Guardian uses it! you might see free market,‟
or "competition" but even if we don‟t know the term, neo-liberalism has become so much the norm
we don‟t even notice it David Harvey: Neo-liberalism has become incorporated into the common
sense way many of us live in, interpret and understand the world.‟ (A Brief History of Neo-Liberalism,
p 3)
But it isn‟t inevitable, natural or constructed and many projects of practical compassion
in parishes are in response to its direct results.
So the first thing is to detach from it and NOTICE it name the beast!
So What is It? Several key elements to what Neoliberalism is:
It affirms, above all else, the rule of the market1 - that means the unrestricted movement
of capital, goods and services.
The market is self-regulating‟ in terms of the distribution of wealth more wealth in the
system is supposed to equal more wealth for all wealth distribution falls out of the system,
and in theory, there is a trickle down‟ of wealth distribution.
The de-regulation of labour - e.g., de-unionization of labour forces, and end to wage controls.
The removal of any impediment to the moving of capital such as regulations.
Reducing public expenditure and in particular for utilities, common goods (water), and social
services, such as transport, health and education, by the government
Privatization of the above of everything from water to the Internet
Increasing deregulation of the market, and allowing market forces to regulate themselves.
Changing perceptions of public and community good to individualism and individual responsibility.
Behind these features are a series of underlying assumed principles an ideology of neo-liberalism:
2
Sustained economic growth is good in itself and the best way to human progress
Free markets would be the most efficient and socially optimal allocation of resources
Globalization is a good thing beneficial to everyone
Privatization removes the inefficiencies of the public sector.
Governments‟ main functions should be to provide the infra structure to advance the rule of
law with respect to property rights and contracts and to ensure the market remains competitive.
So What's Wrong with it?
It is internally contradictory
There is no such thing as a free market
Even the original neoliberals recognise this competition regulates the market there
is no one view of what "competitive" is
The ordoliberals certainly recognise it role of government to create the perfectly
competitive market
The view taken of competition based on price tends to monopolies, a "race to the bottom,"
and uniformity (Amazon, Sky, Apple )
Its effects are not as the theory predicted, and have often been damaging:
There has been no "trickle down" effect of wealth (in fact, wealth has redistributed upwards)
It has entailed much "creative destruction" of institutional frameworks and powers, divisions
of labour social relations, attachments to the land and habits of the heart.‟ (David Harvey,
Short History of Neo-Liberalism, p 3)
It has pushed, and is pushing, the reach of the market into ever more spheres of human
life, the saturation of the state, political culture and the social with market rationality.‟
(Wendy Brown: American Nightmare: Neoliberalism, Neoconservatism and De-Democratization
(Political Theory 34 (2006), p 695)
It has a view of human beings as 'specks of human capital,' who can be 'plugged in'
to markets of various kinds, (or who plug themselves in)
the hero of neoliberalism is the entrepreneur we are all becoming more and more required
to be entrepreneurs of the self‟ to invest in ourselves/make something of ourselves, cultivate
and care for‟ ourselves and, increasingly measure our performance.
The caravan park analogy we are required to plug ourselves in‟ to pay the price of
doing so, and to accept the cost.
Our belonging‟ becomes passive plugging in rather than active participation.
Traditional forms of solidarity are wiped out.
Specks of human capital are eminently sacrificable, even if they have done all the right
things‟ there are no guarantees, and individuals are expected to bear the risk of their entrepreneurial
activity themselves (investing many hours in training‟ and upskilling,‟ often with no financial
or institutional support and with no guarantee of better employment practices i.e. gain (more
skilled workforce) is privatized and risk is distributed downwards, labour is bound and capital
released.
Austerity politics is the natural outcome of this people are told virtue is sacrifice
for the sake of a productive economy, but with no protection.
Despite opposition to big government,‟ isolated and vulnerable individuals are eminently
governable, subject to new forms of power whilst having smaller and
smaller spaces in which to resist it. People are easily integrated into a project that
is quite prepared to sacrifice them.
So why is it bad for all of us?
It has redistributed wealth upwards. Most extreme effects seen amongst the most vulnerable
but many people are feeling the pinch in the middle. Cultural expression of neoliberalism encourages
those in the middle to aspire‟ upwards and demonises the most vulnerable. Not good for the
soul, even of those relatively comfortable!
An economy is not a caravan park that we plug into but a household (oeconomia) that we belong
to with solidarities and mutuality built in some of them unchosen. Neoliberalism cuts us off
from belonging in a way that allows us to flourish.
Its promotion of economic growth as the only good inevitably means economies built on debt
and austerity
To see people as sacrificeable specks of human capital means they are governable, isolated
and vulnerable and the isolation and vulnerability is spreading upwards in society too (it takes
on average a year after graduation for a graduate from a "good" university to get a job)
The buck is constantly and systematically passed to those least able to carry it large-scale
problems (e.g. national debts) are sent down the pipeline to smaller units; devolution without
the resources to implement it, combined with competition for resources, choices without resources,
responsibility without power, power without structure.
Dependency is denigrated and independence moralized the most vulnerable are burdened morally
with failing to follow the correct processes of capital development
Lack of trust erodes community life and social relations
Physical and mental health are affected and not just for those who are poorest, but for
those in the middle and even those at the top (see Richard Wilson and Kate Pickett:
The Spirit Level: Why Equality is Better for Everybody London, Penguin 2009)
Education becomes narrow and instrumental
In some ways, those in the deepest peril are those who benefit from neoliberalism for what
will it profit them if they gain the whole world but forfeit their soul‟ (Matthew 16.26)
So what is to be done?
"See-Judge-Act"
SEE - We first need to SEE it to name the beast - that the issues we confront daily
in parishes, in our everyday lives, and in the news do not arise by accident or as a result of
unfortunate circumstances, or the distorting lens of the media but from the systematic application
of a particular, and very far-reaching economic theory.
JUDGE means unpicking the assumptions, watching how the ball curves; it means not just
coming up with concrete examples from our own circumstances, but relating them to the macro‟
level seeing how they result from larger structures and assumptions
JUDGE also means reflecting theologically on all this in the light of scripture and
tradition.
ACT is harder so what is to be done? It can seem impossible to do anything!
However the very act of noticing is important. Neoliberalism‟s power derives partly from
its invisibility we need to notice that it is happening. Various forms of
resistance have happened over the last 5 years or so views about how effective they
have been vary. But as Christians, we are called to show solidarity with those who resist a dehumanising
and very powerful status quo.
We can and should continue to be involved in projects of practical compassion and alongside
doing them, make connections with the bigger picture.
We can recognise our own complicity in neoliberalism and disassociate from it, at least
with our heads.
We can ask critical questions whenever we have the opportunity to do so.
And, above all, we should recognise that a very small space in which to act is not no
space at all challenging TINA that neoliberalism is the only view on the block is itself action
of a kind sometimes opening up a space opens up new possibilities. What we shouldn‟t so, at
least, is to close them down!
Justice will dwell in the wilderness, and righteousness abide in the fruitful field. The effect
of righteousness will be peace, and the result of righteousness quietness and trust forever. My people
will abide in a peaceful habitation, in secure dwellings, in quite resting places. (Isaiah 32.16-18)
Further Reading:
Zygmunt Bauman: Liquid Modernity (Cambridge, Polity Press 2000)
Ha-Joon Chang: 23 Things they don't tell you about capitalism (London, Penguin 2011)
"... the great schism inside the American labor force get wider. We are referring to the unprecedented divergence between the total number of high-paying manufacturing jobs, and minimum-wage food service and drinking places jobs, also known as waiters and bartenders. In October, according to the BLS, while the number of people employed by "food services and drinking places" rose by another 18,900, the US workforce lost another 4,000 manufacturing workers. ..."
"... National Restaurant Association's Restaurant performance activity index showed in October, overall industry sentiment is the worst since the financial crisis, due to declines in both same-store sales and customer traffic, suggesting that restaurant workers should now be in the line of fire for mass layoffs. ..."
"... Putting this divergence in a long context, since the official start of the last recession in December 2007, the US has gained 1.8 million waiters and bartenders, and lost 1.5 million manufacturing workers. Worse, while the latter series had been growing, if at a slower pace than historically, it has now clearly rolled over, and in 2016, some 60,000 manufacturing jobs have been lost. ..."
As another month passes, the great schism inside the American labor force get wider. We are
referring to the unprecedented divergence between the total number of high-paying manufacturing jobs,
and minimum-wage food service and drinking places jobs, also known as waiters and bartenders. In
October, according to the BLS, while the number of people employed by "food services and drinking
places" rose by another 18,900, the US workforce lost another 4,000 manufacturing workers.
This is the fourth consecutive month of declining manufacturing workers, and the 7th decline in
the past 10 months.
The chart below puts this in context: since 2014, the US had added 571,000 waiters and bartenders,
and has lost 34,000 manufacturing workers.
While we would be the first to congratulate the new American waiter and bartender class, something
does not smell quite right. On one hand, there has been a spike in recent restaurant bankruptcies
or mass closures (Logan's, Fox and Hound, Bob Evans), which has failed to reflect in the government
report. On the other hand, as the National Restaurant Association's Restaurant performance activity
index showed in October, overall industry sentiment is the worst since the financial crisis, due
to declines in both same-store sales and customer traffic, suggesting that restaurant workers should
now be in the line of fire for mass layoffs.
However, what we find more suspect, is that according to the BLS' seasonally adjusted "data",
starting in March of 2010 and continuing through September of 2016, there has been just one month
in which restaurant workers lost jobs, and alternatively, jobs for waiters and bartenders have increased
in 80 out of the past 81 months, with just one month of job losses, something unprecedented in this
series history.
Putting this divergence in a long context, since the official start of the last recession
in December 2007, the US has gained 1.8 million waiters and bartenders, and lost 1.5 million manufacturing
workers. Worse, while the latter series had been growing, if at a slower pace than historically,
it has now clearly rolled over, and in 2016, some 60,000 manufacturing jobs have been lost.
Like last month, we remain curious what this "data" series will look like after it is revised
by the BLS shortly after the NBER declares the official start of the next recession.
"... The incomes of the financial sector are mostly pure rents so there are fewer gains from trade possible here than there are for more productive sectors. Trade negotiations on this are therefore more 'win-lose' rather than potentially 'win-win'. ..."
T's right the economic impact of Brexit on the UK will overwhelmingly depend on how the EU "passport"
entitlements for the banks are negotiated. And of course the Germans (with Frankfurt) and the
French (with Paris) have a strong incentive to make sure that a good slab of the City's business
goes to them.
The incomes of the financial sector are mostly pure rents so there are fewer gains from trade
possible here than there are for more productive sectors. Trade negotiations on this are therefore
more 'win-lose' rather than potentially 'win-win'.
I think the result will certainly be lower aggregate GDP for the UK but it might well be better
distributed (eg London property prices may be less absurd). The City has long made the rest of
the UK economy suffer from a form of Dutch disease through an overvalued pound sterling. So those
Sunderland Brexit voters might prove ultimately correct in their assessment of their economic
interests just not in the way they think.
"... Neoliberalism marches on in the centre-left critique of Brexit: Brexit's political motivation is a racist nationalism, there is no good or practical alternative to the EU and its four freedoms of unmanaged movements of capital, people, goods. ..."
"... The essence of left neoliberalism was the collaboration of the educated, credentialed managerial classes in the plutocratic project and the abandonment of the cause of defending what used to be called the working classes and the poor from predatory capital. ..."
"... the neoliberal trap in which what passes for left politics ..."
"... Brexit may never happen or its management may be taken over by other hands in a further reversal of political fortune on one side or the other of the Channel. A Eurozone collapse can scarcely be ruled out as Italy crumbles and France chooses between a proud neoliberal unaware of that collapse thingee and a right-wing of the old school. That would create opportunities I can scarcely imagine; there might be an alternative after all. ..."
"... [I]inequality is deadly for democracy, and for the equal political status of citizens. Because the power and influence high earners derive from their income threatens such status equality, there is a strong public interest in constraining it, even if doing so raises no money at all ..."
"... "Chauvinism" is a good thought, but you can see the problem. You read all manner of implications into "tribalism" that I don't see at all, but want to read fifty years or so of usage out of "chauvinism". ..."
"... Well neo-liberalism worked for some. Guess you had to be in early enough. I wonder if Paris or Frankfurt will allow its banking jobs to be outsourced to India? ..."
I think there's a real risk of confusing two things: on the one hand, ideology, on the other a
mechanism for mobilizing political and electoral support.
Neoliberalism may be a smoking ruin intellectually, but it remains the default ideology today
across most of the political spectrum, for lack of an articulated alternative. But it's not a
good way to mobilize electoral support ("vote for me and I'll outsource your job to India"). Historically,
that mobilizing role was played by divisions of wealth and power, but with the end of class politics,
the only obvious alternative is tribalism, or whatever we want to call it, with it's message "I
represent your group interests, vote for me." On the "right" this manifests itself through the
tribalism of tradition, language, culture etc; on the "left" through the tribalism of identity
politics. You can't really construct functioning political parties around purely abstract ideas
(tolerance, for example) you need voters. This was perfectly well demonstrated by the Clinton
election campaign, where the ideology was neoliberal, but the mobilizing device was tribalism
("you are X therefore you should vote for me").
Much of the confusion in contemporary politics, therefore, results from competitive attempts
to foist tribal identities on people, and the resistance of potential voters to this tactic. Now,
traditional mobilizing factors did have the virtue of clarity; you were objectively poor, unemployed,
property-owning, share-owning or whatever, and it was fairly obvious what the consequences of
voting for this or that party would be. In the new dispensation, the "right" is doing better at
this game at the moment than the "left" because its tribal markers (language, history, nation
etc.), whilst not uncontested or unproblematic, mean more to people than the race and gender-based
markers of the "left". Someone with black skin may not feel that that defines the way they should
vote, in preference to say, their economic interests. This is why in France, for example, the
Socialists have effectively lost an increasingly prosperous and predominantly socially conservative
immigrant vote to the Right.
"Brexit is just a symptom of growing resistance to neoliberalism, and the loss of power
of neoliberal propaganda."
Broadly agree. After all, neoliberalism (and its child, globalization) was created and is enforced
by nations, and its destruction, if that happens, must begin at the national level. My own, totally
unrealistic, hope is that if Brexit looks like happening and similar things follow elsewhere,
the EU will be frightened enough that some of the neoliberal poison will seep out, and Europe
will go back to being what it was, and always should have been. Some hope.
"Apparently, the conservative government has now abandoned its plans for further austerity
and a balanced budget. It is expected to spend an additional $187 billion over the next five years
(roughly 1.0 percent of GDP) to boost the economy and create jobs. According to the NYT, this
spending is a direct response to concerns over the plight of working class people who voted for
Brexit in large numbers.
This outcome is worth noting, because the boost to the economy from additional spending is
likely to be larger than any drag on growth as a result of leaving the European Union. This would
mean that the net effect of Brexit on growth would be positive. Of course the UK government could
have abandoned its austerity path without Brexit, but probably would not have done so. Given the
political context, working class voters who wanted to see more jobs and a stronger welfare state
likely made the right vote by supporting Brexit. This doesn't excuse the racist sentiments that
motivated many Brexit supporters, but it is important to recognize the economic story here.
There is a deeper lesson in this story. The elites that derided Brexit were largely content
with austerity policies that needlessly kept workers from getting jobs and also weakened the welfare
state. Many were willing to push nonsense economic projections of recession in order to advance
their political agenda. In this context, it is not surprising that large numbers of working class
people would reject their argument that Brexit would be bad for the UK."
Rather than rehash
my objections to "tribalism" as far as the racialized and imperialist connotations of the
term itself, drawing off of likbez @ 6 and the recent sociobiology/evopsych thread, here's another
objection: to the extent that it relies on a vague idea of modern far-right nationalism as just
a modern manifestation of some deeper general human tendency toward ingroup/outgroup moral reasoning,
it goes much too far in naturalizing far-right nationalism, making it out to be a core
aspect of immutable human nature instead of the historically contingent political and economic
phenomenon it is. (Cf.
Kevin Drum's misapprehension of the term "white supremacy" , which doesn't refer to any abstract
idea that white people are or should be superior, but the historical reality of their tangible
efforts to create and maintain a superior material position.) On a certain level fascists are
fascists because they perceive the subjugation of other races and nationalities to be in their
interest based on their understanding of how global capitalist society works, and in some sense
their understanding of the subjugation and domination necessary for capitalism to function is
much clearer than the understanding of a proverbial "bleeding-heart liberal".
Accordingly, the ideological implication of "tribalism" that the guards at Auschwitz were doing
fundamentally the same thing as the chimpanzees in 2001: A Space Odyssey , resembles what
some old bearded leftist once described as an effort "to present production as encased in eternal
natural laws independent of history, at which opportunity bourgeois relations are then quietly
smuggled in as the inviolable natural laws on which society in the abstract is founded". No, fascism
isn't inevitable, or at least it's only inevitable as long as capitalism is too.
JQ: "I don't know how I could have been clearer that the current upsurge of tribalism is
a historically contingent political and economic phenomenon arising from the collapse of neoliberalism."
Saying "the current upsurge of tribalism" isn't the same thing as saying "tribalism". The implication
of the former is that tribalism has been here all along under the surface and our modern historical
moment isn't creating it so much as uncovering it, with the "it" in question implied
to be something premodern and primitive to which we're returning or even regressing. At best it's
a vague and partial metaphor that needs to be closely monitored to avoid implying any deeper comparison,
and if it's intended in any way as a pejorative, it works via our perception of something inherently
wrong or even evil about "primitive" modes of social existence, something that demands a unilateral
civilizing intervention by the enlightened imperialists of the mind. If you're really searching
for a proper response to "tribalism", the ideology embedded in the term "tribalism" seems to itself
imply the very same kind of paternalist liberal response you otherwise seem to rightly abhor.
Here's a thought: why not "chauvinism"? Just because in recent years it's widely become shorthand
for "male chauvinism", don't forget it was originally coined for excessive and potentially bigoted
nationalism, after a (likely apocryphal) Napoleonic-era French soldier named Nicolas Chauvin.
As far as historical allusions for a tendency claimed to encompass everyone from Hitler to George
Wallace to Donald Trump, using a word derived from the dictatorial personality-cultish nationalist
reaction to the first true modern universalist revolution seems to be on solid ground, especially
compared to a word that implies continuity between racist oppression in modern nation-states and
the alleged backward savagery of the very populations being oppressed.
John Quiggin 11.29.16 at 7:41 pm
"Chauvinism" is a good thought, but you can see the problem. You read all manner of implications
into "tribalism" that I don't see at all, but want to read fifty years or so of usage out of "chauvinism".
Trying Google, I find that just about all the top hits for "tribalism" are in the sense I use,
and nearly all of the top hits for "chauvinism" are associated with male chauvinism, even in some
dictionary definitions.
Brexit has not been defined in any detail, so calling for speculation is inviting any and all
kinds of counterfactual speculative projection. That may be interesting, to the extent it reveals
worldview or even more theoretical presupposition. But, what I get from the OP and many of the
comments is that neoliberalism has not collapsed at all.
Neoliberalism marches on in the centre-left critique of Brexit: Brexit's political motivation
is a racist nationalism, there is no good or practical alternative to the EU and its four freedoms
of unmanaged movements of capital, people, goods.
The great difficulty of renegotiating the Gordian knot of regulation tying the EU together
looms large, as it would for the socio-economic class of people tasked with creating and recreating
these sorts of systems, systems of finance, administrative process and supply chain that loom
so large in our globalised economy - pay no attention to the sclerosis, please! How will we get
visas?!?
The deep and persistent poverty that scars England and the struggles of local displacement
that shadow the fantastic globalised wealth imported into the core of the Great Metropolis are
mentioned by a few commenters as a dissent (my interpretation, alternative welcome). There is
in this leftish discussion little skepticism expressed about how healthy it is that the UK is
so invested in global and European finance. What is engaged is scorn for the idea of a Tory social
conscience. (I have never seen one myself.) But what goes unmentioned is the absence of a Left
economic conscience.
Which brings me back around to question the ostensible premise of the OP, the alleged collapse
of neoliberalism. What has collapsed politically - as any reader of news headlines must surely
know - is the social democratic left. (USA, France, Italy at any moment)
The essence of left neoliberalism was the collaboration of the educated, credentialed managerial
classes in the plutocratic project and the abandonment of the cause of defending what used to
be called the working classes and the poor from predatory capital. I do not yet see the left
critique of Brexit departing from either the collaboration or the abandonment. In British politics,
the continuing civil war in the Labour Party between the old leftists and the new membership on
the one hand and the Blairite careerists in the PLP and their supporters among the cosmopolitans
would seem to furnish a stark illustration of how disabled the left is at this juncture, mere
spectators as a weak Tory Party bungles its way forward unimpeded.
Mumbling about "tribalism" says more about the neoliberal trap in which what passes for
left politics appears fatally trapped than it does about right populism.
Sure, we want to shout "fascism" but if this is the second coming of that incoherent political
tendency, it is even more farce than it was the first time around.
This very weak tea populism that is Trump or May's one nation conservatism redux is only possible,
imho, because there is no left populism to compete credibly for those "working class" constituencies,
whose political worldviews and attitudes are - shall we say, unsophisticated? Rather than compete
for the loyalty of those authoritarian followers (to use a term from political psychology), the
left organizes its own form of "tribal" identity politics around scorning them as a morally alien
out-group. And, the new (alt?) right leverages the evidence of class contempt and so on for their
own populist mobilization.
This right is not very credible as populists, but it is a matter of out running a bear in the
woods the bear is the loss of elite legitimacy and it has only been necessary to outrun the
left, which so far will not even tie its shoes.
Brexit may never happen or its management may be taken over by other hands in a further
reversal of political fortune on one side or the other of the Channel. A Eurozone collapse can
scarcely be ruled out as Italy crumbles and France chooses between a proud neoliberal unaware
of that collapse thingee and a right-wing of the old school. That would create opportunities I
can scarcely imagine; there might be an alternative after all.
SamChevre 11.29.16 at 9:42 pm
Discussions of Brexit, and its economic effects, continues to remind me of this Chris Bertram
post from 2014.
[I]inequality is deadly for democracy, and for the equal political status of citizens.
Because the power and influence high earners derive from their income threatens such status equality,
there is a strong public interest in constraining it, even if doing so raises no money at all .[W]e
need to shift the balance of voice in favour of the unemployed teenager and against the City trader.
Maybe not just the social democratic left. Maybe the whole left. This whole capitalist experiment
is so new, historically speaking (in its industrialised form only going back a few centuries)
we simply have no idea how it will play out long-term. Maybe what we have known as 'the left'
was simply a 'reactive formation' to initial stages of capitalism, facilitated by wars and the
early,' factory' model of capitalism. Maybe in our 'post-modern' era of capitalism (which might,
after all, last for centuries), with low unionisation, high unemployment/underemployment, massive
income inequality, slow growth, and a 'bread and circuses' media, the left simply no longer has
any political role.
After all, the collapse of the social democratic left follows in the wake of the collapse of
the radical left in the 1980s and 1990s, which (despite occasional 'dead cat bounces' as we have
seen in Greece and Spain) shows no sign of returning. And the centre (e.g. the LibDems in the
UK) died a long time ago.
As Owen Jones has been amongst the few to point out perhaps the future of Europe lies in Poland
where the left and centre have simply ceased to exist, and all of political life consists of neo-Thatcherites
fighting ethno-nationalists for a slice of the political pie.
Helen 11.29.16 at 10:07 pm
"Chauvinism" is a good thought, but you can see the problem. You read all manner of implications
into "tribalism" that I don't see at all, but want to read fifty years or so of usage out of "chauvinism".
Trying Google, I find that just about all the top hits for "tribalism" are in the sense I use,
and nearly all of the top hits for "chauvinism" are associated with male chauvinism, even in some
dictionary definitions.
Well neo-liberalism worked for some. Guess you had to be in early enough. I wonder if Paris
or Frankfurt will allow its banking jobs to be outsourced to India?
In the US, the pres-elect has just nominated a health secretary who is for killing Obamacare
while Trump's party is talking about privatizing (thereby killing) Medicare. So much for the complete
death of neo-liberlism JQ. There's always time for one final looting.
WLGR 11.29.16 at 10:30 pm
Point taken, although if we're taking our intellectual cues from mainstream definitions now,
someone should notify the laypeople confused about non-mainstream scholarly definitions of words
like "liberalism" and "racism" that they were actually right all along. From my understanding,
the typical scholarly view of "tribe" as a concept ranges from vague and essentialist on one end
(cf. "feudalism") to a racism-tinged pejorative on the other end (cf. "savage"), and in neither
case is it considered particularly respectable to deliberately orient a theory of human society
around the distinction between what is or isn't "tribal".
But if you're not necessarily convinced that the term "tribalism" is offensive in itself, another
line of attack might resemble
this :
The instinct to explain the seemingly inexplicable rise of Trump by blaming a foreign influenceor
likening it to something from non-white or Slavic countriesis as lazy as it is subtly racist.
Trump is Trump. Trump is American. His bigotry, his xenophobia, his sexism, his contempt for
the media, his desire to round up undesirables, all have American origins and American explanations.
They don't need to be "like" anything else. They are like us. While acknowledging this may
be uncomfortable, doing so would go a lot further in combating Trump than treating him as anomalous
or comparable only to those poor, backwards foreigners.
In other words, even if we assume there's nothing inherently problematic about calling groups
like the Sioux or the Igbo "tribes" (although tellingly enough it's more common for such groups
to self-identify with the term "nation") the very act of casting fascists/ethnonationalists/whatevers
in terms of a foreign type of social organization acts as a means of disavowal, intentionally
or unintentionally letting ourselves off the hook for the extent to which the evil they express
is entirely that of our own society. Which, I might add, at least somewhat resembles the ideological
maneuver of the fascists/ethnonationalists/whatevers themselves: casting the antagonism and instability
inherent to any capitalist society as the result of a foreign intruder, whose removal will render
the nation peaceful and harmonious once again. Obviously the two aren't comparable in many other
ways, but the end result in either case is to avoid facing the immanent contradictions of one's
own national identity too directly.
The number of subprime auto loans sinking into delinquency hit their highest level since
2010 in the third quarter, with roughly 6 million individuals at least 90 days late on their
payments.
It's behavior much like that seen in the months heading into the 2007-2009 recession,
according to data from Federal Reserve Bank of New York researchers.
"The worsening in the delinquency rate of subprime auto loans is pronounced, with a
notable increase during the past few years," the researchers, led by Andrew Haughwout, said
Wednesday in a
blog on their Liberty Street Economics site
.
There is no economics, only political economy. That means that financial oligarchy under liberalism
puts the political pressure and takes measures to have the final say as for who occupy top academic
positions.
Indirect negative selection under neoliberalism (much like in the USSR) occurs on multiple
fronts, but especially via academic schools and indoctrination of students. The proper term for
political pressure of science and creating an academic school that suppressed other is Lysenkoism.
So far this term was not mentioned even once here. But this what we have in the USA. Of course
there are some dissidents, some of them quite vocal, but in no way they can get to the level of
even a department chair.
In best traditions of Lysenkoism such people as Greg Mankiw, Krugman, DeLong and Summers after
getting to their lucrative positions can do tremendous, lasting decades damage. The same is true
for all other prominent neoliberal economists. It's not even about answers given, it is about
questions asked and framework and terminology used.
Fish rots from the head. It is important to understand that essentially the same game (with
minor variations, and far worse remuneration for sycophantism ) was played in the USSR -- the
Communist Party essentially dictated all top academic position assignments, so mostly despicable
sycophants had managed to raise to the top in this environment. Some people who can well mask
their views under the disguise of formal obedience also happened, but were extremely rare. Situation
in the past in the USA was better and such people as Hyman Minsky (who died in 1996) while not
promoted were not actively suppressed either. But He spend only the last decade of his career
under neoliberal regime.
What was really funny, is how quickly in late 80th prominent USSR economists switched to neoliberalism
when the wind (and money) start flowing in this direction.
I would suggest that there are non are trivial links between Soviet political and economic
science and neoclassical economics in the USA -- both are flavors of Lysenkoism.
"... mazamascience.com/oilexport and the BP bible says 2015 oil consumption growth in China was +5%. There is no continue to decline. And they have 21 million more cars this year burning oil. How can there be much decline, at all? ..."
"... Just checked EIA. No evidence of any significant fall in US consumption. It will probably rise. Indian consumption was +7% last year. No real evidence of a global drop in consumption. Population grows. So why is this surprising? ..."
Here is the sort of stuff going on. Some stuff profoundly right. Some stuff completely, factually
wrong. Final paras from a ZH article:
In sum, OPEC has so far managed to fool the market,
and send the price of oil surging off all time lows hit in early 2016 even as OPEC output has
reached record highs, and the just concluded deal may end up eliminating just a small fraction
of this excess supply.
All true.
There is also risk that demand most notably out of China will continue to decline, delaying
the so-called market equilibrium even assuming full OPEC and non-OPEC compliance.
mazamascience.com/oilexport and the BP bible says 2015 oil consumption growth in China was
+5%. There is no continue to decline. And they have 21 million more cars this year burning oil.
How can there be much decline, at all?
And, courtesy of Modi's ridiculous "demonetization" attempt, India's economic outlook is
suddenly in jeopardy: should Indian oil import demand decline as a result, OPEC will have to double
its daily production cuts just to catch up to the drop in global demand.
Just checked EIA. No evidence of any significant fall in US consumption. It will probably rise.
Indian consumption was +7% last year. No real evidence of a global drop in consumption. Population
grows. So why is this surprising?
Perhaps the best forecast at this point is that the price of oil will remain rangebound
between $45 and $55. Below that and more jawboning will emerge; above it and concerns about shale
output will dominate.
That's not best. They are all equally worthless.
Finally, it is safe to say that this is OPEC's final attempt to prove it is still relevant
in a shale-driven world after the "2014 Thanksgiving massacre" when Saudi Arabia essentially unilaterally
crushed the organization, and the price of oil. Should OPEC blow this, it will likely be game
over for any future attempts to artificially prop up the oil price by the world's oil exporters.
"It's not unreasonable for people who paid into a system for decades to expect to get their
money's worth - that's not an "entitlement," that's honoring a deal. We as a society must also
make an ironclad commitment to providing a safety net for those who can't make one for themselves."
This view is also not compatible with classic neoliberalism.
The reasons for the election of Donald Trump as President of the U.S. will be analyzed and argued
about for many years to come. Undoubtedly there are U.S.-specific factors that are relevant, such
as racial divisions in voting patterns. But the election took place after the British vote to withdraw
from the European Union and the rise to power of conservative politicians in continental Europe,
so it is reasonable to ask whether globalization bears any responsibility.
Have foreign workers taken the jobs of U.S. workers? Increased trade does lead to a reallocation
of resources, as a country increases its output in those sectors where it has an advantage while
cutting back production in other sectors. Resources should flow from the latter to the former, but
in reality it can be difficult to switch employment across sectors.
Daron Acemoglu and David Autor of MIT,
David Dorn of the University of Zurich, Gordon Hanson of UC-San Diego and Brendan Price of MIT
have found that import competition from China after 2000 contributed to reductions in U.S. manufacturing
employment and weak U.S. job growth. They estimated manufacturing job losses due to Chinese competition
of 2.0 2.4 million.
Other studies
find similar results for workers who do not have high school degrees.
Moreover, multinational firms do shift production across borders in response to lower wages, among
other factors.
Ann E. Harrison of UC-Berkeley and Margaret S. McMillan of Tufts University looked at the hiring
practices of the foreign affiliates of U.S. firms during the period of 1977 to 1999. They found that
lower wages in affiliate countries where the employees were substitutes for U.S. workers led to more
employment in those countries but reductions in employment in the U.S. However, when employment across
geographical locations is complementary for firms that do significantly different work at home and
abroad, domestic and foreign employment rise and fall together.
Imports and foreign production, therefore, have had an impact on manufacturing employment in the
U.S. But several caveats should be raised. First, as
Erik Brynjolfsson and Andrew McAfee of MIT and others have pointed out, technology has had a
much larger effect on jobs. The U.S. is the second largest global producer of manufactured goods,
but these products are being made in plants that employ fewer workers than they did in the past.
Many of the lost jobs simply do not exist any more. Second, the U.S. exports goods and services as
well as purchases them. Among the manufactured goods that account for significant shares of U.S.
exports are
machines
and engines, electronic equipment and aircraft . Third, there is inward FDI as well as outward,
and the foreign-based firms hire U.S. workers. A 2013
Congressional Research Service
study by James V. Jackson reported that by year-end 2011 foreign firms employed 6.1 million Americans,
and 37% of this employment-2.3 million jobs-was in the manufacturing sector.
More recent data
shows that employment by the U.S. affiliates of multinational companies rose to 6.4 million in
2014. Mr. Trump will find himself in a difficult position if he threatens to shut down trade and
investment with countries that both import from the U.S. and invest here.
The other form of globalization that drew Trump's derision was immigration. Most of his ire focused
on those who had entered the U.S. illegally. However, in a speech in Arizona he said that he would
set up a commission that would
roll back the number of legal migrants to "historic norms."
The
current number of immigrants (42 million) represents around 13% of the U.S. population, and 16%
of the labor force. An increase in the number of foreign-born workers depresses the wages of some
native-born workers, principally high-school dropouts, as well as other migrants who arrived earlier.
But there are other, more significant reasons for the
stagnation in
working-class wages . In addition, a reduction in the number of migrant laborers would raise
the ratio of young and retired people to workers-the dependency ratio-and endanger the financing
of Social Security and Medicare. And by increasing the size of the U.S. economy,
these workers induce expansions in investment expenditures and hiring in areas that are complementary.
The one form of globalization that Trump has not criticized, with the exception of outward FDI,
is financial. This is a curious omission, as the crisis of 2008-09 arose from the financial implosion
that followed the collapse of the housing bubble in the U.S. International financial flows exacerbated
the magnitude of the crisis. But
Trump has pledged
to dismantle the Dodd-Frank legislation, which was enacted to implement financial regulatory
reform and lower the probability of another crisis. While
Trump has criticized China for undervaluing its currency in order to increase its exports to
the U.S., most economists believe that the
Chinese currency is no longer undervalued vis-ΰ-vis the U.S. dollar.
Did globalization produce Trump, or lead to the circumstances that resulted in
46.7% of the electorate voting
for him? A score sheet of the impact of globalization within the U.S. would record pluses and minuses.
Among those who have benefitted are consumers who purchase items made abroad at cheaper prices, workers
who produce export goods, and firms that hire migrants. Those who have been adversely affected include
workers who no longer have manufacturing jobs and domestic workers who compete with migrants for
low-paying jobs. Overall, most studies find evidence of
positive net benefits from trade . Similarly,
studies of the cost and benefits of immigration indicate that overall foreign workers make a
positive contribution to the U.S. economy.
Other trends have exerted equal or greater consequences for our economic welfare. First, as pointed
out above, advances in automation have had an enormous impact on the number and nature of jobs, and
advances in artificial intelligence wii further change the nature of work. The launch of driverless
cars and trucks, for example, will affect the economy in unforeseen ways, and more workers will lose
their livelihoods. Second, income inequality has been on the increase in the U.S. and elsewhere for
several decades. While those in the upper-income classes have benefitted most from increased trade
and finance, inequality reflects many factors besides globalization.
Why, then, is globalization the focus of so much discontent? Trump had the insight that demonizing
foreigners and U.S.-based multinationals would allow him to offer simple solutions-ripping up trade
deals, strong-arming CEOs to relocate facilities-to complex problems. Moreover, it allows him to
draw a line between his supporters and everyone else, with Trump as the one who will protect workers
against the crafty foreigners and corrupt elite who conspire to steal American jobs. Blaming the
foreign "other" is a well-trod route for those who aspire to power in times of economic and social
upheaval.
Globalization, therefore, should not be held responsible for the election of Donald Trump and
those in other countries who offer similar simplistic solutions to challenging trends. But globalization's
advocates did indirectly lead to his rise when they oversold the benefits of globalization and neglected
the downside. Lower prices at Wal-Mart are scarce consolation to those who have lost their jobs.
Moreover, the proponents of globalization failed to strengthen the safety networks and redistributive
mechanisms that allow those who had to compete with foreign goods and workers to share in the broader
benefits.
Dani Rodrik of Harvard's Kennedy School has described how the policy priorities were changed:
"The new model of globalization stood priorities on their head, effectively putting democracy to
work for the global economy, instead of the other way around. The elimination of barriers to trade
and finance became an end in itself, rather than a means toward more fundamental economic and social
goals."
The battle over globalization is not finished, and there will be future opportunities to adapt
it to benefit a wider section of society. The goal should be to place it within in a framework that
allows a more egalitarian distribution of the benefits and payment of the costs. This is not a new
task. After World War II, the Allied planners sought to revive international trade while allowing
national governments to use their policy tools to foster full employment. Political scientist
John
Ruggie of the Kennedy School called the hybrid system based on fixed exchange rates, regulated
capital accounts and government programs "
embedded liberalism
," and it prevailed until it was swept aside by the wave of neoliberal policies in the 1980s
and 1990s.
What would today's version of "embedded liberalism" look like? In the financial sector, the pendulum
has already swung back from unregulated capital flows and towards the use of capital control measures
as part of macroprudential policies designed to address systemic risk in the financial sector. In
addition,
Thomas Piketty of the Ιcole des hautes etudes en sciences (EHESS) and associate chair at the Paris
School of Economics , and author of Capital in the Twenty-first Century, has called
for a new focus in discussions over the next stage of globalization: " trade is a good thing, but
fair and sustainable development also demands public services, infrastructure, health and education
systems. In turn, these themselves demand fair taxation systems."
The current political environment is not conducive toward the expansion of public goods. But it
is unlikely that our new President's policies will deliver on their promise to return to a past when
U.S. workers could operate without concern for foreign competition or automation. We will certainly
revisit these issues, and we need to redefine what a successful globalization looks like. And if
we don't? Thomas Piketty warns of the consequences of not enacting the necessary domestic policies
and institutions: "If we fail to deliver these, Trump_vs_deep_state will prevail."
Since 1980, US manufacturing output has approximately doubled while manufacturing employment
fell by about a third.
Yes, globalization impacts the composition of output and it is a contributing factor in the
weaker growth of manufacturing output. but overall it has accounted for a very minor share of
the weakness in manufacturing employment since 1980. Productivity has been the dominant factor
driving manufacturing employment down.
JimH November 29, 2016 11:11 am
"Overall, most studies find evidence of positive net benefits from trade."
Of course they do! And in your world, studies always Trump real world experience.
Studies on trade can ignore the unemployed workers with a high school education or less. How
were they supposed to get an equivalent paying job? EDUCATION they say! A local public university
has a five year freshman graduation rate of 25%. Are those older students to eat dirt while attempting
to accumulate that education!
Studies on trade can ignore that illegal immigration increases competition for the those under
educated employees. Since 1990 there has been a rising demand that education must be improved!
That potential high school drop outs should be discouraged by draconian means if necessary. YET
we allow immigrants to enter this country and STAY with less than the equivalent of an American
high school education! Why are we spending so much on secondary education if it is not necessary!
"In Mexico, 34% of adults aged 25-64 have completed upper secondary education, much lower than
the OECD average of 76% the lowest rate amongst OECD countries."
See: http://www.oecdbetterlifeindex.org/countries/mexico/
Trade studies can ignore the fate of a small town when its major employer shuts down and leaves.
Trade studies can assume that we are one contiguous job market. They can assume that an unemployed
worker in Pennsylvania will learn of a good paying job in Washington state, submit an application,
and move within 2 weeks. Or assume that the Washington state employer will hold a factory job
open for a month! And they can assume that moving expenses are trivial for an unemployed person.
Our trade partners have not attempted anything remotely resembling balanced trade with us.
Here are the trade deficits since 1992.
Year__________US Trade Balance with the world
1992__________-39,212
1993__________-70,311
1994__________-98,493
1995__________-96,384
1996__________-104,065
1997__________-108,273
1998__________-166,140
1999__________-258,617
2000__________-372,517
2001__________-361,511
2002__________-418,955
2003__________-493,890
2004__________-609,883
2005__________-714,245
2006__________-761,716
2007__________-705,375
2008__________-708,726
2009__________-383,774
2010__________-494,658
2011__________-548,625
2012__________-536,773
2013__________-461,876
2014__________-490,176
2015__________-500,361
From:
https://www.census.gov/foreign-trade/statistics/historical/gands.pdf
AND there is the loss of the income from tariffs which had been going to the federal government!
How has that effected our national debt?
"However, when employment across geographical locations is complementary for firms that do
significantly different work at home and abroad, domestic and foreign employment rise and fall
together."
And exactly how do you think that the US government could guarantee that complementary work
at home and abroad. Corporations are profit seeking, amoral entities, which will seek profit any
way they can. (Legal or illegal)
The logical conclusion of your argument is that we could produce nothing and still have a thriving
economy. How would American consumers earn an income?
Indiana, Michigan, Ohio, Pennsylvania, and Wisconsin are RUST BELT states. Were the voters
there merely ignorant or demented? You should never ever run for elected office.
Beverly Mann November 29, 2016 12:30 pm
Meanwhile, Trump today chose non-swampy Elaine Chao, Mitch McConnell's current wife and GWBush's
former Labor Secretary, as Transportation Secretary, to privatize roads, bridges, etc.
JimH November 29, 2016 12:36 pm
The trade balances are in millions of dollars in the table in my last comment.
Global trade had a chance of success beginning in 1992. But that required a mechanism which
was very difficult to game. A mechanism like the one that the Obama administration advocated in
October 2010.
"At the meeting in South Korea's southern city of Gyeongju, U.S. officials sought to set a
cap for each country's deficit or surplus at 4% of its economic output by 2015.
The idea drew support from Britain, Australia, Canada and France, all of which are running trade
deficits, as well as South Korea, which is hosting the G-20 meetings and hoping for a compromise
among the parties.
But the proposal got a cool reception from export powerhouses such as China, which has a current
account surplus of 4.7% of its gross domestic product; Germany, with a surplus of 6.1%; and Russia,
with a surplus of 4.7%, according to IMF statistics."
See:
http://articles.latimes.com/2010/oct/24/business/la-fi-g20-summit-20101024
That cap was probably too high. But at least the Obama administration showed some realization
that global trade was exhibiting serious unpredicted problems. Too bad that Hillary Clinton could
not have internalized that realization enough to campaign on revamping problematic trade treaties.
(And persuaded a few more of the voters in the RUST BELT to vote for her.) Elections have consequences
and voters understand that, but what choice did they have?
In your world, while American corporations act out in ways that would be diagnosed as antisocial
personality disorder in a human being, American human beings are expected to wait patiently for
decades while global trade is slowly adjusted into some practical system. (As one shortcoming
after another is addressed.)
The article states almost exactly what you 'add' in your comment:
"Imports and foreign production, therefore, have had an impact on manufacturing employment
in the U.S. But several caveats should be raised. First, as Erik Brynjolfsson and Andrew McAfee
of MIT and others have pointed out, technology has had a much larger effect on jobs".
So, what gives? Is there an award today for who ever gets the biggest DUH??? If there is anything
worth adding, it would be a mention of the Ball St study that supports the author's claim but
is somehow overlooked. But your comment, well, DUH!!
=================================================
JimH,
Some good stuff there, your assessment of Economics and its penchant for ignoring variables,
and your insight which states that "studies can assume that we are one contiguous job market",
is all very true, and especially when it comes to immigration issues. I've lived most of my life
near the Southern border and when economists claim that undocumented workers are good for our
economy I can only chuckle and shake my head. I suppose I could also list all of the variables
which those economists ignore, and there are many to choose from, but, there is that quote by
Upton Sinclair: "You can't get a man to understand what his salary depends on his not understanding".
In all fairness though, The Dept. of Labor does of course have its JOLTS data, and so not all
such studies are based on broad assumptions, but Economics does have its blind spots, generally
speaking. And of course economists apply far too much effort and energy serving their political
and financial masters.
As for your comment in regards to the the trade deficit, you might want to read up a little
on the Triffin Dilemma. The essence of globalization has a lot to do with the US leadership choosing
to maintain the reserve-currency status and Triffin showed that an increasing amount of dollars
must supply the world's demand for dollars, or, global growth would falter. So, the trade deficit
since 1975 has been intentional, for that reason, and others. Of course the cost of labor in the
US was a factor too, and shipping and standards and so on. But, it is wise also, to remember that
these choices were made at time, during and just after the Viet Nam war, when military recruitment
was a very troubling issue for the leadership. And the option of good paying jobs for the working-class
was very probably seen as in conflict with military recruitment. Accordingly, the working-class
has been left with fewer options. This being accomplished in part with the historical anomaly
of high immigration quotas, (and by the tolerance for illegal immigration), during periods with
high unemployment, a falling participation-rate, inadequate infrastructure, and etc.
Ray LaPan-Love November 29, 2016 2:18 pm
JimH,
After posting my earlier comment it occurred to me that I should have recommended an article
by Tim Taylor that has some good info on the Triffin dilemma.
Also, it might be worth mentioning that you are making the common mistake of assigning blame
to an international undertaking that would be more accurately assigned to national shortcomings.
I'm referring here to what you quoted and said:
""Overall, most studies find evidence of positive net benefits from trade.""
"Of course they do! And in your world, studies always Trump real world experience".
My point being that "positive net benefits from trade" are based on just another half-baked
measurement as you suggest, but the problems which result from trade-related displacements are
not necessarily the fault of trade itself. There are in fact political options, for example, immigration
could have been curtailed about 40 years ago and we would now have about 40 million fewer citizens,
and thus there would almost certainly be more jobs available. Or, the laws pertaining to illegal
immigration could have been enforced, or the 'Employee Free Choice Act could have been passed,
or whatever, and then trade issues may have had much different impact.
Ray LaPan-Love November 29, 2016 3:12 pm
It seems worth mentioning here, that there are other more important goals that make globalization
valuable than just matters of money or employment or who is getting what. Let us not forget the
famous words of Immanuel Kant:
"the spirit of commerce . . . sooner or later takes hold of every nation, and is incompatible
with war."
coberly November 29, 2016 6:33 pm
Ray
the spirit of commerce did not prevent WW1 or WW2.
otherwise, thank you, and Jim H and Joseph Joyce for the first Post and Comments for grownups
we've had around here in some time.
Ray LaPan-Love November 29, 2016 7:03 pm
Hey Coberly, long time no see.
And yes, you are right, 'the spirit of commerce' theory has had some ups and downs. But, one
could easily and accurately argue that the effort which began with the League of Nations, and
loosely connects back to Kant's claim, has gained some ground since WW2. There has not, after-all,
been a major war since.
So, when discussing the pros and cons of globalization, that factor, as I said, is worthy of
mention. And it was a key consideration in the formation of the Bretton Woods institutions, and
in the globalization effort in general. This suggesting then that there are larger concerns than
the unemployment-rate, or the wage levels, of the working-class folks who may, or may not, have
been at the losing end of 'free-trade'.
I've been a 'labor-lefty' since the 1970s, but I am still capable of understanding that things
could have been much worse for the American working-class. Plus, if anyone must give up a job,
who better than those with a fairly well-constructed safety-net. History always has its winners
and losers, and progress rarely, if ever, comes in an even flow.
Meanwhile, those living in extreme poverty, worldwide, have dropped from 40% in 1981, to about
10% in 2015 (World Bank), so, progress is occurring. But of course much of that is now being ignored
by the din which has drowned out so many considerations that really do matter, and a great deal.
coberly November 29, 2016 8:25 pm
Ray
I am inclined to agree with you, but sometimes it's hard to see the forest for the trees. Especially
if one of those trees has fallen on you.
In general I am more interested in stopping predatory business models that really hurt people
than in creating cosmic justice.
as for the relative lack of big wars since WW2, I always thought that was because of mutual
assured destruction. I am sure Vietnam looked like a big enough war to the Vietnamese.
"... Each of these was based fundamentally upon the principle that language was the key to all power. That is, that language was not a tool that described reality but the power that created it, and s/he who controlled language controlled everything through the shaping of "discourse", as opposed to the objective existence of any truth at all ..."
"... When you globalise capital, you globalise labour. That meant jobs shifting from expensive markets to cheap. Before long the incomes of those swimming in the stream of global capital began to seriously outstrip the incomes of those trapped in old and withering Western labour markets. As a result, inflation in those markets also began to fall and so did interest rates. Thus asset prices took off as Western nation labour markets got hollowed out, and standard of living inequality widened much more quickly as a new landed aristocracy developed. ..."
"... With a Republican Party on its knees, Obama was positioned to restore the kind of New Deal rules that global capitalism enjoyed under Franklin D. Roosevelt. ..."
"... But instead he opted to patch up financialised capitalism. The banks were bailed out and the bonus culture returned. Yes, there were some new rules but they were weak. There was no seizing of the agenda. No imprisonments of the guilty. The US Department of Justice is still issuing $14bn fines to banks involved yet still today there is no justice. Think about that a minute. How can a crime be worthy of a $14bn fine but no prison time?!? ..."
"... Alas, for all of his efforts to restore Wall Street, Obama provided no reset for Main Street economics to restore the fortunes of the US lower classes. Sure Obama fought a hostile Capitol but, let's face it, he had other priorities. ..."
"... This comment is a perfect example of the author's (and Adolf Reed's) point: that the so-called "Left" is so bogged down in issues of language that it has completely lost sight of class politics. ..."
"... It's why Trump won. He was a Viking swinging an ax at nuanced hair-splitters. It was inelegant and ugly, but effective. We will find out if the hair-splitters win again in their inner circle with the Democratic Minority Leader vote. I suspect they missed the point of the election and will vote Pelosi back in, thereby missing the chance for significant gains in the mid-term elections. ..."
"... One of the great triumphs of Those Who Continue To Be Our Rulers has been the infiltration and cooptation of 'the left', hand in hand with the 'dumbing down' of the last 30+ years so few people really understand what is going on. ..."
"... That the Global Left appears to be intellectually weak regarding identity politics and "political correctness" vs. class politics, there is no doubt. But to skim over Global Corporate leverage of this attitude seems wrong to me. The right has also embraced identity politics in order to keep the 90% fully divided in order to justify it's continual economic rape of both human and physical ecology. ..."
"... Every "identity politics" charge starts here, with one group wanting a more equitable social order and the other group defending the existing power structure. Identity politics is adjusting the social order and rattling the power structure, which is why it is so effective. ..."
"... I think it can be effectively argued that Trump voters in PA, WI, OH, MI chose to rattle the power structure and you could think of that as identity politics as well. ..."
"... On the contrary, the (Neo-)Liberal establishment uses identity politics to co-opt and neutralise the left. It keeps them occupied without threatening the real power structure in the least. ..."
"... Hillary (Neoliberal establishment) has many supporters who think of themselves as 'left' or 'liberal'. The Democratic Party leadership is neither 'left' nor 'liberal'. It keeps the votes and the love of the 'liberals' by talking up harmless 'liberal' identity politics and soft peddling the Liberal power politics which they are really about. ..."
"... Just from historical perspective, the right wing had more money to forward its agenda and an OCD like affliction [biblical] to drive simple memes relentlessly via its increasing private ownership of education and media. Thereby creating an institutional network over time to gain dominate market share in crafting the social narrative. Bloodly hell anyone remember Bush Jr Christian crusade after politicizing religion to get elected and the ramifications neocon R2P thingy . ..."
"... Its not hard once neoliberalism became dominate in the 70s [wages and productivity diverged] the proceeds have gone to the top and everyone else got credit IOUs based mostly on asset inflation via the Casino or RE [home and IP]. ..."
"... Foucault in particular advanced a greatly expanded wariness regarding the use of power. It was not just that left politics could only lead to ossified Soviet Marxism or the dogmatic petty despotism of the left splinters. Institutions in general mapped out social practices and attendant identities to impose on the individual. His position tended to promote a distrust not only of "grand narratives" but of organizational bonds as such. As far as I can tell, the idea of people joining together to form an institution that would enhance their social power as well as allow them to become personally empowered/enhanced was something of a categorial impossibility. ..."
"... There is no global left. We have only global state capitalists and global social democrats a pseudo left. The countries where Marxist class analysis was supposedly adopted were not industrial countries where "alienation" had brought the "proletariat" to an inevitable communal mentality. The largest of these countries killed millions in order to industrialize rapidly pretending the goal was to get to that state. ..."
"... Bigotry. Identity centered thinking. Neither serves egalitarianism. But people cling to them. "I gotta look out for myself first." And so called left thinkers constantly pontificate about "benefits" and "privileges" that some class, sex, and race confer. Hmmm. The logic is that many of us struggling daily to keep our jobs and pay the bills must give up something in order to be fair, in order to build a better society. Given this thinking it is no surprise that so many have retreated into the illusion of safety offered by identity based thinking. ..."
"... "Simultaneously, capitalism did what it does best. It packaged and repackaged, branded and rebranded every emerging identity, cloaked in its own sub-cultural nomenclature, selling itself back to new emerging identities. Soon class was completely forgotten as the global Left dedicated itself instead to policing the commons as a kind of safe zone for a multitude of difference that capitalism turned into a cultural supermarket." ..."
"... But why does the Dem estab embrace the conservative neoliberal agenda? The Dem estab are smart people, can think on multiple levels, are not limited in scope, are not racist. So, why then does the Dem estab accept and promote the conservative GOP neoliberal economic agenda? ..."
"... Because the Dem estab isn't very smart. ..."
"... Conservative is: private property, capitalism, limited taxes and transfer payments plus national security and religion. ..."
"... Liberalism is not in opposition to any of that. Identity politics arose at the same time the Ds were purging the reds (socialists and communists) from their party. Liberalism/progressivism is an ameliorating position of conservatism (progressive support of labor unions to work within a private property/corporatist structure not to eliminate the system and replace it with public/employee ownership) Not too far, too fast, maybe toss out a few more crumbs. ..."
"... There is a foundation for identity politics on the liberal-left (see what I did there?) it rests in the sense of moral superiority of just this liberal-left, which superiority is then patronisingly spread all over the social world until it meets those who deny the moral superiority claim, whereupon it becomes murderous (in, of course, the name of humanity and humanitarianism). ..."
"... This is why the 1% continue to prevail over the 99%. If the 1% wasn't so incompetent this would continue forever. They know how to divide, conquer and rule the 99%, however they don't know how to run a society in a sustainable way. ..."
"... But I will say one thing for the Right over the Left: they have taken the initiative and are now the sole force for change. Granted, supporting a carnival barker for president is an act of desperation. Nevertheless he was the only option for change and the Right took it. Perhaps the Left offering little to nothing in the way of change reflects its lack of desperation. ..."
"... Excellent comment, EoinW! You just summed up years of content and commentary on this site. Obviously as the "Left" continues to defend the status quo as you describe it stops being "Left" in any meaningful way anymore. ..."
"... The Koch brothers are economically to the very right. They are socially to the left, perhaps even more socially liberal than many of your liberal friends. No joke. There's a point here, if I can figure out what it is. ..."
"... Trump isn't Right or Left. Trump is a can of gasoline and a match. His voters weren't voting for a Left or Right agenda. They were voting for a battering ram. That is why he got a pass on racist, misogynist, fascist statements that would have killed any other candidate. ..."
"... PC is a parody of the 20th Century reform movements. ..."
"... In the 70's the feminists worked against legal disabilities written into law. Since the Depression, the unions fought corporate management create a livable relationship between management and labor. Real struggles, real problems, real people. ..."
"... What's interesting is that in an article pushing class over identity. he never tried to set his class ethos in order to convince working class people or the bourgeoisie why they should listen to him. ..."
"... "This site, along with the MSM, has flown way off the handle since the election loss." ..."
"... "Our nation's problems can be remedied with one dramatic change" ..."
"... Bringing C level pay packages at major corporations in line with the real contributions of the recipients would be great. How would we do it? With laws or regulations or executive orders banning the federal government from doing business with any firm that failed to comply with some basic guidelines? ..."
"... It's an academic point right now in any event. The Trump administration working together with the Ryan House is not going to make legislation or sign executive orders to do anything remotely like this. Which is one of the many reasons why bashing Democrats has taken off here I suspect. This election was theirs to lose, and they did everything in their power to toss it. ..."
"... You do realize that the wealthy are both part of and connected to the legislative branch of every single country on this planet right? As long as that remains so (as it has since the dawn of humans) then good luck trying to cap any sort of hording behavior of the wealthy. ..."
"... The post-structural revolution transpired [in the U.S.] before and during the end of the Cold War just as the collapse of the Old Soviet Union denuded the global Left of its raison detre. ..."
"... Foucault was not entirely sympathetic to the Left, at least the unions, but he was trying to articulate a politics that was just as much about liberation from capitalism as classic Marxism. To that end, discourse analysis was the means to discovering those subtle articulations of power in human relations, not an end in itself as it was for, say, Barthes. ..."
"... Imagine inequality plotted on two axes. Inequality between genders, races and cultures is what liberals have been concentrating on. This is the x-axis and the focus of identity politics and the liberal left. ..."
"... On the y-axis we have inequality from top to bottom. 2014 "85 richest people as wealthy as poorest half of the world" 2016 "Richest 62 people as wealthy as half of world's population" ..."
"... The neoliberal view L As long as everyone, from all genders, races and cultures, is visiting the same food bank this is equality. ..."
"... You can see why liberals love identity politics. ..."
"... labor is being co-opted by the right: the Republican Workers Party I think this rhymes with Fascist. But then, in a world soon to be literally scrambling for high ground and rebuilding housing for 50 million people the time honored "worker" might actually have a renaissance. ..."
"... But the simple act of writing checks cost me n-o-t-h-i-n-g in terms of time, energy, education, physical or mental exertion. ..."
"... A much more nuanced discussion of the primacy of identity politics on the Left in Britain and the US is http://www.counterpunch.org/2016/11/29/prospects-for-an-alt-left/ "Prospects for an Alt-Left," November 29, 2016, by Elliot Murphy, who teaches in the Division of Psychology and Language Sciences at University College, London. ..."
"... The electorate is angry (true liberals at the Dems, voters in select electoral states at "everything"). If democracy is messy, then that's what we've got; a mess. Unfortunately, it's coming at the absolutely wrong time (Climate Change, lethal policing, financial elite impunity). ..."
"... But certainly the fall of the USSR was the thing that forced capitalism's hand. At that point capitalism had no choice but to step up and prove that it could really bring a better life to the world. ..."
"... A Minsky event of biblical proportions soon followed (it only took about 10 years!) and now all is devastation and nobody has clue. But the 1990 effort could have been in earnest. Capitalists mean well but they are always in denial about the inequality they create which finally started a chain reaction in "identity politics" as reactions to the stress of economic competition bounced around in every society like a pinball machine. A tedious and insufferable game which seems to have culminated in Hillary the Relentless. I won't say capitalism is idiotic. But something is. ..."
"... Left and Right only really make sense in the context of the distribution of power and wealth, and only when there is a difference between them about that distribution. This was historically the case for more than 150 years after the French Revolution. By the mid-1960s, there was a sense that the Left was winning, and would continue to win. Progressive taxation, zero unemployment, little real poverty by today's standards, free education and healthcare . and many influential political figures (Tony Crosland for example) saw the major task of the future as deciding where the fruits of economic growth could be most justly applied. ..."
"... So until class-based politics and struggles over power and money re-start (if they ever do) I respectfully suggest that "Left" and "Right" be retired as terms that no longer have any meaning. ..."
"... powerlessness, of course, corrupts. There's always someone weaker than you, which is why identity politics is essentially a conservative, disciplining force, with a vested interest in the problems it has chosen to identify ..."
"... Identity politics is a disaster ongoing for the Democratic Party, for reasons they seem to have overlooked. First, the additional identity group is white. We already see this in the South, where 90% of the white population in many states votes Republican. ..."
"... When that spreads to the rest of the country, there will be a permanent Republican majority until the Republicans create a new major disaster. ..."
"... So soon we forget the Battle of Seattle. The Left has been opposed to globalization, deregulation, etc., all along. Partly he's talking about an academic pseudo-left, partly confusing the left with the Democrats and other "center-left," captured parties. ..."
"... I mean, Barack Obama was our first black president, but most blacks didn't do very well. George W. Bush was our first retard president, and most people with cognitive handicaps didn't do very well. ..."
"... But we can boil it all down to something even simpler and more primal: divide and conquer. ..."
Yves here. This piece gives a useful, real-world perspective on the issues discussed in
a seminal Adolph Reed article . Key section:
race politics is not an alternative to class politics; it is a class politics, the politics
of the left-wing of neoliberalism. It is the expression and active agency of a political order
and moral economy in which capitalist market forces are treated as unassailable nature. An integral
element of that moral economy is displacement of the critique of the invidious outcomes produced
by capitalist class power onto equally naturalized categories of ascriptive identity that sort
us into groups supposedly defined by what we essentially are rather than what we do. As I have
argued, following Walter Michaels and others, within that moral economy a society in which 1%
of the population controlled 90% of the resources could be just, provided that roughly 12% of
the 1% were black, 12% were Latino, 50% were women, and whatever the appropriate proportions were
LGBT people. It would be tough to imagine a normative ideal that expresses more unambiguously
the social position of people who consider themselves candidates for inclusion in, or at least
significant staff positions in service to, the ruling class.
This perspective may help explain why, the more aggressively and openly capitalist class power
destroys and marketizes every shred of social protection working people of all races, genders,
and sexual orientations have fought for and won over the last century, the louder and more insistent
are the demands from the identitarian left that we focus our attention on statistical disparities
and episodic outrages that "prove" that the crucial injustices in the society should be understood
in the language of ascriptive identity.
My take on this issue is that the neoliberal use of identity politics continue and extends the
cultural inculcation of individuals seeing themselves engaging with other in one-to-one transactions
(commerce, struggles over power and status) and has the effect of diverting their focus and energy
on seeing themselves as members of groups with common interests and operating that way, and in particular,
of seeing the role of money and property, which are social constructs, in power dynamics.
By David Llewellyn-Smith, founding publisher and former editor-in-chief of The Diplomat
magazine, now the Asia Pacific's leading geo-politics website. Originally posted at
MacroBusiness
Let's begin this little tale with a personal anecdote. Back in 1990 I met and fell in love with
a bisexual, African American ballerina. She was studying Liberal Arts at US Ivy League Smith College
at the time (which Aussies may recall was being run by our Jill Kerr Conway back then). So I moved
in with my dancing beauty and we lived happily on her old man's purse for a year.
I was fortunate to arrive at Smith during a period of intellectual tumult. It was the early years
of the US political correctness revolution when the academy was writhing through a post-structuralist
shift. Traditional dialectical history was being supplanted by a new suite of studies based around
truth as "discourse". Driven by the French post-modern thinkers of the 70s and 80s, the US academy
was adopting and adapting the ideas Foucault, Derrida and Barthe to a variety of civil rights movements
that spawned gender and racial studies.
Each of these was based fundamentally upon the principle that language was the key to all
power. That is, that language was not a tool that described reality but the power that created it,
and s/he who controlled language controlled everything through the shaping of "discourse", as opposed
to the objective existence of any truth at all .
... ... ...
The post-structural revolution transpired before and during the end of the Cold War just as the
collapse of the Old Soviet Union denuded the global Left of its raison detre. But its social justice
impulse didn't die, it turned inwards from a notion of the historic inevitability of the decline
of capitalism and the rise of oppressed classes, towards the liberation of oppressed minorities within
capitalism, empowered by control over the language that defined who they were.
Simultaneously, capitalism did what it does best. It packaged and repackaged, branded and rebranded
every emerging identity, cloaked in its own sub-cultural nomenclature, selling itself back to new
emerging identities. Soon class was completely forgotten as the global Left dedicated itself instead
to policing the commons as a kind of safe zone for a multitude of difference that capitalism turned
into a cultural supermarket.
As the Left turned inwards, capitalism turned outwards and went truly, madly global, lifting previously
isolated nations into a single planet-wide market, pretty much all of it revolving around Americana
replete with its identity-branded products.
But, of course, this came at a cost. When you globalise capital, you globalise labour. That
meant jobs shifting from expensive markets to cheap. Before long the incomes of those swimming in
the stream of global capital began to seriously outstrip the incomes of those trapped in old and
withering Western labour markets. As a result, inflation in those markets also began to fall and
so did interest rates. Thus asset prices took off as Western nation labour markets got hollowed out,
and standard of living inequality widened much more quickly as a new landed aristocracy developed.
Meanwhile the global Left looked on from its Ivory Tower of identity politics and was pleased.
Capitalism was spreading the wealth to oppressed brothers and sisters, and if there were some losers
in the West then that was only natural as others rose in prominence. Indeed, it went further. So
satisfied was it with human progress, and so satisfied with its own role in producing it, that it
turned the power of language that it held most dear back upon those that opposed the new order. Those
losers in Western labour markets that dared complain or fight back against the free movement of capital
and labour were labelled and marginalised as "racist", "xenophobic" and "sexist".
This great confluence of forces reached its apogee in the Global Financial Crisis when a ribaldly
treasonous Wall St destroyed the American financial system just as America's first ever African American
President, Barack Obama, was elected . One might have expected this convergence to result in a revival
of some class politics. Obama ran on a platform of "hope and change" very much cultured in the vein
of seventies art and inherited a global capitalism that had just openly ravaged its most celebrated
host nation.
But alas, it was just a bit of "retro". With a Republican Party on its knees, Obama was positioned
to restore the kind of New Deal rules that global capitalism enjoyed under Franklin D. Roosevelt.
A gobalisation like the one promised in the brochures, that benefited the majority via competition
and productivity gains, driven by trade and meritocracy, with counter-balanced private risk and public
equity.
But instead he opted to patch up financialised capitalism. The banks were bailed out and the
bonus culture returned. Yes, there were some new rules but they were weak. There was no seizing of
the agenda. No imprisonments of the guilty. The US Department of Justice is still issuing $14bn fines
to banks involved yet still today there is no justice. Think about that a minute. How can a crime
be worthy of a $14bn fine but no prison time?!?
Alas, for all of his efforts to restore Wall Street, Obama provided no reset for Main Street
economics to restore the fortunes of the US lower classes. Sure Obama fought a hostile Capitol but,
let's face it, he had other priorities. And so the US working and middle classes, as well as
those worldwide, were sold another pup. Now more than ever, if they said say so they were quickly
shut down as "racist", "xenophobic", or "sexist".
Thus it came to pass that the global Left somehow did a complete back-flip and positioned itself
directly behind the same unreconstructed global capitalism that was still sucking the life from the
lower classes that it always had. Only now it was doing so with explicit public backing and with
an abandon it had not enjoyed since the roaring twenties.
Which brings us back to today. And we wonder how it is that an abuse-spouting guy like Donald
Trump can succeed Barack Obama. Trump is a member of the very same "trickle down" capitalist class
that ripped the income from US households. But he is smart enough, smarter than the Left at least,
to know that the decades long rage of the middle and working classes is a formidable political force
and has tapped it spectacularly to rise to power.
And, he has done more. He has also recognised that the Left's obsession with post-structural identity
politics has totally paralysed it. It is so traumatised and pre-occupied by his mis-use of the language
of power the "racist", "sexist" and "xenophobic" comments that it is further wedging itself from
its natural constituents every day.
Don't get me wrong, I am very doubtful that Trump will succeed with his proposed policies but
he has at least mentioned the elephant in the room, making the American worker visible again.
Returning to that innocent Aussie boy and his wild romp at Smith College, I might ask what he
would have made of all of this. None of the above should be taken as a repudiation of the experience
of racism or sexism. Indeed, the one thing I took away from Smith College over my lifetime was an
understanding at just how scarred by slavery are the generations of African Americans that lived
it and today inherit its memory (as well as other persecuted). I felt terribly inadequate before
that pain then and I remain so today.
But, if the global Left is to have any meaning in the future of the world, and I would argue that
the global Right will destroy us all if it doesn't, then it must get beyond post-structural paralysis
and go back to the future of fighting not just for social justice issues but for equity based upon
class. Empowerment is not just about language, it's about capital, who's got it, who hasn't and what
role government plays between them.
This comment is a perfect example of the author's (and Adolf Reed's) point: that the so-called
"Left" is so bogged down in issues of language that it has completely lost sight of class politics.
Essentially, the comment vividly displays the exact methodology the author lambasts in the
piece - it hijacks the discussion about an economic issue, attempts to turn it into a mere distraction
about semantics, and in the end contributes absolutely nothing of substance to the "discourse".
It's why Trump won. He was a Viking swinging an ax at nuanced hair-splitters. It was inelegant
and ugly, but effective. We will find out if the hair-splitters win again in their inner circle with the Democratic
Minority Leader vote. I suspect they missed the point of the election and will vote Pelosi back
in, thereby missing the chance for significant gains in the mid-term elections.
One of the great triumphs of Those Who Continue To Be Our Rulers has been the infiltration
and cooptation of 'the left', hand in hand with the 'dumbing down' of the last 30+ years so few
people really understand what is going on.
Explained in more detail here if anyone interested in some truly 'out of the box' perspectives
It's not 'the left' trying to take over the world and shut down free speech and all that other
bad stuff it's 'the right'!! http://tinyurl.com/h4h2kay
.
Although I haven't yet read the article you posted, my "feeling" as I read this was that the
author inferred that the right was in the mix somehow, but it was primarily the fault of the left.
That the Global Left appears to be intellectually weak regarding identity politics and "political
correctness" vs. class politics, there is no doubt. But to skim over Global Corporate leverage
of this attitude seems wrong to me. The right has also embraced identity politics in order to
keep the 90% fully divided in order to justify it's continual economic rape of both human and
physical ecology.
Exactly. My guess is that this plays out somewhat like this:
Dems: This group _____ should be free to have _____ civil right.
Reps: NO. We are a society built on _____ tradition, no need to change that because it upends
our patriarchal, Christian, Caucasian power structure.
Every "identity politics" charge starts here, with one group wanting a more equitable social
order and the other group defending the existing power structure. Identity politics is adjusting
the social order and rattling the power structure, which is why it is so effective.
I think it can be effectively argued that Trump voters in PA, WI, OH, MI chose to rattle
the power structure and you could think of that as identity politics as well.
Identity politics is adjusting the social order and rattling the power structure, which
is why it is so effective.
On the contrary, the (Neo-)Liberal establishment uses identity politics to co-opt and neutralise
the left. It keeps them occupied without threatening the real power structure in the least.
When have they ever done any such thing? Vote for Hillary because she's a woman isn't even
any kind of politics it's more like marketing branding. It's the real thing. Taste great, less
filling. I'm loving it.
Hillary (Neoliberal establishment) has many supporters who think of themselves as 'left'
or 'liberal'. The Democratic Party leadership is neither 'left' nor 'liberal'. It keeps the votes
and the love of the 'liberals' by talking up harmless 'liberal' identity politics and soft peddling
the Liberal power politics which they are really about.
They exploit the happy historical accident of the coincidence of names. The Liberal ideology
was so called because it was slightly less right-wing than the Feudalism it displaced. In today's
terms however, it is not very liberal, and Neoliberalism is even less so.
If I was in charge of the DNC and wanted to commission a very cleverly written piece to exonerate
the DLC and the New Democrats from the 30 odd years of corruption and self-aggrandizement they
indulged in and laughed all the way to the Bank then I would definitely give this chap a call.
I mean, where do we start? No attempt at learning the history of neoliberalism, no attempt at
any serious research about how and why it fastened itself into the brains of people like Tony
Coelho and Al From, nothing, zilch. If someone who did not know the history of the DLC read this
piece, they would walk away thinking, 'wow, it was all happenstance, it all just happened, no
one deliberately set off this run away train'. Sometime in the 90s the 'Left' decided to just
pursue identity politics. Amazing. I would ask the Author to start with the Powell memo and then
make an investigation as to why the Democrats then and the DLC later decided to merely sit on
their hands when all the forces the Powell memo unleashed proceeded to wreak their havoc in every
established institution of the Left, principally the Universities which had always been the bastion
of the Progressives. That might be a good starting point.
Sigh . the left was marginalized and relentlessly hunted down by the right [grab bag of corporatists,
free marketers, neocons, evangelicals, and a whole cornucopia of wing nut ideologists (file under
creative class gig writers)].
Just from historical perspective, the right wing had more money to forward its agenda and
an OCD like affliction [biblical] to drive simple memes relentlessly via its increasing private
ownership of education and media. Thereby creating an institutional network over time to gain
dominate market share in crafting the social narrative. Bloodly hell anyone remember Bush Jr Christian
crusade after politicizing religion to get elected and the ramifications neocon R2P thingy .
Its not hard once neoliberalism became dominate in the 70s [wages and productivity diverged]
the proceeds have gone to the top and everyone else got credit IOUs based mostly on asset inflation
via the Casino or RE [home and IP].
Yes, it's interesting that the academic "left" (aka liberals), who so prize language to accurately,
and to the finest degree distinguish 'this' from 'that', have avoided addressing the difference
between 'left' and 'liberal' and are content to leave the two terms interchangable.
The reason for that is that when academic leftists attempted a more in depth critique, of one
sort or another, of the actually existing historical liberal welfare state, the liberals threw
the "New Deal-under-siege" attack at them and attempted to shut them down.
There is very little left perspective in public. All this whining about identity politics is
not left either. It is reactionary. I can think of plenty of old labor left academics who have
done a much better job of wrapping their minds around why sex, gender, and race matter with respect
to all matters economic than this incessant childish whine. The "let me make you feel more comfortable"
denialism of Uncle Tom Reed.
Right now, I would say that these reactionaries don't want to hear from the academic left any
more than New Deal liberals did. Not going to stop them from blaming them for all their problems
though.
Maybe people should shoulder their own failures for a change. As for the Trumpertantrums, I
am totally not having them.
Since the writer led off talking about an academic setting, it would be useful to flesh out
a bit more how trends in academic theoretical discussion in the 70s and 80s reflected and reinforced
what was going on politically. He refers to postructuralism, which was certainly involved, but
doesn't give enough emphasis to how deliberately poststructuralists - and here I'm lumping together
writers like Lyotard, Foucault, and Deleuze and Guattari - were all reacting to the failure of
French Maoism and Trotskyism to, as far as they were concerned, provide a satisfactory alternative
to Soviet Marxism.
As groups espousing those position flailed about in the 70s, the drive to maintain
hope in revolutionary prospects in the midst of macroeconomic stabilization and union reconciliation
to capitalism frequently brought out the worst sectarian tendencies. While writers like Andre Gorz bid adieu to the proletariat as an agent of change and tried to tread water as social democratic
reformists, the poststructuralists disjoined the critique of power from class analysis.
Foucault in particular advanced a greatly expanded wariness regarding the use of power. It
was not just that left politics could only lead to ossified Soviet Marxism or the dogmatic petty
despotism of the left splinters. Institutions in general mapped out social practices and attendant
identities to impose on the individual. His position tended to promote a distrust not only of
"grand narratives" but of organizational bonds as such. As far as I can tell, the idea of people
joining together to form an institution that would enhance their social power as well as allow
them to become personally empowered/enhanced was something of a categorial impossibility.
When imported to US academia, traditionally much more disengaged from organized politics than
their European counterparts, these tendencies flourished. Aside from being socially cut off from
increasingly anodyne political organizations, poststructuralists in the US often had backgrounds
with little orientation to history or social science research addressing class relations. To them
the experience of a much more immediate and palpable form of oppression through the use of language
offered an immediate critical target. This dovetailed perfectly with the legalistic use of state
power to end discrimination against various groups, A European disillusionment with class politics
helped to fortify an American evasion or ignorance of it.
There is no global left. We have only global state capitalists and global social democrats
a pseudo left. The countries where Marxist class analysis was supposedly adopted were not industrial
countries where "alienation" had brought the "proletariat" to an inevitable communal mentality.
The largest of these countries killed millions in order to industrialize rapidly pretending
the goal was to get to that state.
The terms left and right may not be adequate for those of us who want an egalitarian society
but also see many of the obstacles to egalitarianism as human failings that are independent of
and not caused by ruling elites although they frequently serve the interests of those elites.
Bigotry. Identity centered thinking. Neither serves egalitarianism. But people cling to
them. "I gotta look out for myself first." And so called left thinkers constantly pontificate
about "benefits" and "privileges" that some class, sex, and race confer. Hmmm. The logic is that
many of us struggling daily to keep our jobs and pay the bills must give up something in order
to be fair, in order to build a better society. Given this thinking it is no surprise that so
many have retreated into the illusion of safety offered by identity based thinking.
Hopefully those of us who yearn for an egalitarian movement can develop and articulate an alternate
view of reality.
"Simultaneously, capitalism did what it does best. It packaged and repackaged, branded and
rebranded every emerging identity, cloaked in its own sub-cultural nomenclature, selling itself
back to new emerging identities. Soon class was completely forgotten as the global Left dedicated
itself instead to policing the commons as a kind of safe zone for a multitude of difference
that capitalism turned into a cultural supermarket."
"Meanwhile the global Left looked on from its Ivory Tower of identity politics and was pleased.
Capitalism was spreading the wealth to oppressed brothers and sisters, and if there were some
losers in the West then that was only natural as others rose in prominence. Indeed, it went
further. So satisfied was it with human progress, and so satisfied with its own role in producing
it, that it turned the power of language that it held most dear back upon those that opposed
the new order. Those losers in Western labour markets that dared complain or fight back against
the free movement of capital and labour were labelled and marginalised as "racist", "xenophobic"
and "sexist". "
That is not it at all. The real reason is the right wing played white identity politics starting
with the southern strategy, and those running into the waiting arms of Trump today, took the poisoned
bait. Enter Bill Clinton.
People need to start taking responsibility for their own actions, and stop blaming the academics
and the leftists and the wimmins and the N-ers.
But why does the Dem estab embrace the conservative neoliberal agenda? The Dem estab are
smart people, can think on multiple levels, are not limited in scope, are not racist. So, why
then does the Dem estab accept and promote the conservative GOP neoliberal economic agenda?
Because the Dem estab isn't very smart. I doubt more than half of them could define neoliberalism
much less describe how it has destroyed the country. They are mostly motivated by the identity
politics aspects.
Conservative is: private property, capitalism, limited taxes and transfer payments plus
national security and religion.
Liberalism is not in opposition to any of that. Identity politics arose at the same time
the Ds were purging the reds (socialists and communists) from their party. Liberalism/progressivism
is an ameliorating position of conservatism (progressive support of labor unions to work within
a private property/corporatist structure not to eliminate the system and replace it with public/employee
ownership) Not too far, too fast, maybe toss out a few more crumbs.
There is a foundation for identity politics on the liberal-left (see what I did there?)
it rests in the sense of moral superiority of just this liberal-left, which superiority is then
patronisingly spread all over the social world until it meets those who deny the moral superiority
claim, whereupon it becomes murderous (in, of course, the name of humanity and humanitarianism).
We live in a society where no one gets what they want. The Left sees the standard of living
fall and is powerless to stop it. The Right see the culture war lost 25 years ago and can't even
offer a public protest, let alone move things in a conservative direction. Instead we get the
agenda of the political Left to sell out at every opportunity. Plus we get the agenda of the political
Right of endless war and endless security state. Eventually the political Left and Right merge
and support the exact same things. Now when will the real Left and Right recognize their true
enemy and join forces against it? This is why the 1% continue to prevail over the 99%. If
the 1% wasn't so incompetent this would continue forever. They know how to divide, conquer and
rule the 99%, however they don't know how to run a society in a sustainable way.
But I will say one thing for the Right over the Left: they have taken the initiative and
are now the sole force for change. Granted, supporting a carnival barker for president is an act
of desperation. Nevertheless he was the only option for change and the Right took it. Perhaps
the Left offering little to nothing in the way of change reflects its lack of desperation.
After all, the Left won the culture war and continues to push its agenda to extremes(even though
such extremes will guarantee a back lash that will send people running back to their closets to
hide). The Left still has the MSM media on its side when it comes to cultural issues. Thus the
Left is satisfied with the status quo, with gorging themselves on the crumbs which fall from the
1% table. Consequently, you not only have a political Left that has sold out, you also have the
rest of the Left content to accept that sell out so long as they get their symbolic victories
over their ancient enemy the Right.
Until the Left recognize its true enemy, the fight will only come from the Right. During that
process more people will filter from the Left to the Right as the latter will offer the only hope
for change.
I think left and right as political shorthand is too limited. Perhaps the NC commentariat could
define up and down versions of each of these political philosophies (ie. left and right) and start
to take control of the framing. Hence we would have up-left, down-left, up-right, and down-right.
I would suggest that up and down could relate to environmental viewpoints.
Just a thought that I haven't given much thought, but it would be funny (to me at least) to
be able to quantify one's political stance in terms of radians.
Excellent comment, EoinW! You just summed up years of content and commentary on this site.
Obviously as the "Left" continues to defend the status quo as you describe it stops being "Left"
in any meaningful way anymore.
This seems to assume that change is an intrinsic good, so that change produced by the right
will necessarily be improvement. Unfortunately, change for the worse is probably more likely than
change for the better under this regime. Equally unfortunately, we may have reached the point
where that is the only thing that will make people reconsider what constitutes a just society
and how to achieve it. In any case, this is where we are now.
The economic left sees its standard of living fall. The social right sees its
cultural verities fall.
The Koch brothers are economically to the very right. They are socially to the
left, perhaps even more socially liberal than many of your liberal friends. No joke. There's
a point here, if I can figure out what it is.
"He [Trump] was the only option for change and the Right took it."
You forget Bernie. The Left tried, and Bernie bowed out, not wanting to be another "Nader"
spoiler. Now, for 2020, the Left thinks it's the "their turn."
The problem is, the Left tends to blow it too (e.g. McGovern in 1972), in part because their
"language" also exudes power and tends to alienate other, more moderate, parts of the coalition
with arcane (and rather elitist) arguments from Derrida et. al.
Trump isn't Right or Left. Trump is a can of gasoline and a match. His voters weren't voting
for a Left or Right agenda. They were voting for a battering ram. That is why he got a pass on
racist, misogynist, fascist statements that would have killed any other candidate.
Trump is starting out with some rallies in the near-future. The Republicans in Congress think
they are going to play patty-cake on policy to push the Koch Brothers agenda. We are going to
see a populist who promised jobs duke it out publicly with small government austerity deficit
cutters. It will be interesting to see what happens when he calls out Republican Congressmen standing
in the way of his agenda by name.
PC is a parody of the 20th Century reform movements. I n the 60's the Black churches
and the labor unions fought Jim Crow laws and explicit institutional discrimination. In the 70's
the feminists worked against legal disabilities written into law. Since the Depression, the unions
fought corporate management create a livable relationship between management and labor. Real struggles,
real problems, real people.
[Tinfoil hat on)]
At the same time the reformist subset was losing themselves in style points, being 'nice',
and passive aggressive intimidation, the corporate community was promoting the anti-government
screech for the masses. That is, at the same time the people lost sight of government as their
counterweight to capital, the left elite was becoming the vile joke Limbaugh and the other talk
radio blowhards said they were. This may be coincidental timing, or their may be someone behind
the French connection and Hamilton Fish touring college campuses in the 80's promoting subjectivism.
It's true the question of 'how they feel' seems to loom large in discussions where social justice
used to be.
[Tinfoil hat off]
There are many words but no communication between the laboring masses and the specialist readers.
Fainting couch feminists have nothing to say to wives and mothers, the slippery redefinitions
out of non-white studies turn off people who work for a living, and the promotion of smaller and
more neurotic minorities are just more friction in a society growing steeper uphill.
"She was studying Liberal Arts at US Ivy League Smith College at the time (which Aussies may
recall was being run by our Jill Kerr Conway back then). So I moved in with my dancing beauty
and we lived happily on her old man's purse for a year."
I hate to be overly pedantic, but Smith College is one of the historically female colleges
known as the Seven Sisters: Barnard College, Bryn Mawr College, Mount Holyoke College, Radcliffe
College, Smith College, Vassar College, and Wellesley College. While Barnard is connected to Columbia,
and Radcliffe to Harvard, none of the other Sisters has ever been considered any part of the Ancient
Eight (Ivy League) schools: Brown, Columbia, Cornell, Dartmouth, Harvard, Pennsylvania, Princeton,
and Yale.
I find it highly doubtful that someone, unaware of this elementary fact, actually lived off
a beautiful bisexual black ballerina's (wonderful alliteration!) "old man's purse," for a full
year in Northampton, MA. He may well have dated briefly someone like this, but it strains credulity
that after a full year in this environment he would never have learned of the distinction between
the Seven Sisters and the Ivy League.
The truth of the matter is not so important. The black ballerina riff had two functions. First
it helped push an ethos for the author of openness and acceptance of various races and sexual
orientations. This is a highly charged subject and so accusations of racism, etc, are never far
away for someone pushing class over identity.
Second it served as a nice hook to get dawgs like me to read through the whole thing; which
was a very good article. Kind of like the opening paragraph of a Penthouse Forum entry, I was
hoping that the author would eventually elaborate on what happened when she pirouetted over him
What's interesting is that in an article pushing class over identity. he never tried to set
his class ethos in order to convince working class people or the bourgeoisie why they should listen
to him.
I have never, ever known Brits to claim an "Oxbridge education" if they haven't attended either
Oxford or Cambridge. Similarly, over several decades of knowing quite well many alumnae from Wellesley,
Smith, etc. I have never once heard them speak of their colleges as "Ivy League."
I do get your point, however. Perhaps Mr. Llewellyn-Smith was deliberately writing for a non-U.S.
audience, and chose to use "Ivy League" as synonymous with "prestigious." I have seen graduates
of Stanford, for example, described as "Ivy Leaguers" in the foreign press.
I think the gradual process whereby the left, or more specifically, the middle class left,
have been consumed by an intellectually vacant went hand in hand with what I found the bizarre
abandonment of interest by the left in economics and in public intellectualism. The manner in
which the left simply surrendered the intellectual arguments over issues like taxes and privatisation
and trade still puzzles me. I suspect it was related to a cleavage between middle class left wingers
and working class activists. They simple stopped talking the same language, so there was nobody
to shout 'stop' when the right simply colonised the most important areas of public policy and
shut down all discussion.*
A related issue is I think a strong authoritarianist strain which runs through some identity
politics. Its common to have liberals discuss how intolerant the religious or right wingers are
of intellectual discussion, but even try to question some of of the shibboleths of gender/race
discussions and you can immediately find yourself labelled a misogynist/homophobe/racist. Just
see some of the things you can get banned from the Guardian CIF for saying.
This site, along with the MSM, has flown way off the handle since the election loss. Democrat-bashing
is the new pastime.
Our nation's problems can be remedied with one dramatic change:
Caps on executive gains in terms of multiples in both public and private companies of a big
enough size. For example, the CEO at most can make 50 times the average salary. Something to that
effect. And any net income gains at the end of the year that are going to be dispersed as dividends,
must proportionally reach the internal laborers as well. Presto, a robust economy.
All employees must share in gains. You don't like it? Tough. The owner will still be rich.
Historically, executives topped out at 20-30 times average salary. Now it's normal for the
number to reach 500-2,000. It's absurd. As if a CEO is manufacturing products, marketing, and
selling them all by himself/herself. As if Tim Cook assembles iPhones and iMacs by hand and sells
them. As if Leslie Moonves writes, directs, acts in, and markets each show.
Put the redistributive mechanism in the private sphere as well as in government. Then America
will be great again.
Bringing C level pay packages at major corporations in line with the real contributions of
the recipients would be great. How would we do it? With laws or regulations or executive orders
banning the federal government from doing business with any firm that failed to comply with some
basic guidelines?
It's an academic point right now in any event. The Trump administration working together
with the Ryan House is not going to make legislation or sign executive orders to do anything
remotely like this. Which is one of the many reasons why bashing Democrats has taken off here
I suspect. This election was theirs to lose, and they did everything in their power to toss it.
You do realize that the wealthy are both part of and connected to the legislative branch
of every single country on this planet right? As long as that remains so (as it has since the
dawn of humans) then good luck trying to cap any sort of hording behavior of the wealthy.
As someone who grew up in and participated in those discussions:
1) It was "women's studies" back then. "Gender studies" is actually a major improvement in
how the issues are examined.
2) We'd already long since lost by then, and we were looking to make our own lives better.
Creating a space where we could have good sex and a minimum of violence was better. Reagan's election,
and his re-election, destroyed the Left.
I feel like this piece could use the yellow waders as well. Instead of simply repeating myself
every time these things come up, I proffer an annotation of a important paragraph, to give a sense
of what bothers me here.
The post-structural revolution transpired [in the U.S.] before and during the end of the
Cold War just as the collapse of the Old Soviet Union denuded the global Left of its raison
detre. But its social justice impulse didn't die, [a certain, largely liberal tendency in the
North American academy] turned inwards from a notion of the historic inevitability of the decline
of capitalism and the rise of oppressed classes, towards the liberation of oppressed minorities
within capitalism[, which, if you paid close attention to what was being called for, implied
and sometimes even outright demanded clear restraints be placed upon the power of capital in
order to meet those goals], empowered by control over the [images, public statements, and widespread
ideologiesi.e. discourse {which is about more than just language}] that defined who they were.
The post-structural turn was just as much about Derrida at Johns Hopkins as it was about Foucault
trying to demonstrate the subtle and not-so-subtle effects of power in the explicit context of
the May '68 events in France. The economy ground to a halt, and at one point de Gaulle was so
afraid of a violent revolution that he briefly left the country, leaving the government helpless
to do much of anything, until de Gaulle returned shortly thereafter.
Foucault was not entirely sympathetic to the Left, at least the unions, but he was trying to
articulate a politics that was just as much about liberation from capitalism as classic Marxism.
To that end, discourse analysis was the means to discovering those subtle articulations of power
in human relations, not an end in itself as it was for, say, Barthes.
A claim is being made here regarding the "global left" that clearly comes from a parochial,
North American perspective. Indian academics, for one, never abandoned political economy for identity
politics, especially since in India identity politics, religion, regionalism, castes, etc. were
always a concern and remain so. It seems rather odd to me that the other major current in academia
from the '90s on, namely postcolonialism, is entirely left out of this story, especially when
critiques of militarism and political economy were at the heart of it.
The saddest point of the events of '68 is that looking back society has never been so equal
as at that point in time. That was more or less the time of peak working class living standard
relative to the wealthy classes. It is no accident, at least in my book, that these mostly bourgeois
student activists have a tard at the end of their name in French: soixante-huitards.
In the Sixites the "Left" had control of the economic levers or power - and by Left I mean
those interested in smaller differences between the classes. There is no doubt the Cold War helped
the working classes as the wealthy knew it was in their interest to make capitalism a showcase
of rough egalitarianism. But during the 60's the RIght held cultural sway. It was Berkeley pushing
Free Speech and Lenny Bruce trying to break boundaries while the right tried to keep the Overton
Window as tight and squeaky clean as possible.
But now the "Right" in the sense of those who want to increase the difference between rich
and poor hold economic power while the Left police culture and speech. The provocateurs come from
the right nowadays as they run roughshod over the PC police and try to smash open the racial,
gender. and sexual orientation speech restrictions put in place as the left now control the Overton
Window.
The Left and Liberal are two different things entirely.
In the UK we have three parties:
Labour the left
Liberal middle/ liberal
Conservative the right
Mapping this across to the US:
Labour X
Liberal Democrat
Conservative Republican
The US has been conned from the start and has never had a real party of the Left.
At the end of the 19th and beginning of the 20th Century US ideas changed and the view of those
at the top was that it would be dangerous for the masses to get any real power, a liberal Democratic
party would suffice to listen to the wants of the masses and interpret them in a sensible way
in accordance with the interests of the wealthy.
We don't want the masses to vote for a clean slate redistribution of land and wealth for heaven's
sake.
In the UK the Liberals were descendents of the Whigs, an elitist Left (like the US Democrats).
Once everyone got the vote, a real Left Labour party appeared and the Whigs/Liberals faded
into insignificance.
It is much easier to see today's trends when you see liberals as an elitist Left.
They have just got so elitist they have lost touch with the working class.
The working class used to be their pet project, now it is other minorities like LGBT and immigration.
Liberals need a pet project to feel self-righteous and good about themselves but they come
from the elite and don't want any real distribution of wealth and privilege as they and their
children benefit from it themselves.
Liberals are the more caring side of the elite, but they care mainly about themselves rather
than wanting a really fair society.
They call themselves progressive, but they like progressing very slowly and never want to reach
their destination where there is real equality.
The US needs its version of the UK Labour party a real Left people who like Bernie Sanders
way of thinking should start one up, Bernie might even join up.
In the UK our three parties all went neo-liberal, we had three liberal parties!
No one really likes liberals and they take to hiding in the other two parties, you need to
be careful.
Jeremy Corbyn is taking the Labour party back where it belongs slowly.
Imagine inequality plotted on two axes. Inequality between genders, races and cultures is what liberals have been concentrating on.
This is the x-axis and the focus of identity politics and the liberal left.
On the y-axis we have inequality from top to bottom. 2014 "85 richest people as wealthy as poorest half of the world"
2016 "Richest 62 people as wealthy as half of world's population"
Doing the maths and assuming a straight line .
5.4 years until one person is as wealthy as poorest half of the world.
This is what the traditional left normally concentrate on, but as they have switched to identity
politics this inequality has gone through the roof. They were over-run by liberals.
Some more attention to the y-axis please.
The neoliberal view L
As long as everyone, from all genders, races and cultures, is visiting the same food bank this
is equality.
left traditional left y-axis inequality
liberal elitist left x -axis inequality (this doesn't affect my background of wealth and privilege)
labor is being co-opted by the right: the Republican Workers Party I think this rhymes with
Fascist. But then, in a world soon to be literally scrambling for high ground and rebuilding housing
for 50 million people the time honored "worker" might actually have a renaissance.
Identity politics does make democrats lose. The message needs to be economic. It can have the
caveat that various sub groups will be paid special attention to, but if identity is the only
thing talked about then get used to right wing governments.
Empowerment is not just about language, it's about capital, who's got it, who hasn't
and what role government plays between them.
Empowerment is very much about capital, but the Left has never had the cajones to
stare down and take apart the Right's view of 'capital' as some kind of magical elixir that mysteriously
produces 'wealth'.
I ponder my own experiences, which many here probably share:
First: slogging through college(s), showing up to do a defined list of tasks (a 'job', if you
will) to be remunerated with some kind of payment/salary. That was actual 'work' in order to get
my hands on very small amounts of 'capital' (i.e., 'money').
Second: a few times, I just read up on science or looked at the stock pages and did a little
research, and then wrote checks that purchased stock shares in companies that seemed to be exploring
some intriguing technologies. In my case, I got lucky a few times, and presto! That simple act
of writing a few checks made me look like a smarty. Also, paid a few bills. But the simple
act of writing checks cost me n-o-t-h-i-n-g in terms of time, energy, education, physical or mental
exertion.
Third: I have also had the experience of working (start ups) in situations where - literally!!!
- I made less in a day in salary than I'd have made if I'd simply taken a couple thousand dollars
and bought stock in the place I was working.
To summarize:
- I've had capital that I worked long and hard to obtain.
- I've had capital that took me a little research, about one minute to write a check, and brought
me a handsome amount of 'capital'. (Magic!)
- I've worked in situations in which I created MORE capital for others than I created for myself.
And the value of that capital expanded exponentially.
If the Left had a spine and some guts, it would offer a better analysis about what 'capital'
is, the myriad forms it can take, and why any of this matters.
Currently, the Left cannot explain to a whole lot of people why their hard work ended up in
other people's bank accounts. If they had to actually explain that process by which people's hard
work turned into fortunes for others, they'd have a few epiphanies about how wealth is actually
created, and whether some forms of wealth creation are more sustainable than other forms.
IMVHO, I never saw Hillary Clinton as able to address this elemental question of the nature
of wealth creation. The Left has not traditionally given a shrewd analysis of this core problem,
so the Right has been able to control this issue. Which is tragic, because the Right is trapped
in the hedge fund mentality, in the tight grip of realtors and mortgage brokers; they obsess on
assets, and asset classes, and resource extraction. When your mind is trapped by that kind of
thinking, you obsess on the tax code, and on how to use it to generate wealth for yourself. Enter
Trump.
One small correction: Smith is not an Ivy League school, it is one of the "Seven Sisters:
Ivy League:
Brown
Columbia
Cornell
Dartmouth
Harvard
Penn
Princeton
Yale
Seven Sisters:
Barnard
Bryn Mawr
Mount Holyoke
Radcliffe
Smith
Vassar
Wellesley
A much more nuanced discussion of the primacy of identity politics on the Left in Britain and
the US is
http://www.counterpunch.org/2016/11/29/prospects-for-an-alt-left/
"Prospects for an Alt-Left," November 29, 2016, by Elliot Murphy, who teaches in the Division
of Psychology and Language Sciences at University College, London.
And let's not forget that identity politics arose in the first place because of genuine discrimination,
which still exists today. In forsaking identity politics in favor of one of class, we should not
forget the original reasons for the rise of the phenomena, however poorly employed by some of
its practitioners, and however mined by capitalism to give the semblance of tolerance and equality
while obscuring the reality of intolerance and inequality.
Trivially, I would think the last thing to do is adopt the "alt-" moniker, thereby cementing
the impression in the mind of the public that the two are in some sense similar.
The blogger Lord Keynes at Social Democracy for the 21st Century at blogspot suggests Realist
Left instead of alt-left. I think how people are using the term "identity politics" at the moment
isn't "actual anti-racism in policy and recruitment" but "pandering to various demographics to
get their loyalty and votes so that the party machine doesn't have to try and gain votes by doing
economic stuff that frightens donors, lobbyists and the media". Clinton improved the female vote
for Democratic president by 1 percentage point, and the black and Latino shares of the Republican
were unchanged from Romney in 2012. Thus, identity politics is not working when the economy needs
attention, even against the most offensive opponent.
So to repress class conflicts, the kleptocracy splintered them into opposition between racists
and POC, bigots and LGBTQ, patriarchal oppressors and women, etc., etc. The US state-authorized
parties used it for divide and rule. The left fell for it and neutered itself. Good. Fuck the
left.
Outside the Western bloc the left got supplanted with a more sensible opposition: between humans
and the overreaching state. That alternative view subsumes US-style identity politics in antidiscrimination
and cultural rights. It subsumes traditional class struggle in labor, migrant, and economic rights.
It reforms and improves discredited US constitutional rights, and integrates it all into the concepts
of peace and development. It's up and running with binding
law and authoritative
institutions
.
So good riddance to the old left and the new left.
Human rights have already replaced
them in the 80-plus per cent of the world represented by UNCTAD and the G-77. That's why the USA
fights tooth and nail to keep them out of your reach.
To All Commenters: thanks for the discussion. Many good, thoughtful ideas/perspectives.
Mine? Living in California (a minority white populace, broad economic engine, high living expenses
(and huge homeless population) and a leader in alternative energy: Trump is what happens when
you don't allow the "people" to vote for their preferred candidates (Bernie) and don't listen
to a select few voters in key electoral states (WI,MI,PA).
The electorate is angry (true liberals at the Dems, voters in select electoral states at "everything").
If democracy is messy, then that's what we've got; a mess. Unfortunately, it's coming at the absolutely
wrong time (Climate Change, lethal policing, financial elite impunity).
Hold this same election with different (multiple) candidates and the outcome is likely different.
In the end, we all need to work and demand a more fair and Just society. (Or California is likely
to secede.)
"Meanwhile the global Left looked on from its Ivory Tower of identity politics and was pleased.
Capitalism was spreading the wealth to oppressed brothers and sisters, and if there were some
losers in the West then that was only natural as others rose in prominence."
I can only imagine the glee of the wealthy feminists at Smith while they witnessed the white,
lunch pailed, working class American male thrown out of work and into the gutter of irrelevance
and despair. The perfect comeuppance for a demographic believed to be the arch-nemesis of women
and minorities. Nothing seems quite so fashionable at the moment as hating white male Republicans
that live outside of proper-thinking coastal enclaves of prosperity. Unfortunately I fail to see
how this attitude helps the country. Seems like more divide and conquer from our overlords on
high.
just more whining from the Weekly Standard. While men may have been disproportionately displaced
in jobs that require physical strength, many women (nurses?) likely lost their homes during the
Great Financial Scam and its fallout.
The enemy is a rigged political, financial, and judicial system.
Identity Politics gestated for a while before the 90s. Beginning with a backlash against Affirmative
Action in the 70s, the Left began to turn Liberal. East Coast intellectuals who were anxious they
would be precluded from entering the best schools may have been the catalyst (article from Jacobin
I think).
But certainly the fall of the USSR was the thing that forced capitalism's hand. At that
point capitalism had no choice but to step up and prove that it could really bring a better life
to the world.
A Minsky event of biblical proportions soon followed (it only took about 10 years!)
and now all is devastation and nobody has clue. But the 1990 effort could have been in earnest.
Capitalists mean well but they are always in denial about the inequality they create which finally
started a chain reaction in "identity politics" as reactions to the stress of economic competition
bounced around in every society like a pinball machine. A tedious and insufferable game which
seems to have culminated in Hillary the Relentless. I won't say capitalism is idiotic. But something
is.
"Perhaps the NC commentariat could define up and down versions of each of these political
philosophies (ie. left and right) and start to take control of the framing."
Well, I'll have a first go, since I was around at the time.
Left and Right only really make sense in the context of the distribution of power and wealth,
and only when there is a difference between them about that distribution. This was historically
the case for more than 150 years after the French Revolution. By the mid-1960s, there was a sense
that the Left was winning, and would continue to win. Progressive taxation, zero unemployment,
little real poverty by today's standards, free education and healthcare . and many influential
political figures (Tony Crosland for example) saw the major task of the future as deciding where
the fruits of economic growth could be most justly applied.
Three things happened that made the Left completely unprepared for the counter-attack in the 1970s.
First, simple complacency. When Thatcher appeared, most people thought she'd escaped from a Monty
Python sketch. The idea that she might actually take power and use it was incredible.
Secondly, the endless factionalism and struggles for power within the Left, usually over arcane
points of ideology, mixed with vicious personal rivalries. The Left loves defeats, and picks over
them obsessively, looking for someone else to blame.
Third, the influence of 1968 and the turning away from the real world, towards LSD and the New
Age, and the search for dark and hidden truths and structures of power in the world. Fueled by
careless and superficial readings of bad translations of Foucault and Derrida, leftists discovered
an entire new intellectual continent into which they could extend their wars and feuds, which
was much more congenial, since it involved eviscerating each other, rather than seriously taking
on the forces of capitalism and the state.
And that's the very short version. We've been living with the consequences ever since. The
Left has been essentially powerless, and powerlessness, of course, corrupts. There's always someone
weaker than you, which is why identity politics is essentially a conservative, disciplining force,
with a vested interest in the problems it has chosen to identify continuing, or it would have
no reason to exist.
So until class-based politics and struggles over power and money re-start (if they ever do) I
respectfully suggest that "Left" and "Right" be retired as terms that no longer have any meaning.
" powerlessness, of course, corrupts. There's always someone weaker than you, which is
why identity politics is essentially a conservative, disciplining force, with a vested interest
in the problems it has chosen to identify "
Yes. As long as the doyens of identity politics don't have any real fear of being homeless
they can happily indulge in internecine warfare. It's a lot more fun than working to get $20/hour
for a bunch of snaggle-toothed guys who kind of don't like you.
I read: "Traditional dialectical history was being supplanted by a new suite of studies based
around truth as "discourse". Driven by the French post-modern thinkers of the 70s and 80s, the
US academy was adopting and adapting the ideas Foucault, Derrida and Barthe to a variety of civil
rights movements that spawned gender and racial studies."
Of course, I have been a college professor since the late 1970s. On the other hand, I am a
physicist. The notion that truth is discourse is, in my opinion, daft, and says much about the
nature of the modern liberal arts, at least as understood by many undergraduates. I have actually
heard of the folks referenced in the above, and to my knowledge their influence in science, engineering,
technology, and mathematicsthe academic fields that are in this century actually central*is
negligible.
*Yes, I am in favor of a small number of students becoming professional historians, dramatists,
and composers, but the number of these is limited.
Identity politics is a disaster ongoing for the Democratic Party, for reasons they seem to
have overlooked. First, the additional identity group is white. We already see this in the South,
where 90% of the white population in many states votes Republican.
When that spreads to the rest
of the country, there will be a permanent Republican majority until the Republicans create a new
major disaster.
Second, some Democratic commentators appear to have assumed that if your forebearers
spoke Spanish, you can not be white. This belief is properly grouped with the belief that if your
forebearers spoke Gaelic or Italian, you were from one of the colored races of Europe (a phrase
that has faded into antiquity, but some of my friends specialize in American history of the relevant
period), and were therefore not White.
Identity politics is a losing strategy, as will it appears
be noticed by the losers only after it is too late.
An extremely important point, but overblown in a way that may reflect the author's background
and is certainly rhetorical.
So soon we forget the Battle of Seattle. The Left has been opposed to globalization, deregulation,
etc., all along. Partly he's talking about an academic pseudo-left, partly confusing the left
with the Democrats and other "center-left," captured parties.
That doesn't invalidate his point. If you want to see it in full-blown, unadorned action, try
Democrat sites like Salon and Raw Story. A factor he doesn't do justice to is the extreme self-righteousness
that accompanies it, supported, I suppose, by the very real injustices perpetrated against minorities
and women, not a minority.
The whole thing is essentially a category error, so it would be nice to see a followup that
doesn't perpetuate the error. But it's valuable for stating the problem, which can be hard to
present, especially in the face of gales of self-righteousness.
Well said. An excellent attack on 'identity politics.'
I mean, Barack Obama was our first black president, but most blacks didn't do very well.
George W. Bush was our first retard president, and most people with cognitive handicaps didn't
do very well.
But we can boil it all down to something even simpler and more primal: divide and conquer.
I researched Dean's statements about austerity to try to understand why a man who opposed the
DLC would be so enthusiastic about inflicting austerity on the working class. I found part
of the answer. Dean was Vermont's governor. Dean explained to a conservative "
Squawk Box "
host why he supported austerity based on his experience as a governor.
There's a balance sheet that has to be met here and every Governor knows that, both Republicans
and Democrats. And you got to do that when you're the President.
The first sentence is correct. The second sentence is false. States do not have sovereign
currencies. The United States has a sovereign currency. A nation with a sovereign currency
is nothing like a state when it comes to fiscal policy or a household. I cannot explain why
Dean does not understand the difference and has apparently never read an economic explanation of
the difference. But we can fill that gap. Again, I urge his supporters who have the ability
to bring serious policy matters to his attention to intervene. Dean is flat out wrong because
he does not understand sovereign currencies. The consequences of his error are terrible.
They would lock the Democratic Party into the continuing the long war on the working class through
austerity. That is a prescription for disaster for the Nation and the Democratic Party.
Progressive Democrats enlisted in the New Democrats' austerity wars because they seemed to be
politically attractive. The political narrative was as simple as it was false. The austerity
creation myth was told first by Bob Woodward in the course of writing his sycophantic ode to Greenspan
as the all-knowing "Maestro" of the economy. Bill Clinton, as President-Elect, was given an
economics lecture by Alan Greenspan. The economics lecture from an Ayn Rand groupie was
(shock) that austerity was good and New Deal stimulus was evil. Bill's genius was taking the
"Maestro's" words as revealed truth and turning his back on the New Deal. Bill embraced austerity.
The economy grew. Bill ran a budget surplus the holy grail of austerity. Bill was followed
by Bush under whose administration economic growth slowed and the federal deficits reemerged.
There was a Great Recession.
The creation myth was clear. The newly virtuous New Democrats (after instruction in economics
by Saint Greenspan) embraced austerity and all was good. The vile Republicans, hypocrites all,
had renounced the true faith of austerity and they produced mountains of evil debt that caused poor
economic growth.
Dean pushed this narrative in his Squawk Talk appearance. When asked to explain the specific
Bush policies that he claimed were to blame for poor growth continuing under President Obama, Dean
went immediately and exclusively to Bush's increases in the federal "debt" to answer the question.
"The biggest ones are the deficits that were run up . The deficits were enormous."
The New Democrats' narrative, which Dean parroted, is false. One of the definitive refutations
of the Greenspan (and Robert Rubin) as Genius myth was by the economists
Michael
Meeropol and Carlos F. Liard-Muriente in 2007. Their refutation was inherently incomplete
because it was "too early" the collapse of the housing bubble in 2007, the 2008 financial crisis
and the Great Recession were vital facts that helped reduce the myth to the level of farce.
These facts were unavailable to academic authors publishing in 2007. The authors discuss the
enormous role that the stock bubble played in the Clinton expansion, but they do not discuss the
housing bubble's contribution.
Any tale that begins with Alan Greenspan providing Bill Clinton with the secret to economic success
is justly laughable today. Clinton was our luckiest president when it came to economics.
His expansion was largely produced by the high tech stock bubble. When it collapsed, the housing
bubble, explicitly encouraged by Greenspan as a means of avoiding a severe recession, took up much
of the slack. Bush eventually inherited from Clinton a moderate recession that led inevitably
to moderately increased (not "enormous") federal deficits. The housing bubble then hyper-inflated,
bringing the economy rapidly out of the moderate recession. The hyper-inflation, of the housing
bubble, however, was driven by the three most destructive epidemics of financial fraud in history
and it caused a global financial crisis and the Great Recession. A great recession leads inevitably
to a very large increase in the federal budget deficit.
Greenspan, Bob Rubin, and Bill Clinton were lucky in their timing for a time. The historical
record in the U.S. demonstrates that periods of material federal budget surpluses are followed with
only modest lags by depressions and, now, the Great Recession. Fortunately, such periods of
running material budget surpluses have been unusual in our history. As my colleagues have explained
in detail, the U.S., which is extremely likely to run balance of trade deficits, should typically
run budget deficits.
We all understand how attractive the myth of the virtuous and frugal Dems producing great economic
results under Clinton while the profligate Republicans produced federal deficits and poor economic
growth was to Democratic politicians. But the Dems should not spread myths no matter how politically
attractive they are. The catastrophic consequences of President Obama and Hillary Clinton coming
to believe such myths were shown when, as I have just described in several columns, they promised
to lead the long war against the working class that is austerity.
If people like Dean focused on the origins of the Clinton creation myth they would run from its
lies. The original actual creation myth is found in the book of Woodward. The brilliant
Greenspan converted the young Bill Clinton by exposing him to the one true faith (theoclassical economics)
and successfully calling on Clinton to renounce the devil (FDR) and all his work (the New Deal) and
to sit at the (far) right hand of Ayn Rand. The result was economic nirvana. Politically,
that's a terrible creation myth for Democrats to tell around the campfire or to voters. Economically,
it's a lie, indeed, a farce.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate
professor of economics and law at the University of Missouri-Kansas City. Jointly published at
New Economic Perspectives Soulipsis
November 28, 2016 at 6:30 am
This is one of the arguments, the making of which I've never understood. How could Dean not
know what he's doing by supporting austerity? How could the 0.001% not know? Of course they know!
Sometimes I think hyperacademics like who can be found trolling around this website are so involved
in the prestige of their discipline that they lose track of the world of wordless import that
makes up most of reality. This is why illiterate people are sometimes very wise, they have no
choice but to remain immersed in the wisdom of the Creation. I think Black and others are wasting
their breath on explanations and urgings such as this. And I think the brutality of Daesh and
the Saudis is the brutality of the 0.001%, and it's a delusion to think they don't have the social
model that is on display in Syria planned for the domestic U.S. market. What else is the 2012
NDAA for? NSPD 51, and the National Incident Management System. It's coming, and Dean is just
a little player. He probably got photographed doing something he shouldn't've and now he's stuck.
Whatever, how could he not know? He knows. Bill Clinton doesn't or didn't know? Please.
I am no economist, but it seems to me that this power of sovereign currency (to borrow increasing
amounts indefinitely) only works so long as people believe that they will be repaid. If one continues
to to rack up an exponentially growing debt, eventually that belief will be challenged. There
are numerous areas of expenses which could be trimmed, but they generally involve a relinquishing
of our empire.
One key to maintaining the appearance of sustainability for increasing debts is making sure
much of the deficit spending is going into productive infrastructure investments. In this case
the increasing debt will be accompanied by actual growth.
It puzzles me that private parties are allowed to buy sovereign debt. It changes the debt from
sovereign to private. Making it no longer an instrument of use but of exchange. Selling sovereign
debt destroys sovereignty. Much better to force the privateers to come up with their own investments
for which they bond and trade with each other and leave sovereign money out of it. The banksters
and their ilk like George Soros, King of the Vigilantes, should be detained until they pay back
everything they embezzled. and etc. It's just too easy for banksters to buy sovereign debt (with
a commodity they are legally allowed to create at the sovereign's expense) and then demand interest
on it. So clearly Howie Dean is a ditz.
I've read similar things in comments at NC and elsewhere about California Governor Jerry Brown,
whose left wing moonbeam reputation doesn't match his big business friendly actions.
Dean has his failings, but being the first Governor to sign a Civil Unions bill, implementing
a 99%+ child health care access law, and creating a systematic way for elementary school teachers
to get resources to families with kids that are in trouble is a pretty sound Progressive legacy.
It is not clear to me that Austerity is a long war against the working class. It might be that
Austerity turns out class neutral, or even pro-working class, depending on how gov't expenditures
shortages are applied across sectors? If Austerity is a war against the working class then the
opposite of Austerity, Stimulus, necessarily is pro-working class but we have seen that Stimulus
might be used to bail out non-working class sectors leaving working class wages and employment
opportunities depressed.
I suspect it is the way it is applied. The shocking hypocrisy of the current pro-austerity
people is what jars Black I guess. I mean these same austerity people were for tax cuts for the
rich, giving trillions to Wall Street, forgiving their (real) crimes, and spending trillions more
on wars whose result was to cause misery for millions of people and make the world an even less
safe place. And then they talk about keeping a tight budget? Hell needs to add a ninth circle
for these people.
Man, I love this site. I get more out of the comments than the articles sometimes. Your paragraph
does more to encapsulate reality than do ten long pages of learned professors.
Vatch, re "Moonbeam Brown", just google
"Something's not right about this California water deal, L.A. Times"
Austerity is primarily against the working class because it is deflationary. It benefits creditors
over debtors. And creditors are invariably the wealthy (i.e. the owners of capital). A moderately
inflationary fiscal/monetary policy with a focus on full employment puts power in the hand of
workers. An austerity policy (by which I mean one which puts an emphasis on balancing the books
over employment) gives power to the owners of capital.
> But the Dems should not spread myths no matter how politically attractive they are.
All myths are not created equal. I rue the day when "myth" became pejorative.
I dare say Prof. Black lives by one. If Jung was right, and I think he was, we all do, albeit
ignorantly, as in, we ignore their functioning (even my beloved science is mythological, but that
doesn't make it untrue). And his recasting of the myth of austerity in biblical terms is as potent
as it is funny. Our denigration of myths is complete enough that Prof. Black can say the above,
and yet do some very effective countermyth-making nonetheless.
Do the high priests of economics and politics really believe their public myth-making? Or is
their a private understanding that better fits the phenomena?
I know I must sound like a broken record, but due to its regrettable unfamiliarity, this bears
repeating.
1. The first function of mythology [is] to evoke in the individual a sense of grateful,
affirmative awe before the monstrous mystery that is existence
2. The second function of mythology is to present an image of the cosmos, an image of the
universe round about, that will maintain and elicit this experience of awe. [or] to present
an image of the cosmos that will maintain your sense of mystical awe and explain everything
that you come into contact with in the universe around you.
3. The third function of a mythological order is to validate and maintain a certain sociological
system: a shared set of rights and wrongs, proprieties or improprieties, on which your particular
social unit depends for its existence.
4. The fourth function of myth is psychological. That myth must carry the individual through
the stages of his life, from birth through maturity through senility to death. The mythology
must do so in accords with the social order of his group, the cosmos as understood by his group,
and the monstrous mystery.
As we all know so well. the myth of neoliberalism is as succinct as it is brutal. "Because
markets" and "Go die," though, don't fulfill all four functions. If I had the economic and financial
chops, I'd examine Saint Alan and the Church of Neoliberalism's mythology methodically and systematically
with the intent to creatively destroy it. But that wouldn't be enough. It'd be helpful to offer
an alternative, but I don't have that, either. Fat lot of good I am.
That's why I like Prof. Black's retelling so much. It puts the absurdity of the pseudo-mythology
of neoliberalism in terms familiar enough that that absurdity stands right out.
And I also dare say what we desperately need now is a fully functioning and genuine mythology
that leads us out of neoliberal hell and into a more perfect union of nature and society. First
party to do so wins the future.
Surprised that Black refers to Dean as a "progressive voice". That has never really been the
case and it's especially not true now. Also surprised that Black supports Ellison whose foreign
policy includes support for a no- fly zone in Libya- mirroring the position held by Clinton.
I sense a connection between this and the peak oil demand article. In the '80's and beyond,
financial services have sought and gained a control economy effect with student loans and more
recently the ACA, and feel that fracking, QE and the housing bubble all fit in there somewhere
as well. Basically it boils down to being easier to make money at the top when they choose where
the income stream comes from, i.e., in the New Deal citizens got money in some form of cash payment,
from SS to welfare, and could choose to spend the money on what they wanted to spend it on, which
in turn caused uncertainty in the finance arena, not so much that they couldn't survive, but the
financiers could envision a better world for themselves, enter student loans and now any kid without
wealthy parents has a lifetime of unpayable debt, a drag on their professional income, or no advanced
education with it's implicit restriction on income, or a combo of all three. This same dynamic
led us to the ACA which is, as opposed to a medicare style plan that could potentially curtail
costs, become little more than a payment stream, a class marker, and has nothing to do with healthcare
except in the sense that high costs make indebted heath industry workers able to pay their own
student loan, and a class warfare tool such that those wealthy healthcare industroids can separate
their offspring from the herd by being able to pay for their offspring's education, as it does
with the finance industry that manages the payment stream. I don't currently see this dynamic
changing, alas but maybe the newfound vigor of the purple dems could be mobilized in this direction
if they can ignore the payoffs for doing nothing.
As to the hyper inflation comment, I think any renter who has struggled with the disruptions caused
by increased rents would say yes, that's hyperinflation, and indeed feels a lot like needing a
wheelbarrow of cash to pay.
Let's talk about reality. For most folks, more austerity is going to kill us. We are so squeezed
now that we can barely pay our bills and save our homes. We have rampant price inflation, which
both the government and the media pretend does not exist. And the latest figures for Xmas shopping
show that although more people are buying stuff, they are spending less money. If the idiots running
the country think tax breaks for the rich will boost the economy, then they have learned nothing
from the last 30 years.
ISTR hearing that, if you want to grow your business, you need to get more people to buy more
of your goods or services more often. Having more people buying less? Doesn't sound like a recipe
for success.
I'm glad someone is saying that a correct understanding of the economy is where the Democrats
need to be. Imagine the impact if a candidate ran on payroll tax relief, expanded SS and a job
guranteee.
I like Keith Ellison as well, but I can't find anything about his economic policies. If Dean's
economics are disqualifying, and Ellison suggested as an alternative, shouldn't we know if he's
an improvement?
The Democrats are going to have to completely reinvent themselves if they ever want to get
a vote or a dollar from me again.
I went to a Democratic Party whine and cheese party the other day where the local "leadership"
tried to harness some kind of crowd energy against Trump based on the mere fact that they had
a D in front of their names.
The delicious moment came in the Q&A. I waited until after the usual regurgitations of racismphobiahatethreatsdisaster
about Trump to ask my question:
"You had a winner in Bernie and your party chose that corrupt disaster Hillarynow we're supposed
to trust you to lead us?" I thought the moderator was going to have a stroke. Her face turned
an appropriate shade of blue-purple.
An agreeing buzz of people around me. It was positively sadistic watching the scrambling of
the Democratic excusemakers shuffling their papers.
It is worse than you say for the Dems. Trump has once indicated that he understands the nature
of a sovereign currency. If he wasn't bullshitting, then the Dems are in for an economic shock,
at the very least.
Thanks for this post. Great final paragraph. The DLC neolib Dems' greatest achievement has
been in presenting this terrible destruction as virtuous. 'We have to destroy the 90%'s economy
in order to save it.'
1920s/2000s high inequality, high banker pay, low regulation, low taxes for the wealthy,
robber barons (CEOs), reckless bankers, globalisation phase
1929/2008 Wall Street crash
1930s/2010s Global recession, currency wars, rising nationalism and extremism
Milton Freidman used the old 1920s economics, neoclassical economics, as his base but didn't
fix any of its problems.
Wall Street did exactly the same thing.
Jim Rickards ("Currency Wars" and "The Death of Money") has explained how the removal of Glass-Steagall
allowed Wall Street to repeat 1929.
In 1929, they carried out margin lending into the US stock market to artificially inflate its
value. They packaged up these loans in the investment side of the business to sell them on.
In 2008, they carried out mortgage lending into the US housing market to artificially inflate
its value. They packaged up these loans in the investment side of the business to sell them on.
The FED responded with monetary policy that didn't work again, the "New Deal" pulled the US
out in the end.
In 1929, the FED wasn't quite so quick with monetary policy and stocks were a much more liquid
asset and so the crash was so fast no one had a chance to deal with it as it was occurring.
Monetary policy did stop the initial crash in asset prices but didn't reflate the economy;
you need a "New Deal" for that.
The only real difference.
Why are multi-nationals hoarding cash and not investing?
Oh look it's Keynes's liquidity trap, its exactly the same.
Keynes studied the Great Depression and noted monetary stimulus lead to a "liquidity trap".
Businesses and investors will not invest without the demand there to ensure their investment
will be worthwhile.
The money gets horded by investors and on company balance sheets as they won't invest.
Cutting wages to increase profit just makes the demand side of the equation worse and leads
you into debt deflation.
Then there is the dutiful austerian Angela Merkel who stated that all members of the EU had
"shared sovereignty" and so that was why they had to tighten their belts to the last notch
so the bond buyers could be paid back?
as Thomas Frank says:
"What our modernized liberal leaders offer is not confrontation [with corporate corruption] but
a kind of therapy for those flattened by the free-market hurricane: they counsel us to accept
the inevitability of the situation."
I'm sure this is explained elsewhere but I still am perplexed; states have to pay their debts
but sovereign money-printing governments print money. So why not shift state expenses (schools,
police, garbage pickup, pensions ) to the sovereign government which can print the money to cover
the expense?
That is what that great socialist Richard Nixon did with revenue sharing. The Federal government
gave states block funding, with anti-fraud oversight. Nixon figured that lower levels of governments
had a better sense of their needs than the Feds did.
If the "best of the best" Stephanie Kelton couldn't even get Sanders to break the cycle of
mainstream economic "myths", who you gonna call ? If a simpleton like me can understand and believe
basic MMT principles, I can not imagine the "brainiacs" running the country ( or vying to run
the country) are innocent of the crime (assault with a deadly myth).
Who knows, with some luck, and he seems to be having a ton lately, the presumptive POTUS could
be that accidental MMT'er. But I'm sure he would deny that luck had anything to do with it.
"... I do not understand the financial behavior of shale oil development, no. In the Bakken and the Eagle Ford it was indeed about reserve "growth," as Alex points out. Growth at the expense of profitability. That model failed (look at the debt, debt to asset ratios and losses for operators in those two shale oil plays) because the price of oil collapsed. ..."
"... Now, in spite of that, the Permian is using the same business model; growth at the expense of profitability. It is borrowing billions in the bottom of a price down cycle (it thinks) believing prices have no where to go but up. ..."
"... I think oil prices are a long way away from being high enough to save the shale oil industry. ..."
"... We may be overthinking all this and Alex is right again; it may be a simple matter of everyone taking advantage of a loosey goosey monetary policy in America. Money gets printed, Central Banks give it away, lenders are in desperate need of miniscule yields and CEO's and upper management borrow it, make millions personally on bonuses and incentives for growing reserves, then walk away from the whole shebang (Sheffield) before the loans come due. America looks the other way because they get cheap gasoline. ..."
I do not understand the financial behavior of shale oil development, no. In the Bakken and the
Eagle Ford it was indeed about reserve "growth," as Alex points out. Growth at the expense of profitability.
That model failed (look at the debt, debt to asset ratios and losses for operators in those two shale
oil plays) because the price of oil collapsed.
Now, in spite of that, the Permian is using
the same business model; growth at the expense of profitability. It is borrowing billions in the
bottom of a price down cycle (it thinks) believing prices have no where to go but up.
I would
say this particular shale play might work, except that from the data I see the UR's on those wells
are going to be pitiful at best, far less than the Bakken. Unless it is by the shear number of wells
those operators are not going to have a lot of reserves that will appreciate with rising prices.
It will therefore fail too, just like the others, perhaps for different reasons, I don't know.
I think oil prices are a long way away from being high enough to save the shale oil industry.
We may be overthinking all this and Alex is right again; it may be a simple matter of everyone
taking advantage of a loosey goosey monetary policy in America. Money gets printed, Central Banks
give it away, lenders are in desperate need of miniscule yields and CEO's and upper management borrow
it, make millions personally on bonuses and incentives for growing reserves, then walk away from
the whole shebang (Sheffield) before the loans come due. America looks the other way because they
get cheap gasoline.
Happy
Thanksgiving Mike! This article is for you! The RRC just refused to allow Pioneer to reclassify
oil wells in the Eagle Ford to .. wait for it .GAS WELLS.
I believe Pioneer just admitted the you, Shallow, Alex, and the others have been right all
along about the GOR going up, up and up.
It seems that Pioneer is trying to take advantage of the "high cost gas tax credit" designed
to encourage gas production in HIGH COST low permeable tight gas reservoirs.
Interestingly, this move by Pioneer has initiated a discussion about whether there should
be a new category for classifying wells. Hmmm sounds like the industry is about to hit the
new Texas Legislative session up for some new tax relief to encourage horizontal drilling in
its new favorite geological province the Permian Basin. But it will apply to the Barnett, Haynesville,
Eagle Ford, and all those other disasters.
Happy Thanksgiving to you too, John -- I had actually seen this before. Scoundrels they are,
one and all; Pioneer too, a Texas Company start to finish. The TRRC will roll over in another
year or so, watch.
Despite the CEOs not worrying about profits, I would think at some point the people
buying the bonds or stock of these companies would realize that the Emperor is naked.
Eventually when enough investors get burned, the money will stop flowing. Maybe not in 2016,
and perhaps not in 2017, but if oil prices remain low for the long term as experts in the field
seem to suggest is a likely event (though nobody really knows future oil prices), the money
will dry up. In that case these companies are done.
"... "Our analysis shows we are entering a period of greater oil price volatility (partly) as a result of three years in a row of global oil investments in decline: in 2015, 2016 and most likely 2017," IEA director general Fatih Birol said, speaking at an energy conference in Tokyo. ..."
"... Oil prices have risen to their highest in nearly a month, as expectations grow among traders and investors that OPEC will agree to cut production, but market watchers reckon a deal may pack less punch than Saudi Arabia and its partners want. ..."
"... BMI's outlook is more optimistic than groups like the International Energy Agency, which said last week that the industry might cut spending in 2017 for a third year in a row as companies continue to grapple with weaker finances. Oil prices still hover around $50 a barrel, less than half the level of the summer of 2014. ..."
"... The chart below shows Exxon's E&P capex in 2007-2015 (in US$bn). There was a sharp increase in US capex (both in absolute in relative terms) following the XTO deal. In 2015, the company cut spending both in the US and abroad ..."
Investment in new oil production is likely to fall for a third year in 2017
as a global supply glut persists, stoking volatility in crude markets, the head
of the International Energy Agency (IEA) said on Thursday.
"Our analysis shows we are entering a period of greater oil price
volatility (partly) as a result of three years in a row of global oil
investments in decline: in 2015, 2016 and most likely 2017," IEA director
general Fatih Birol said, speaking at an energy conference in Tokyo.
"This is the first time in the history of oil that investments are
declining three years in a row," he said, adding that this would cause
"difficulties" in global oil markets in a few years.
Oil prices have risen to their highest in nearly a month, as
expectations grow among traders and investors that OPEC will agree to cut
production, but market watchers reckon a deal may pack less punch than Saudi
Arabia and its partners want.
The Organization of the Petroleum Exporting Countries meets next week to try
to finalize to output curbs.
"Our analysis shows that when prices go to $60, we'll make a big chunk of
U.S. shale oil economical and within the nine months to 12 months of time, we
may see a response coming from the shale oil and other high-cost areas," Birol
told Reuters, speaking in an interview on the sidelines of the conference.
"And this may again put downward pressure on the prices."
Birol said that level would be enough for many U.S. shale companies to
restart stalled production, although it would take around nine months for the
new supply to reach the market.
The IEA director general said it is still early to speculate what Donald
Trump's presidency in the United States will have on energy policies.
"Having said that, both U.S. shale oil and U.S. shale gas have a very strong
economic momentum behind them," Birol said.
"Shale gas has significant economic competitiveness today, and we think it
will be so in the next years to come."
Capital spending seen growing 2.5% in 2017 and 7%-14% in 2018
U.S. independents, Asian giants seen spurring spending growth
The oil industry may be ready to open its wallet after two years of
slashing investments.
Companies will spend 2.5 percent more on capital expenditure next year
than they did this year, the first yearly growth in such spending since
2014, BMI Research said in a Sept. 22 report. Spending will increase by
another 7 percent to 14 percent in 2018. It will remain well below the $724
billion spent in 2014, before the worst oil crash in a generation caused
firms to cut back on drilling and exploration to conserve cash, the
researcher said.
North American independent producers, Asian state-run oil companies and
Russian firms are prepared to boost investments next year, outweighing
continued cuts from global oil majors such as Exxon Mobil Corp. and Total
SA, BMI said, based on company guidance and its own estimates. Spending will
increase to a total of $455 billion next year from $444 billion this year,
BMI said.
"North America is where we're really expecting things to turn around,"
Christopher Haines, BMI's head of oil and gas research, said by telephone.
"We've seen a push to really reduce costs, reduce spending and take out any
waste and inefficiency. These companies have gotten to the point where
they're all set up to react."
BMI's outlook is more optimistic than groups like the International
Energy Agency, which said last week that the industry might cut spending in
2017 for a third year in a row as companies continue to grapple with weaker
finances. Oil prices still hover around $50 a barrel, less than half the
level of the summer of 2014.
From what I am reading, Permian hz wells will be drilled in greater numbers in
2017, regardless of price.
These wells are generally less prolific than those in the Bakken and EFS.
However, the money has been raised and therefore it will spent.
To me, a good question is how much money is being diverted away from longer
term projects that will ultimately produce more oil, to drill these Permian
wells?
The Permain wells have no staying power. Under 50 bopd after 24 months is
the rule, not the exception. Under 200,000 cumulative in 60 months is the rule,
not the exception.
"To me, a good question is how much money is being diverted away from longer
term projects that will ultimately produce more oil, to drill these Permian
wells?"
shallow sand
The companies that are postponing longer term projects are not the same
companies that are planning to increase drilling in LTO plays.
"The companies that are postponing longer term projects are not the same
companies that are planning to increase drilling in LTO plays."
I
assumed he meant investment money. If investors want to be in gas and
oil, are they picking the companies with best chance of long-term success
(if there is such a thing anymore)?
ExxonMobil, Chevron, ConnocoPhillips, Hess, Marathon and Oxy all
have significant LTO production and all are, or were considered
international upstream producers.
I agree the supermajors are defensive stocks. But there were
many "growth" stock US companies which explored and produced
offshore/internationally or both, prior to the LTO boom.
Most of large US E&Ps and mid-sized integrateds have divested
their overseas assets during the years of shale boom.
I'm not sure that Exxon and Chevron are planning to increase
their shale exposure in the near term. For Exxon, US upstream
operations were hugely loss-making in 2015-16. And it has
recently made two relatively large discoveries outside US.
AlexS. Are those XOM international discoveries primarily oil
or gas?
Also, for the international assets you refer to
which US companies divested, do you know whether the buyers
are aggressively developing them? Just a guess, but I suspect
maybe not.
11/30 is a big day, hoping for a cut, hard to say if it
occurs whether it will be adhered to, other than by maybe the
Gulf States.
Interesting to
note Nexen is a partner in both ventures, while Hess
and Chevron are in one each.
I agree XOM has sustained significant losses in
North America, but they continue to spend money on new
wells. Had they not spent the money they have in North
America (both shale and tar sands) would the money have
been spent elsewhere. A tough one to know the answer
to.
I recall XOM was going to partner in Russia on
projects and those were halted for political reasons?
Did those projects go ahead without them?
I'm not saying that Exxon stopped
investing in U.S. upstream. My point is that oil
supermajors, like Exxon, Chevron, BP, Shell and Total are
not diverting investments from deep offshore, LNG and
other long-term projects to U.S. shale. They cut upstream
capex both in U.S. and in overseas projects.
The chart below shows Exxon's E&P capex in
2007-2015 (in US$bn). There was a sharp increase in US
capex (both in absolute in relative terms) following the
XTO deal. In 2015, the company cut spending both in the US
and abroad
"... In the second quarter of 2016, the companies reduced production by nearly 930,000 bpd, according to Morgan Stanley. ..."
"... Large oilfields, such as deepwater developments off the coasts of the United States, Brazil, Africa and Southeast Asia, typically take three to five years and billions in investment to develop. ..."
"... "Still, unless investment rebounds relatively soon, this steep downward trend is likely to resume in 2018 and beyond." ..."
"... We haven't even begun to see a "steep downward trend" yet. As to "softening" there is less new production coming on next year, overall and for the IOCs, than this highlighting Canada, Brazil etc. doesn't change that. ..."
"... Also when are they going to actually understand that the companies don't ever "slash" output, like its a choice depletion does it for them. ..."
"... I don't know when peak decent reporting happened but it's well into decline now (another big internet age negative). ..."
"... Also, the author quotes a report by Morgan Stanley (that we haven't seen). Apparently, those "109 listed companies that produce more than a third of the world's oil" are covered by MS equity research team. And changes in their output may not fully reflect trends in overall global oil production. ..."
"... But I agree that articles in Reuters, Bloomberg and other MSM sources often misinterpret third party research. A recent example are numerous article about USGS assessment of TRR in the Wolfcamp formation ..."
The world's listed oil companies have slashed oil output by 2.4 percent so
far this year.
The aggregated production of 109 listed companies that produce more than a
third of the world's oil fell in the third quarter of 2016 by 838,000 barrels
per day from a year earlier to 33.88 million bpd, data provided by Morgan
Stanley showed.
In the second quarter of 2016, the companies reduced production by
nearly 930,000 bpd, according to Morgan Stanley.
The firms include national oil champions of China, Russia and Brazil,
international producers such as Exxon Mobil and Royal Dutch Shell, as well as
U.S. shale oil producers like EOG Resources and Occidental Petroleum.
The drop in oil companies' output is particularly compelling given the
increase in 2015, when third-quarter production rose by some 1.9 million bpd.
"Clearly, we have seen a large swing in the year-on-year trend in
production, from strong growth as recent as a year ago, now to steep decline.
This is the outcome of the strong cutbacks in investment," Morgan Stanley
equity analyst Martijn Rats said.
Capital expenditure for the companies combined more than halved from $136
billion in the third quarter of 2014 to $58 billion in the same period this
year, according to Rats.
Oil executives and the International Energy Agency have warned that a sharp
drop in global investment in oil and gas would result in a supply shortage by
the end of the decade.
Large oilfields, such as deepwater developments off the coasts of the
United States, Brazil, Africa and Southeast Asia, typically take three to five
years and billions in investment to develop.
Cost reductions and increased efficiencies have only partly offset the drop
in production as a result of the lower investment. Technological advancements
have also helped boost onshore U.S shale production.
"These declines should temporarily soften in 2017 as new fields are coming
on-stream in Canada, Brazil, the former Soviet Union and U.S. tight oil
probably stabilizes," Rats said.
"Still, unless investment rebounds relatively soon, this steep downward
trend is likely to resume in 2018 and beyond."
We haven't even begun to see a "steep downward trend" yet. As to
"softening" there is less new production coming on next year, overall and
for the IOCs, than this highlighting Canada, Brazil etc. doesn't change
that.
When is someone in Reuters or Bloomberg going to figure out that 2017 + 3
(or 5) + 1 (for FEED and FID approval at the beginning and ramp up at the
end) = 2021 (or 2023) so there is no way to cover drops "at the end of the
decade" now.
Also when are they going to actually understand that the
companies don't ever "slash" output, like its a choice depletion does it
for them.
And how about this paragraph
"Cost reductions and increased efficiencies have only partly offset
the drop in production as a result of the lower investment. Technological
advancements have also helped boost onshore U.S shale production."
He/she has suddenly started to talk about company finances rather than
production, but without actually telling the reading public.
Cost reductions caused the drop for heavens sake. "Increased
efficiencies" and "technological advancements" do you think the author has
the faintest idea what that actually means and how it is related to anything
else he says.
I don't know when peak decent reporting happened but it's well into
decline now (another big internet age negative).
"When is someone in Reuters or Bloomberg going to figure out that 2017 +
3 (or 5) + 1 (for FEED and FID approval at the beginning and ramp up at
the end) = 2021 (or 2023) so there is no way to cover drops "at the end
of the decade" now."
It should be actually 2015 + 3 (or 5), as pre-FID
projects have been posponed since end-2014 early 2015.
Also, the author quotes a report by Morgan Stanley (that we
haven't seen). Apparently, those "109 listed companies that produce more
than a third of the world's oil" are covered by MS equity research team.
And changes in their output may not fully reflect trends in overall
global oil production.
But I agree that articles in Reuters, Bloomberg and other MSM
sources often misinterpret third party research. A recent example are
numerous article about USGS assessment of TRR in the Wolfcamp formation
Tsar Nicholas II: I know what will make them happy. They're children, and they
need a Tsar! They need tradition. Not this! They're the victims of agitators.
A Duma would make them bewildered and discontented. And don't tell me about London and Berlin.
God save us from the mess they're in!
Count Witte: I see. So they talk, pray, march, plead, petition and what do
they get? Cossacks, prison, flogging, police, spies, and now, after today, they will be shot.
Is this God's will? Are these His methods? Make war on your own people?
How long do you think they're going to stand there and let you shoot them? YOU ask ME who's
responsible? YOU ask?
Tsar Nicholas II: The English have a parliament. Our British cousins
gave their rights away. The Hapsburgs, and the Hoehenzollerns too. The Romanovs
will not. What I was given, I will give my son.
"People of privilege will always risk their complete destruction rather than surrender any material
part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the
privileged also feel that their privileges, however egregious they may seem to others, are a solemn,
basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with
that of the rich."
"... The continuing reaction of the liberal elite to the repudiation of the Democratic establishment
by their traditional constituencies of the young and working people is a wonder to behold. They thrash
back and forth between a denial of their failure, and disgust at everyone else they can blame for it.
..."
"... It is frustrating because they do not know how to extract themselves from it, admit their errors
and reform the system, without undermining the very assumptions that entitle them, in their own minds
at least, to rule as the highly honored insiders, the elect of professional accomplishment. ..."
"Listening to the leading figures of the Democratic party establishment, however, you'd never
know it. Cool contentment is the governing emotion in these circles. What they have in mind for
2016 is what we might call a campaign of militant complacency. They are dissociated from the mood
of the nation, and they do not care...
What our modernized liberal leaders offer is not confrontation [with corporate corruption]
but a kind of therapy for those flattened by the free-market hurricane: they counsel us to accept
the inevitability of the situation."
Thomas Frank
"Too many of America's elites-among the super-rich, the CEOs, and many of my colleagues in academia-have
abandoned a commitment to social responsibility. They chase wealth and power, the rest of society
be damned."
Jeffrey Sachs
"This elite-generated social control maintains the status quo because the status quo benefits
and validates those who created and sit atop it. People rise to prominence when they parrot the
orthodoxy rather than critically analyze it. Intellectual regurgitation is prized over independent
thought. Real change in politics or society cannot occur under the orthodoxy because if it did,
it would threaten the legitimacy of the professional class and all of the systems that helped
them achieve their status.
Kristine Mattis, The Cult of the Professional Class
The continuing reaction of the liberal elite to the repudiation of the Democratic establishment
by their traditional constituencies of the young and working people is a wonder to behold. They thrash
back and forth between a denial of their failure, and disgust at everyone else they can blame for
it.
It could not possibly be because of anything they might have done or failed to do. And so they
are caught in a credibility trap.
It is frustrating because they do not know how to extract themselves from it, admit their
errors and reform the system, without undermining the very assumptions that entitle them, in their
own minds at least, to rule as the highly honored insiders, the elect of professional accomplishment.
I am a Marxist economist (Professor of Economics, Mount Holyoke College) and I appreciate Branko
Milanovic's open-mindedness and his efforts in a recent post on his blog to educate economists who
often have a crude and superficial misunderstanding of Marx's labor theory of value.
For context for my comments on Milanovic, I will first say a few words about my interpretation
of Marx's labor theory of value (LTV). In my view, Marx's LTV is primarily a macro theory and
the main question addressed in Marx's macro LTV is the determination of the total profit (or surplus-value)
produced in the capitalist economy as a whole. Profit is the main goal of capitalist economies
and should be a key variable in any theory of capitalism. Marx's theory of the total profit
is that profit is the difference between the value produced by workers and the wages they are paid,
i.e. that profit is produced by the "surplus labor" of workers.
I argue that Marx's "surplus labor" theory of profit has very significant and wide-ranging explanatory
power. Marx's theory provides straight-forward and robust explanations of the following important
phenomena of capitalist economies: conflicts between capitalists and workers over wages, and
over the length of the working day, and over the intensity of labor (i.e. how hard workers work,
which determines in part how much value they produce); endogenous technological change (in order
to reduce necessary labor and increase surplus labor and surplus-value); increasing concentration
of capital and income(i.e. increasing inequality); the trend and fluctuations in the rate of profit
over time; and endogenous cycles due to fluctuations in the rate of profit rate of profit.
(A more complete discussion of the explanatory power of Marx's theory of profit is provided in my
" Marx's Economic Theory: True or False? A Marxian Response to Blaug's Appraisal, " in Moseley (ed.),
Heterodox Economic Theories: True or False?, Edward Elgar, 1995).
This wide-ranging explanatory power of Marx's surplus labor theory of profit is especially impressive
when compared to mainstream economics. In mainstream macroeconomics, there is no theory of
profit at all; profit (or the rate of profit) is not even a variable in the theory! I was shocked
when I realized in graduate school this absence of profit in mainstream macro, and am still shocked
that there is no effort to include profit. Indeed, DSGE models go in the opposite direction
and many models do not even have firms!
Mainsteam micro does have a theory of profit (or interest) the marginal productivity theory
of distribution but it is a weak and largely discredited theory. Marginal productivity theory
has been shown by the capital controversy and other criticisms to have insoluble logical problems
(the aggregation problem, reswitching, cannot integrate intermediate goods, etc.). And marginal
productivity theory has very meager explanatory power and explains none of the important phenomena
listed above that are explained by Marx's theory.
Milanovic agrees that Marx's LTV is primarily a macro theory, but he interprets it in this post
as only the assumption that "sum of values will be equal to sum of production prices". And
he continues: "The former is an unobservable quantity so Marx's contention is not falsifiable.
It is therefore an extra-scientific statement that we have to take on faith.
I argue, to the contrary, that Marx's macro LTV is primarily a theory of profit and my conclusion
that Marx's theory is the best theory of profit we have is not based on faith but is instead based
on the standard scientific criterion of empirical explanatory power. It is much more accurate
to say that marginal productivity theory is accepted by mainstream economists on faith, as Charles
Ferguson famously said in his conclusion to the capital controversy.
Now to my comments on Milanovic's three main points:
1. Milanovic's main point is that the LTV is often misinterpreted as a simple micro theory
that assumes that the prices of individual commodities are proportional to the labor-times required
to produce them. Milanovic argues that is not true in a capitalist economy because of the equalization
of the profit rate across industries with unequal ratios of capital to labor, so that according to
Marx's theory, long-run equilibrium prices are determined by the equation: w + d + rK, where
w is wages, d is depreciation and r is the economy-wide rate of profit (missing in this equation
is the cost of intermediate goods, but I will ignore this).
Milanovic emphasizes that Walras and Marshall had essentially the same equation for long-run equilibrium
prices. I agree that all three theories of long-run equilibrium prices have this same form,
but there is an important difference. Marx's theory provides a logically rigorous theory of
the rate of profit in this equation (based on his theory of the total profit discussed above) and
Walras and Marshall just take the rate of profit as given , disguised as an "opportunity cost", and
thus provides no theory of profit at all . Therefore, I think Marx's theory of long-run equilibrium
prices is superior to Walras' and Marshall's in this important sense.
2. Milanovic's second main point is that Marx's theory of long-run equilibrium prices are
"clearly very, very far from derisive statements that the labor theory of value means that people
are just paid for their labor input regardless of what is the 'socially necessary labor' required
to produce a good." I presume that this derisive statement means that workers produce more
value than they are paid and thus are exploited in capitalism. But Branko is mistaken about
this. Marx's theory of long-run equilibrium prices is based on his macro theory of profit according
to which the source of profit is the surplus labor of workers. This conclusion is indeed derisive
and that is the main (non-scientific) reason that Marx's theory of profit is rejected by mainstream
economists in spite of its superior explanatory power.
I know from previous correspondence that Milanovic understands well Marx's "exploitation" theory
of profit, but he seems to overlook the connection between Marx's micro theory of prices of production
and his macro theory of profit.
3. Milanovic's third point is that Marx's labor theory of value is most helpful in understanding
pre-capitalist economies and the relation between capitalism and non-capitalist economies today.
I argue, to the contrary, that Marx's labor theory of value and profit is the best theory we have
to understand the most important phenomena of capitalist economies, including 21 st century capitalism.
It would be one thing if mainstream economics had a robust theory of profit with significant explanation
power. But it has almost no theory of profit. Therefore it would seem to be appropriate
from a scientific point of view that Marx's surplus labor theory of profit should be given more serious
consideration.
Thanks again to Milanovic and I look forward to further discussion.
I used to respect Krugman during Bush II presidency. His columns at this time looked like on target
for me. No more.
Now I view him as yet another despicable neoliberal shill. I stopped reading his
columns long ago and kind of always suspect his views as insincere and unscientific.
In this particular
case the key question is about maintaining the standard of living which can be done only if manufacturing
even in robotic variant is onshored and profits from it re-distributed in New Deal fashion. Technology
is just a tool. There can be exception for it but generally attempts to produce everything outside
the US and then sell it in the USA lead to proliferation of McJobs and lower standard of living.
Creating robotic factories in the USA might not completely reverse the damage, but might be a step
in the right direction. The nations can't exist by just flipping hamburgers for each other.
Actually there is a term that explains well behavior of people like Krugman and it has certain
predictive value as for the set of behaviors we observe from them. It is called Lysenkoism and it
is about political control of science.
Yves in her book also touched this theme of political control of science. It might be a good time
to reread it. The key ideas of "ECONned: How Unenlightened Self Interest Undermined Democracy and
Corrupted Capitalism " are still current.
For them neocon/neoliberal propaganda 24/7 is OK, but anti-neoliberalism, anti-neoconservatism information, which sometimes is pro-Russian propaganda is not.
Viva to McCarthyism! The hint is that you do not have a choice -- Big Brother is watching you like
in the USSR. Anti-Russian propaganda money in action. It is interesting that Paul Craig Roberts who
served in Reagan administration is listed as "left-wing"... Tell me who is your ally (
Bellingcat) and I will tell who you are...
As Moon of Alabama noted "I wholeheartedly
recommend to use the list
that new anonymous censorship entity provides as your new or additional "Favorite Bookmarks" list. It
includes illustrious financial anti-fraud sites like Yves Smith's
Naked Capitalism ,
Wikileaks , well informed libertarian sites
like Ron Paul and
AntiWar.com and leftish old timers like
Counterpunch . Of general (non-mainstream)
news sites Consortiumnews , run by Robert
Parry who revealed the Iran-contra crimes, is included as well as
Truthdig and
Truth-out.org ."
Extended list is here
It a real horror to see how deep pro Russian propaganda penetrated the US society ;-) This newly minted
site lists as allies, and with such allies you can reliably tell who finance it
Look like some guys from Soviet Politburo propaganda department make it to the USA :-) The site
definitely smells with
McCarthyism -- the practice
of making accusations of subversion or treason without proper regard for evidence. Which
was the standard way of suppressing dissidents in the USSR. So this is really "Back in the
USSR" type of sites.
But the list definitely has value: the sites listed are mostly anti-establishment, anti status-quo, anti-neocon/neolib sites not so much pro-Russian.
After all Russia is just another neoliberal state, although they deviate from Washington consensus
and do not want to be a puppet of the USA, which is the key requirement for the full acceptable into
the club of "Good neoliberal states". Somehow this list can be called
the list of anti US Imperialism sites or anti--war sites. And this represents the value of the list as people may
not know about their existence.
The new derogatory label for the establishment for information they don't want you to see has become
"fake news." Conspiracy theories do nto work well anymore. That aqures some patina of respectability
with age :-). "Since the election's "surprise" outcome, the corporate media has railed against their
alternative competitors
labeling them as "fake" while their own frequently flawed, misleading, and false stories are touted
as "real" news. World leaders have now begun calling out "fake news" in a desperate attempt to lend
legitimacy to the corporate media, which continues to receive dismal approval ratings from the American
public. Out-going US president Barack Obama
was the first to speak out against the danger of "misinformation," though he failed to mention the
several instances where he himself
lied and spread misinformation to the American public."
The most crazy inclusion is probably Baltimore Gazette. Here how editors define its mission: "Baltimore Gazette is Baltimore's oldest
US news source and one of the longest running
daily newspapers published in the United States. With a focus on local content, the Gazette thrives
to maintain a non-partisan newsroom making their our content the most reliable source available in print and
across the web."
PropOrNot is an independent team of concerned American citizens (an
independent from whom? Concerned about what ? Looks like they are very dependent and so so
much concerned, Playing pro-establishment card is always safe game -- NNB) with a wide range of backgrounds
and expertise, including professional experience in computer science, statistics, public policy,
and national security affairs. We are currently volunteering time and skills to identify propaganda
- particularly Russian propaganda - targeting a U.S. audience. We collect public-record information
connecting propaganda outlets to each other and their coordinators abroad, analyze what we find,
act as a central repository and point of reference for related information, and organize efforts
to oppose it. 2 We formed PropOrNot as an effort to prevent propaganda from distorting U.S. political
and policy discussions (they want it to be distorted in their own
specific pro-neoliberal way --NNB).
We hope to strengthen our cultural immune systems against hostile influence (there is another
name for that -- it is usually called brainwashing --NNB) and improve public
discourse generally. However, our immediate aim at this point is to empower the American voter and
decrease the ability of Russia to influence the ensuing American election.
paulcraigroberts.org --
this is the fierce anti-establishment site which was created by former highly placed
official in Reagan administration Paul Craig Roberts.
ronpaulinstitute.org --
major libertarian anti-war site of former presidential candidate Ron Paul, who in the past was
the only candidate with realistic and anti-neocon foreign policy platorm. Highly recommended.
ZeroHedge is usually deceiving about oil production issues, being on a short side all the time,
and this exaggerating OPEC differences (Which proved to be substantial due to obstuctionalist
KAS and later Iran positions)... So you need to take everything they write with a grain of salt.
Notable quotes:
"... Finally, adding to the complexity, there are two more wildcards: one is Iran oil production and whether Trump will seek to undo the Iranian nuclear deal . Should that happen, and if sanctions are reintroduced, some 1 million barrels in daily oil exports from Iran may go offline, further pressuring the market. ..."
...Reuters countered that according to an OPEC source the group had yet to decide on the
final figures to be discussed on Nov. 28, when OPEC and non-OPEC experts meet in Vienna.
As previously reported, OPEC is expected to discuss production cuts of 4.0-4.5% among
its members at the Vienna meeting to comply with the roughly 1.2mmbpd reduction as set
forth in the Algiers meeting which expects total OPEC output of 32.5-33.0mmbpd, but Iran
and Iraq still have reservations about how much they want to contribute.
A cut of
880,000 bpd would represent less than 2% of current total non-OPEC output.
Shortly after the report came out, Russian energy minister Alexander Novak said
Russia was working with Kazakhstan and Mexico, though not the United States, on joint
output curbs, but reiterated Moscow preferred to freeze output over cuts.
...Novak also said that Russia's position "has remained unchanged and consistent"
(even if the algos may have misinterpreted it), and added that "as our president
said earlier, we are ready to freeze production at the current levels."
President Vladimir Putin on Monday reaffirmed the country is willing to freeze, adding
he sees no obstacles to an OPEC agreement this month after the group made major progress
in overcoming differences.
...Putting even a cut of 880,000 bpd in context, this would represent less than 2
percent of current total non-OPEC output.
... ... ...
* * *
Finally, adding to the complexity, there are two more wildcards: one is Iran oil
production and whether
Trump will seek to undo the Iranian nuclear deal. Should that happen, and if
sanctions are reintroduced, some 1 million barrels in daily oil exports from Iran may go
offline, further pressuring the market. The other is suddenly waning Chinese
demand, on what some analysts have speculated is the result of the Chinese Strategic
Petroleum Reserve approaching full status,
which could eliminate as much as 1.1 million bpd in demand from the market once
China stop filling up its extensive SPR.
"The Trump campaign, meanwhile, delved into message tailoring, sentiment manipulation and
machine learning." - Oh, please, this sounds like a stereotypical Google-centric view of things.
They of course left out the most important part of the campaign, the key to its inception, which
could be described in terms like "The Trump campaign, meanwhile, actually noticed the widespread
misery and non-recovery in the parts of the US outside the elite coastal bubbles and DC beltway,
and spotted a yuuuge political opportunity." In other words, not sentiment manipulation that
was, after all, the Dem-establishment-MSM-wall-street-and-the-elite-technocrats' "America is already
great, and anyone who denies it is deplorable!" strategy of manufactured consent so much as
actual *reading* of sentiment. Of course if one insisted on remaining inside a protective elite
echo chamber and didn't listen to anything Trump or the attendees actually said in those huge
flyover-country rallies that wasn't captured in suitably outrageous evening-news soundbites, it
was all too easy to believe one's own hype.
" former secretary of state Henry Kissinger, who has known Trump socially for decades and
is currently advising the president-elect on foreign policy issues " - I really, really hope this
is just Hammerin' Hank tooting his own horn, as he and his sycophants in the FP establishment
and MSM are wont to do.
"Trump dumps the TPP: conservatives rue strategic fillip to China" (Guardian)
Another wedge angle for Trumps new-found RINO "friends" to play. Trump will have as many problems
with Ayn Ryan Congress as Obama/Clinton on economic issues.
"The TPP excludes China, which declined to join, proposing its own rival version, the Regional
Comprehensive Economic Partnership (RCEP), which excludes the US." You see, it is all China's
fault. No info presented on why China "declined" to join.
And if Abe's Japan were really an independent country, they'd pick up the TPP baton and sell
it to China.
"... Why would Obama normally have been thrilled to "start bringing down the deficit?" A budget deficit by a nation with a sovereign currency such as the U.S. is normal statistically and typically desirable when we have a negative balance of trade. No, it is not a "fact" that stimulus "added another $1 trillion to our national debt." Had we not adopted a stimulus program the debt would have grown even larger as our economy fell even more deeply into the Great Recession. ..."
"... Obama admits that stimulus was desirable. He knows that his economists believed that if the stimulus had been larger and lasted longer it would have substantially speeded the recovery. One of the most important reasons why dramatically increased government fiscal spending (stimulus) is essential in response to a Great Recession for a depression is that the logical and typical consumer response to such a downturn is for "families across the country" to "tighten their belts" by reducing spending. That reduces already inadequate demand, which leads to prolonged downturns. Economists have long recognized that it is essential for the government to do the opposite when consumers "tighten their belts" by greatly increasing spending. To claim that it is "common sense" to "do the same" exacerbate the inadequate demand because it is a "tough decision" makes a mockery of logic and economics. It is a statement of economic illiteracy leading to a set of policy decisions sure to harm the economy and the Democratic Party. In particular, it guaranteed a nightmare for the working class. ..."
"... No, no, no. I can feel the pain of my colleagues that are scholars in modern monetary theory (MMT). The U.S. has a sovereign currency. We can "pay" a trillion dollar debt by issuing a trillion dollars via keystrokes by the Fed. What Obama meant was that he would propose (over time) to increase taxes and reduce federal spending by one trillion dollars. Such an austerity plan would harm the recovery and reduce important government services. Again, the working class were sure to be the primary victims of Obama's self-inflicted austerity. ..."
"... First, the metaphor is economically illiterate and harmful. A government with a sovereign currency is not a "cash-strapped family." It is not, in any meaningful way, "like" a "cash-strapped family." Indeed, the metaphor logically implies the opposite that it is essential that because the government is not like a "cash-strapped family" only it can spend in a counter-cyclical fashion (stimulus) to counter the perverse effect of "cash-strapped famil[ies]" cutting back their spending due to the Great Recession. ..."
"... Let's take this slow. In a recession, consumer demand is grossly inadequate so firms fire workers and unemployment increases. We need to increase effective demand. As a recession hits and workers see their friends fired or reduced to part-time work, a common reaction is for workers to reduce their debts, which requires them to reduce consumption. Consumer consumption is the most important factor driving demand, so this effect, which economists call the paradox of thrift, can deepen the recession. Workers are indeed cash-strapped. Governments with sovereign currencies are, by definition, not cash-strapped. They can and should engage in extremely large stimulus in order to raise effective demand and prevent the recession from deepening. Workers will tend to reduce their spending in a pro-cyclical fashion that makes the recession more severe. Only the government can spend in a counter-cyclical fashion that will make the recession less severe and lengthy. ..."
"... The Democrats have to stop attacking Republicans for running federal budget deficits. I know it's political fun and that the Republicans are hypocritical about budget deficits. Deficits are going to be "massive" when an economy the size of the U.S. suffers a Great Recession. We have had plenty of "massive" deficits during our history under multiple political parties. None of this has ever led to a U.S. crisis. We have had some of our strongest growth while running "massive" deficits. Conversely, whenever we have adopted server austerity we have soon suffered a recession. In 1937, when FDR listened to his inept economists and inflicted austerity, the strong recovery from the Great Depression was destroyed and the economy was thrust back into an intense Great Depression. ..."
"... As to the debt "commission" to solve our "debt crisis," it was inevitable that such a commission would be dominated by Pete Peterson protιgιs and that they would demand austerity and an assault on the federal safety net. That would be a terrible response to the Great Recession and the primary victims of the commission's policies would be the working class. ..."
"... For a nation with a sovereign currency, there is nothing good about the "record surpluses in the 1990s." Such substantial surpluses have occurred roughly nine times in U.S. history and each has been followed shortly by a depression or the Great Recession. This does not prove causality, but it certainly recommends caution. Similarly, "pay-as-you-go" has been the bane of Democratic Party efforts to help the American people. Only a New Democrat like Obama would call for the return of the anti-working class "pay-as-you-go" rules. ..."
"... No. It wouldn't have damaged our markets, increased interest rates or jeopardized our recovery. We had just run an empirical experiment in contrast to the Eurozone. Stimulus greatly enhanced our recovery, while interest rates were at historical lows, and led to surging financial markets. Austerity had done the opposite in the eurozone. ..."
"... Let's try actual common sense instead of metaphors that are economically illiterate. Let's try real economics. Let's stop talking about "mountains of debt" as if they represented a crisis for the U.S. and stop ignoring the tens of millions of working class Americans and Europeans whose lives and families were treated as austerity's collateral damage and were not even worth discussing in Obama's ode to the economic malpractice of austerity. Austerity is the old tired battle that we repeat endlessly to the recurrent cost of the working class. ..."
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor
of economics and law at the University of Missouri-Kansas City. Jointly published at
New Economic Perspectives
I've come back recently from Kilkenny, Ireland where I participated in the seventh annual Kilkenomics
a festival of economics and comedy. The festival is noted for people from a broad range of economic
perspectives presenting their economic views in plain, blunt English. Kilkenomics VII began two days
after the U.S. election, so we added some sessions on President-elect Trump's fiscal policy views.
Trump had no obvious supporters among this diverse group of economists, so the audience was surprised
to hear many economists from multiple nations take the view that his stated fiscal policies could
be desirable for the U.S. and the global economy, particularly the EU. We all expressed the caution
that no one could know whether Trump would seek to implement the fiscal policies on which he campaigned.
Most of us, however, said that if he wished to implement those policies House Speaker Paul Ryan would
not be able to block him. I opined that congressional Republicans would rediscover their love of
pork and logrolling if Trump implemented his promised fiscal policies.
The audience was also surprised to hear two groups of economists explain that Hillary Clinton's
fiscal policies remained pure New Democrat (austerity forever) even as the economic illiteracy of
those policies became even clearer and even as the political idiocy of her fiscal policies became
glaringly obvious. Austerity is one of the fundamental ways in which the system is rigged against
the working class. Austerity was the weapon of mass destruction unleashed in the New Democrats' and
Republicans' long war on the working class. The fact that she intensified and highlighted her intent
to inflict continuous austerity on the working class as the election neared represented an unforced
error of major proportions. As the polling data showed her losing the white working class by staggering
amounts, in the last month of the election, the big new idea that Hillary pushed
repeatedly was a promise that if she were elected she would inflict continuous austerity on the
economy. "I am not going to add a penny to the national debt."
The biggest losers of such continued austerity would as ever be the working class. She also famously
insulted the working class as "deplorables." It was a bizarre approach by a politician to the plight
of tens of millions of Americans who were victims of the New Democrats' and the Republicans' trade
and austerity policies. As we presented these facts to a European audience we realized that in attempting
to answer the question of what Trump's promised fiscal policies would mean if implemented we were
also explaining one of the most important reasons that Hillary Clinton lost the white working class
by such an enormous margin.
Readers of New Economic Perspectives understand why UMKC academics and non-academic supporters
have long shown that austerity is typically a self-destructive policy brought on by a failure to
understand how money works, particularly in a nation like the U.S. with a sovereign currency. We
have long argued that the working class is the primary victim of austerity and that austerity is
a leading cause of catastrophic levels of inequality. Understanding sovereign money is critical also
to understanding why the federal government can and should serve as a job guarantor of last resort.
People, particularly working class men, need jobs, not simply incomes to feel like successful adults.
The federal jobs guarantee program is not simply economically brilliant it is politically brilliant,
it would produce enormous political support from the working class for whatever political party implemented
it.
At Kilkenomics we also used Hillary's devotion to inflicting continuous austerity on the working
class to explain to a European audience how dysfunctional her enablers in the media and her campaign
became. The fact that Paul Krugman was so deeply in her pocket by the time she tripled down on austerity
that he did not call her out on why austerity was terrible economics and terrible policy shows us
the high cost of ceasing to speak truth to power. The fact that no Clinton economic adviser had the
clout and courage to take her aside and get her to abandon her threat to inflict further austerity
on the working class tells us how dysfunctional her campaign team became. I stress again that Tom
Frank has been warning the Democratic Party for over a decade that the policies and the anti-union
and anti-working class attitudes of the New Democrats were causing enormous harm to the working class
and enraging it. But anyone who listened to Tom Frank's warnings was persona non grata in
Hillary's campaign. In my second column in this series I explain that Krugman gave up trying to wean
Hillary Clinton from her embrace of austerity's war on the working class and show that he remains
infected by a failure to understand the nature of sovereign currencies.
What the economists were saying about Trump at Kilkenomics was that there were very few reliable
engines of global growth. China's statistics are a mess and its governing party's real views of the
state of the economy are opaque. Japan just had a good growth uptick, but it has been unable to sustain
strong growth for over two decades. Germany refuses, despite the obvious "win-win" option of spending
heavily on its infrastructure needs to do so. Instead, it persists in running trade and budget surpluses
that beggar its neighbors. England is too small and only Corbyn's branch of Labour and the SNP oppose
austerity. "New Labour" supporters, most of the leadership of the Labour party, like the U.S. "New
Democrats" that served as their ideological model, remain fierce austerity hawks.
That brings us to what would have happened if America's first family of "New Democrats" the
Clintons had won the election. The extent to which the New Democrats embraced the Republican doctrine
of austerity became painfully obvious under President Obama. Robert Rubin dominated economic policy
under President Clinton. The Clinton/Gore administration was absolutely dedicated toward austerity.
The administration was the lucky beneficiary of the two massive modern U.S. bubbles tech stocks
and housing that eventually produced high employment. Indeed, when the tech bubble popped the economy
was saved by the hyper-inflation of the housing bubble. The housing bubble collapsed on the next
administration's watch, allowing the Clintons and Rubinites to spread the false narrative that their
policies produced superb economic results.
When we think of the start of the Obama administration, we think of the stimulus package. In one
sense this is obvious. The only economically literate response to a Great Recession is massive fiscal
stimulus. When Republicans control the government and confront a recession they always respond with
fiscal stimulus in the modern era. Obama's stimulus plan was not massive, but it sounded like a large
number to the public. Two questions arise about the stimulus plan. Why was Obama willing to implement
it given his and Rubin's hostility to stimulus? Conversely, why, given the great success of the stimulus
plan, did Obama abandon stimulus within months?
Rubin and his protιgιs had a near monopoly on filling the role of President Obama's key economic
advisors. Larry Summers is a Rubinite, but he is infamous for his ego and he is a real economist
from an extended family of economists. Summers was certain in his (self-described) role as the President's
principal economic adviser to support a vigorous program of fiscal stimulus because the Obama administration
had inherited the Great Recession. Summers knew that any other policy constituted economics malpractice.
Christina Romer, as Chair of the President's Council of Economic Advisers and Jared Bernstein, Vice
President Biden's chief economist, were both real economists who strongly supported the need for
a powerful program of fiscal stimulus. Each of these economists warned President Obama that his stimulus
package was far too small relative to the massive depths of the Great Recession.
Rubin's training was as a lawyer, not as an economist, so Summers was not about to look to Rubin
for economic advice. In fairness to Rubin, he was rarely so stupid as to reject stimulus as the appropriate
initial response to a recession. He
supported President
Bush's 2001 stimulus package in response to a far milder recession and President Obama's 2009 stimulus
package. Rubin does not deserve much fairness. By early 2010, while Rubin admitted that stimulus
is typically the proper response to a recession and that the 2009 stimulus package was successful,
he opposed adding to the stimulus package in
2010 even though he knew that Obama's 2009 stimulus package was, for political reasons, far smaller
than the administration's economists knew was needed.
Here's ex-Treasury Secretary Robert Rubinone of the chief architects of the global financial
crisisarticulating the position of his proteges at 1600 Pennsylvania Ave.
Robert Rubin: "Putting another major stimulus on top of already huge deficits and rising debt-to-GDP
ratios would have risks. And further expansion of the Federal Reserve Board's balance sheet could
create significant problems . Today's economic conditions would ordinarily be met with expansionary
policy, but our fiscal and monetary conditions are a serious constraint, and waiting too long
to address them could cause a new crisis .
In the spirit of Kilkenomics, we were blunt about the austerity assault that Rubin successfully
argued Obama should resume against America's working class beginning in early 2010. It was inevitable
that it would weaken and delay the recovery. Tens of millions of Americans would leave the labor
force or remain underemployed and even underemployed for a decade. The working class would bear the
great brunt of this loss. In modern America this kind of loss of working class jobs is associated
with mental depression, silent rage, meth, heroin, and the inability of working class males and females
to find a marriage partner, and marital problems. It is a prescription for inflicting agony and
it is a toxic act of politics.
Prior to becoming a de facto surrogate for Hillary and ceasing to speak truth to her
and to America,
Paul Krugman captured the gap between the Obama administration's perspective and that of most
of the public.
According to the independent committee that officially determines such things, the so-called
Great Recession ended in June 2009, around the same time that the acute phase of the financial
crisis ended. Most Americans, however, disagree. In a March 2014 poll, for example, 57 percent
of respondents declared that the nation was still in recession.
The type of elite Democrats that the New Democrats idealized the officers from big finance,
Hollywood, and high tech recovered first and their recovery was a roaring success. Obama, and eventually
Hillary, adopted the mantra that America was already great. Our unemployment rates, relative to the
EU nations forced to inflict austerity on their economies, is much lower. But the Obama/Hillary mantra
was a lie for scores of millions of American workers, including virtually all of the working class
and much of the middle class. As Hillary repeated the mantra they concluded that she was clueless
about and indifferent to their suffering. As we emphasized in Kilkenny, Obama and Hillary were not
simply talking economic nonsense, they were committing political self-mutilation.
Krugman used to make this point forcefully.
[T]he American Recovery and Reinvestment Act, aka the Obama stimulus surely helped end the
economy's free fall. But the stimulus was too small and too short-lived given the depth of the
slump: stimulus spending peaked at 1.6 percent of GDP in early 2010 and dropped rapidly thereafter,
giving way to a regime of destructive fiscal austerity. And the administration's efforts to help
homeowners were so ineffectual as to be risible.
Timothy Geithner, a proponent of austerity, is famous for remarking that he only took only one
economics class and did not understand it. In the same review of Geithner's book by Krugman that
I have been quoting, Krugman gives a concise summary of Geithner's repeated lies about his supposed
support for a larger stimulus. Jacob Lew, the Rubinite who Obama chose as Geithner's successor as
Treasury Secretary, was also trained as a lawyer and is equally fanatic in favoring austerity. In
2009, no one with any credibility in economics within the Obama administration could serve as an
effective spokesperson for austerity as the ideal response to the Great Recession.
But Romer, Summers, and Bernstein experienced the same frustration as 2009 proceeded. The problem
was not simply the Rubinites' fervor for the self-inflicted wound of austerity the fundamental
problem was President Obama. Obama's administration was littered with Rubinites because Obama was
a New Democrat who believed that Rubin's love of austerity and trade deals was an excellent policy.
Of course, he had campaigned on the opposite policy positions, but that was simply political and
Obama promptly abandoned those campaign promises. Fiscal stimulus ceased to be an administration
priority as soon as the stimulus bill was enacted. Romer and Summers recognized the obvious and soon
made clear that they were leaving. Bernstein retained Biden's support, but he was frozen out of influence
on administration fiscal policies by the Rubinites.
By 2010, the fiscal stimulus package had begun to accelerate the U.S. recovery. Romer left the
administration in late summer 2010. Summers left at the end of 2010. Bill Daley (also trained as
a lawyer) became Obama's chief of staff in early 2011. Timothy Geithner, and finally Jacob Lew dominated
Obama administration fiscal policy from late 2010 to the end of the administration in alliance with
Daley and other Rubinite economists. It may be important to point out the obvious Obama chose to
make each of these appointments and there is every reason to believe that he appointed them because
he generally shared their views on austerity. In the first 60 days of his presidency he went before
a Congressional group of New Democrats and told them "
I am a New Democrat ."
Obama began pushing for the fiscal "grand bargain" in 2010. The "grand bargain" would have pushed
towards austerity and begun unraveling the safety net. As such, it was actually the grand betrayal.
Obama's administration began telling the press that Obama viewed achieving such a deal with the Republicans
critical to his "legacy." There were two major ironies involving the grand bargain. Had it been adopted
it would have thrown the U.S. back into recession, made Obama a one-term president, and led to even
more severe losses for the Democratic Party in Congress and at the state level. The other irony was
that it was the Tea Party that saved Obama from Obama's grand betrayal by continually demanding that
Obama agree to inflict more severe assaults on the safety net.
Obama adopted Lew's famous, economically illiterate line and featured it is in his State of the
Union Address as early as January 2010. What follows is a lengthy quotation from that address. I
have put my critiques in italics after several paragraphs. Obama's switch from stimulus to austerity
was Obama's most important policy initiative in his January 2010
State of the Union Address .
The White House
Office of the Press Secretary
For Immediate Release
January 27, 2010
Remarks by the President in State of the Union Address
Now - just stating the facts. Now, if we had taken office in ordinary times, I would have liked
nothing more than to start bringing down the deficit. But we took office amid a crisis. And our
efforts to prevent a second depression have added another $1 trillion to our national debt. That,
too, is a fact.
Why would Obama normally have been thrilled to "start bringing down the deficit?" A budget
deficit by a nation with a sovereign currency such as the U.S. is normal statistically and typically
desirable when we have a negative balance of trade. No, it is not a "fact" that stimulus "added another
$1 trillion to our national debt." Had we not adopted a stimulus program the debt would have grown
even larger as our economy fell even more deeply into the Great Recession.
I'm absolutely convinced that was the right thing to do. But families across the country are
tightening their belts and making tough decisions. The federal government should do the same.
(Applause.) So tonight, I'm proposing specific steps to pay for the trillion dollars that it took
to rescue the economy last year.
Obama admits that stimulus was desirable. He knows that his economists believed that if the
stimulus had been larger and lasted longer it would have substantially speeded the recovery. One
of the most important reasons why dramatically increased government fiscal spending (stimulus) is
essential in response to a Great Recession for a depression is that the logical and typical consumer
response to such a downturn is for "families across the country" to "tighten their belts" by reducing
spending. That reduces already inadequate demand, which leads to prolonged downturns. Economists
have long recognized that it is essential for the government to do the opposite when consumers "tighten
their belts" by greatly increasing spending. To claim that it is "common sense" to "do the same"
exacerbate the inadequate demand because it is a "tough decision" makes a mockery of logic and
economics. It is a statement of economic illiteracy leading to a set of policy decisions sure to
harm the economy and the Democratic Party. In particular, it guaranteed a nightmare for the working
class.
No, no, no. I can feel the pain of my colleagues that are scholars in modern monetary theory
(MMT). The U.S. has a sovereign currency. We can "pay" a trillion dollar debt by issuing a trillion
dollars via keystrokes by the Fed. What Obama meant was that he would propose (over time) to increase
taxes and reduce federal spending by one trillion dollars. Such an austerity plan would harm the
recovery and reduce important government services. Again, the working class were sure to be the primary
victims of Obama's self-inflicted austerity.
Starting in 2011, we are prepared to freeze government spending for three years. (Applause.)
Spending related to our national security, Medicare, Medicaid, and Social Security will not be
affected. But all other discretionary government programs will. Like any cash-strapped family,
we will work within a budget to invest in what we need and sacrifice what we don't. And if I have
to enforce this discipline by veto, I will. (Applause.)
First, the metaphor is economically illiterate and harmful. A government with a sovereign
currency is not a "cash-strapped family." It is not, in any meaningful way, "like" a "cash-strapped
family." Indeed, the metaphor logically implies the opposite that it is essential that because
the government is not like a "cash-strapped family" only it can spend in a counter-cyclical fashion
(stimulus) to counter the perverse effect of "cash-strapped famil[ies]" cutting back their spending
due to the Great Recession.
Let's take this slow. In a recession, consumer demand is grossly inadequate so firms fire
workers and unemployment increases. We need to increase effective demand. As a recession hits and
workers see their friends fired or reduced to part-time work, a common reaction is for workers to
reduce their debts, which requires them to reduce consumption. Consumer consumption is the most important
factor driving demand, so this effect, which economists call the paradox of thrift, can deepen the
recession. Workers are indeed cash-strapped. Governments with sovereign currencies are, by definition,
not cash-strapped. They can and should engage in extremely large stimulus in order to raise effective
demand and prevent the recession from deepening. Workers will tend to reduce their spending in a
pro-cyclical fashion that makes the recession more severe. Only the government can spend in a counter-cyclical
fashion that will make the recession less severe and lengthy.
We will continue to go through the budget, line by line, page by page, to eliminate programs
that we can't afford and don't work. We've already identified $20 billion in savings for next
year. To help working families, we'll extend our middle-class tax cuts. But at a time of record
deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for
those making over $250,000 a year. We just can't afford it. (Applause.)
Now, even after paying for what we spent on my watch, we'll still face the massive deficit
we had when I took office. More importantly, the cost of Medicare, Medicaid, and Social Security
will continue to skyrocket. That's why I've called for a bipartisan fiscal commission, modeled
on a proposal by Republican Judd Gregg and Democrat Kent Conrad. (Applause.) This can't be one
of those Washington gimmicks that lets us pretend we solved a problem. The commission will have
to provide a specific set of solutions by a certain deadline.
The Democrats have to stop attacking Republicans for running federal budget deficits. I know
it's political fun and that the Republicans are hypocritical about budget deficits. Deficits are
going to be "massive" when an economy the size of the U.S. suffers a Great Recession. We have had
plenty of "massive" deficits during our history under multiple political parties. None of this has
ever led to a U.S. crisis. We have had some of our strongest growth while running "massive" deficits.
Conversely, whenever we have adopted server austerity we have soon suffered a recession. In 1937,
when FDR listened to his inept economists and inflicted austerity, the strong recovery from the Great
Depression was destroyed and the economy was thrust back into an intense Great Depression.
As to the debt "commission" to solve our "debt crisis," it was inevitable that such a commission
would be dominated by Pete Peterson protιgιs and that they would demand austerity and an assault
on the federal safety net. That would be a terrible response to the Great Recession and the primary
victims of the commission's policies would be the working class.
Now, yesterday, the Senate blocked a bill that would have created this commission. So I'll
issue an executive order that will allow us to go forward, because I refuse to pass this problem
on to another generation of Americans. (Applause.) And when the vote comes tomorrow, the Senate
should restore the pay-as-you-go law that was a big reason for why we had record surpluses in
the 1990s. (Applause.)
For a nation with a sovereign currency, there is nothing good about the "record surpluses
in the 1990s." Such substantial surpluses have occurred roughly nine times in U.S. history and each
has been followed shortly by a depression or the Great Recession. This does not prove causality,
but it certainly recommends caution. Similarly, "pay-as-you-go" has been the bane of Democratic Party
efforts to help the American people. Only a New Democrat like Obama would call for the return of
the anti-working class "pay-as-you-go" rules.
Now, I know that some in my own party will argue that we can't address the deficit or freeze
government spending when so many are still hurting. And I agree - which is why this freeze won't
take effect until next year - (laughter) - when the economy is stronger. That's how budgeting
works. (Laughter and applause.) But understand - understand if we don't take meaningful steps
to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize
our recovery - all of which would have an even worse effect on our job growth and family incomes.
No. It wouldn't have damaged our markets, increased interest rates or jeopardized our recovery.
We had just run an empirical experiment in contrast to the Eurozone. Stimulus greatly enhanced our
recovery, while interest rates were at historical lows, and led to surging financial markets. Austerity
had done the opposite in the eurozone.
From some on the right, I expect we'll hear a different argument - that if we just make fewer
investments in our people, extend tax cuts including those for the wealthier Americans, eliminate
more regulations, maintain the status quo on health care, our deficits will go away. The problem
is that's what we did for eight years. (Applause.) That's what helped us into this crisis. It's
what helped lead to these deficits. We can't do it again.
Rather than fight the same tired battles that have dominated Washington for decades, it's time
to try something new. Let's invest in our people without leaving them a mountain of debt. Let's
meet our responsibility to the citizens who sent us here. Let's try common sense. (Laughter.)
A novel concept.
Let's try actual common sense instead of metaphors that are economically illiterate. Let's
try real economics. Let's stop talking about "mountains of debt" as if they represented a crisis
for the U.S. and stop ignoring the tens of millions of working class Americans and Europeans whose
lives and families were treated as austerity's collateral damage and were not even worth discussing
in Obama's ode to the economic malpractice of austerity. Austerity is the old tired battle that we
repeat endlessly to the recurrent cost of the working class.
Trump is Not Locked into Austerity
I note the same caution we gave in Ireland we don't know whether President Trump will seek to
implement his economic proposals. Trump has proposed trillions of dollars in increased spending on
infrastructure and defense and large cuts in corporate taxation. In combination, this would produce
considerable fiscal stimulus for several years. The point we made in Ireland is that if he seeks
to implement his proposals (a) we believe he would succeed politically in enacting them and (b) they
would produce stimulus that would have a positive effect on the near and mid-term economy of the
U.S. Further, because the eurozone is locked into a political trap in which there seems no realistic
path to abandoning the self-inflicted wound of continuous austerity, Trump represents the eurozone's
most realistic hope for stimulus.
Final Cautions
Each of the economists speaking on these subjects in Kilkenny opposed Trumps election and believe
it will harm the public. Fiscal stimulus is critical, but it is only one element of macroeconomics
and no one was comfortable with Trump's long-term control of the economy. I opined, for example,
that Trump will create an exceptionally criminogenic environment that will produce epidemics of control
fraud. The challenge for progressive Democrats and independents is to break with the New Democrats'
dogmas. Neither America nor the Democratic Party can continue to bear the terrible cost of this unforced
error of economics, politics, and basic humanity. I fear that the professional Democrats assigned
the task of re-winning the support of the white working class do not even have ending the New Democrats'
addiction to austerity on their radar. They are probably still forbidden to read Tom Frank.
Seems to me that Ryan is not Trump's principal impediment, that Trump knows this, and that
the battle lines are already in the process of being drawn. Veiled threat?.. or, "Let's make a
deal"?
"In addition, with the debt-to-GDP ratio at around 77 percent there is not a lot of fiscal
space should a shock to the economy occur, an adverse shock that did require fiscal stimulus,"
she said.
Sovereign currency defense appears to be the primary job for the US both domestically and internationally.
There is a house of cards tenuous aspect to the US policies, with looming questions about
the ongoing stability of the domestic economy and society. Threats to that sovereign position
would seem to be present over the long term from China in particular. To what extent does currency
defense justify any manner of harmful policies, certainly given the perceived ends justify
the means tacit assumptions?
"... CNN is Paul's biggest alleged culprit, with nine entries, followed by the NY Times and MSNBC, with six each. The NY Times has recently come under fire from President-elect Donald Trump, who accuses them of being "totally wrong" on news regarding his transition team, while describing them as "failing." ..."
"... CNN's Wolf Blitzer is also amongst those named on the list. In an email from the Democratic National Committee (DNC) released by WikiLeaks, the DNC staff discusses sending questions to CNN for an interview with Donald Trump. ..."
"... So-called 'fake news' has been recently attacked by US President Barack Obama, who claimed that false news shared online may have played a role in Donald Trump's victory in the US presidential election. ..."
"This list contains the culprits who told us that Iraq had weapons of mass destruction and
lied us into multiple bogus wars,"according to a report on his website, Ron Paul Liberty Report.
Paul claims the list is sourced and "holds a lot more water" than a list previously released by
Melissa Zimdars, who is described on Paul's website as "a leftist feminist professor."
"These are the news sources that told us 'if you like your doctor, you can keep your doctor,'"
he said. "They told us that Hillary Clinton had a 98% of winning the election. They tell us in
a never-ending loop that 'The economy is in great shape!'"
Paul's list includes the full names of the "fake news" journalists as well as the publications
they write for, with what appears to be hyperlinks to where the allegations are sourced from.
In most cases, this is WikiLeaks, but none of the hyperlinks are working at present, leaving the
exact sources of the list unknown.
CNN is Paul's biggest alleged culprit, with nine entries, followed by the NY Times and MSNBC,
with six each. The NY Times has recently come under fire from President-elect Donald Trump, who
accuses them of being "totally wrong" on news regarding his transition team, while describing
them as "failing."
The publication hit back, however, saying their business has increased since his election,
with a surge in new subscriptions.
CNN's Wolf Blitzer is also amongst those named on the list. In an email from the Democratic
National Committee (DNC) released by WikiLeaks, the DNC staff discusses sending questions to CNN
for an interview with Donald Trump.
Also listed is NY Times journalist Maggie Haberman, whom leaked emails showed working closely
with Clinton's campaign to present the Democratic candidate in a favorable light.
So-called 'fake news' has been recently attacked by US President Barack Obama, who claimed
that false news shared online may have played a role in Donald Trump's victory in the US presidential
election.
Facebook head Mark Zuckerberg has now said that the social media site may begin entrusting
third parties with filtering the news.
"... For more than three decades, macroeconomics has gone backwards," the paper began. Romer closed out his argument, some 20 pages later, by accusing a cohort of economists of drifting away from science, more interested in preserving reputations than testing their theories against reality, "more committed to friends than facts." In between, he offers a wicked parody of a modern macro argument: "Assume A, assume B, blah blah blah and so we have proven that P is true ..."
"... The idea that consumers and businesses always make rational choices pervades mainstream economics. Romer thinks that's not only wrong, but may lead to the misleading conclusion that government action can't fix big problems. ..."
"... There is no better place to be writing this than from (nearly) Minneapolis, for the University of Minnesota's economics department is the most devoted coven worshipping the most extreme form of "rational expectations." The most famous cultists have now relocated, but the U. Minnesota economics department remains fanatical in its devotion to rational expectations theory. ..."
"... All of this means that Romer's denunciations were sure to hit home far harder with mainstream and theoclassical economists than anything a heterodox economist could write. ..."
"... What this paragraph reveals is the classic tactic of theoclassical economists they simply ignore real criticism. Lucas, Prescott, and Sargent all care desperately about Romer's criticism but they all refuse to engage substantively with his critique. One has to love the arrogance of Sargent in "responding" without reading to Romer's critique. Sargent cannot, of course, respond to a critique he has never read so he instead makes a crude attempt to insult Romer, asserting that Romer has not done any scientific work in three decades. ..."
"... The rational expectations purists have been unable to come up with a response to their predictive failures and their false model of human behavior for thirty years. The Bloomberg article does not understand a subtle point about their non-defense defense, as shown in these key passages. ..."
"... What the rational expectations devotees are actually saying is their standard line, which is a radical departure from the scientific method. Their mantra is "it takes a model to beat a model." That mantra violates the scientific method. Their models are designed to embody their rational expectations theory. Those models' predictive ability is pathetic, which means that their theory and models are both falsified and should be rejected. The academic proponents of modern macro models, however, assert that their models are incapable of falsification by testing and predictive failure. This is not science, but theology. ..."
"... V.V. Chari's criticism of Romer is revealing. He complains that Romer does not want to "build on [rational expectation theory's] foundations." Why would Romer want to commit such a pointless act? Romer's point is that rational expectations is a failed theory that needs to be rejected so macroeconomics can move on to useful endeavors. ..."
"... Rational expectations theory has no such empirical foundations. ..."
"... Further, the dynamic stochastic general equilibrium (DSGE) models routinely fail the predictive test and, as Romer details, fail despite the use of dozens of ways in which the models are "gamed" with arbitrary inputs and restrictions that have no theoretical or empirical basis. Chari is right to describe the modern macro model as an "edifice." I would add that it is a baroque edifice top heavy with ornamental features designed to hide its lack of a foundation. Modern macro collapsed as soon as its devotees tried to build without an empirical foundation. ..."
"... The rational expectation devotees respond that predictive failures no matter how extreme or frequent cannot falsify their models or their theories. The proponents claim that only a better model, with superior predictive ability can beat their model. ..."
"... Kocherlakota's summary description is appropriately terse. He later explains the dogmatic gloss that devotees place on each of these five points. The "budget constraint," for example, means that nations with sovereign currencies such as the U.S. cannot run deficits, even to fight severe recessions or depressions. Why? Because theoclassical economists are enormous believers in austerity. As Kocherlakota archly phrased the matter, "freshwater" DSGE models were so attractive to theoclassical macro types because their model perfectly tracked their ideology. ..."
"... Specifying household preferences and firm objectives is equally erroneous, as Akerlof and Romer's 1993 article on "Looting" demonstrated. "Firms" do not have "objectives." Employees have "objectives," and the controlling officers' "objectives" are the most powerful drivers of employee behavior. ..."
"... Kocherlakota unintentionally highlighted modern macros' inability to incorporate even massive frauds driving national scandals and banking crises, despite the efforts of Akerlof (1970) (a market for "lemons") and Akerlof and Romer 1993: ("looting") in this passage. ..."
"... If macroeconomics, outside the cult of modern macro, were a car, it would not be "broken." It would be episodically broken when the rational expectations devotees got hold of monetary or fiscal policy. The rational expectations model fails the most fundamental test of a financial model people trying to make money by anticipating the macroeconomics consequences of changes in monetary and fiscal policy overwhelmingly do not use their models because they are known to have pathetic predictive ability. The alternative models that embrace Keynesian analysis and are not dependent on the fiction of rational expectations function pretty well. The real world macro car, when driven by real world drivers, works OK. Essentially, the rational expectations devotees say that we can never drive the macro "car" because the public will defeat any effort to drive the economy in any direction. Instead, the economy will lurch about n response to random technological "shocks" that cannot be predicted because they occur without any relationship to any public policy choices. ..."
"... I am completely confused about the prediction of "rational choices". Do they include going bankrupt on purpose and letting your investors take the hit, burning your building down for the insurance money, hostile takeover behavior where businesses are run into the ground on purpose, tax strategies, people going on unemployment when they want a vacation from work, and on and on? These are decisions that have a rationale for the people who make them, and they have not been uncommon. Perhaps "economists" are best off observing not predicting "human behavior". ..."
"... I majored in economics. as you go up higher up into the dismal science, the more deranged it gets. The reason they are vague is because they don't know what they are talking about. They don't consider the real world, and as Bill Black's so brilliantly points out, they are in no hurry to out themselves as frauds. ..."
"... thanks, Simon. there must be something in those mental masturbation models for some people. justification for something the 99 % are all paying for most likely ..."
"... In some natural sciences, abandoning equilibrium models and replacing them with dynamic models have led to great progress, and looking at the actual time evolution of economies, there is a great deal of dynamics, such as growth, recessions, demography, natural catastrophes, immigration/emigration, resource discovery and depletion, technological progress. ..."
"... Since our economy has been gradually going casino for so many years, it makes sense that the folks who hold the reigns would make every effort to assure that all their key players adhere to their singular perspectives. ..."
"... The Nobel Memorial Prize in economics promotes the illusion that economics is a science. It is better conceptualized as a literary genre, and economists should be forced to compete with other writers for the prize in literature. ..."
"... Bill Black has a fascinating opinion on unnecessary complexity and I agree with him 200 percent. ..."
"... interesting about Kocherlakota formerly being a rational expectations devotee just the phrase 'rational expectations' is mind boggling as if there were no reaction to any action anywhere. Jack Bogle was on the news this morning laughing about stock picking and saying that every stock picker that makes money is balanced out by another one who loses money and so the only thing that makes money net-net is the long term progress of the market, (or society I would say and that requires planning). ..."
"... Not one mention of Chaos or Catastrophe Theory, which are theories of systems with non linear feedback (aka: Fear and Greed), which appear to me to be fundamental aspects of Economics, especially the humans who are the Economy. ..."
"... Two slogans I read somewhere recently seem appropriate for theoclassical economics: Ideology is easy, thinking is hard. Belief is belonging. ..."
"... One doesn't have to have read any Reformation theology, but only to have observed more or less casually that human being are scarcely rational even about their own self-interest, and then only self-deceptively. Thomas Frank has commented effectively on that point in the political arena in What's the Matter with Kansas. To wit: Republicans have, he points out, diverted voters attention to social/cultural issues while picking their pockets. Perhaps one might sense an intersection of politics and economics on the latter point. ..."
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor
of economics and law at the University of Missouri-Kansas City. Jointly published at
New Economic Perspectives
Bloomberg has written an article about the origins of Paul Romer's increasingly famous
critique of modern macroeconomics.
His intention actually had been to write a paper that would celebrate advances in the understanding
of what drives economic growth. But when he sat down to write it in the months before taking over
as the World Bank's chief economist, Romer quickly found his heart wasn't in it. The world economy
wasn't growing much anyway; and the math that many colleagues were using to model it seemed unrealistic.
He watched a documentary about the Church of Scientology, and was struck by how groupthink can
operate.
So, Romer said in an interview at the Bank's Washington headquarters, "I just thought, OK,
I'm going to say what I think. I don't know if I'm the right person, but no one else is going
to say it. So I said it."
The upshot was "The Trouble With Macroeconomics," a scathing critique that landed among Romer's
peers like a grenade.
A bit of background makes the first paragraph more understandable. Romer's specialty is developmental
economics.
There are many economists who have said for years that modern macroeconomics is an abject failure.
But all economists are not equal, and Romer is both an extremely distinguished economist and the
World Bank's chief economist. When he writes that macroeconomics is absurd his position gets vastly
more attention from the field.
The Bloomberg article humorously summarizes Romer's article.
"For more than three decades, macroeconomics has gone backwards," the paper began. Romer
closed out his argument, some 20 pages later, by accusing a cohort of economists of drifting away
from science, more interested in preserving reputations than testing their theories against reality,
"more committed to friends than facts." In between, he offers a wicked parody of a modern macro
argument: "Assume A, assume B, blah blah blah and so we have proven that P is true."
The idea that consumers and businesses always make rational choices pervades mainstream
economics. Romer thinks that's not only wrong, but may lead to the misleading conclusion that
government action can't fix big problems.
There is no better place to be writing this than from (nearly) Minneapolis, for the University
of Minnesota's economics department is the most devoted coven worshipping the most extreme form of
"rational expectations." The most famous cultists have now relocated, but the U. Minnesota economics
department remains fanatical in its devotion to rational expectations theory.
A belief that consumers and businesses always make rational choices does not "pervade mainstream
economics." Mainstream economics is increasingly influenced by reality, particularly in the form
of behavioral economics. Behavioral economics, which has led to multiple Nobel awards, has many currents,
but each of them agrees that consumers and business people typically do not make rational decisions
even in simpler tasks, much less demonstrate the ability to predict the future required by rational
expectations theory. Similarly, even the proponents of modern macroeconomics admit that its predictive
ability and predictive ability is supposed to be their holy grail of legitimacy is beyond pathetic.
What is true is that mainstream economics' most egregious errors have come from assuming contrary
to reality in a wide range of contexts that corporate officers, consumers, and investors make optimal
decisions that maximize the firm or the household's utility.
In any real scientific field modern macro would, decades ago, have been abandoned as an abject
failure. Romer, therefore, is not storming some impregnable bulwark of economics. He is calling an
obvious, abject failure an obvious, abject failure. Private sector finance participants typically
believe the academic proponents of rational expectations theory are delusional. Romer is calling
out elites in his profession who have ignored these failures and doubled and tripled-down on their
failed dogmas for decades. This makes the Bloomberg article's title deeply misleading: "The
Rebel Economist Who Blew Up Macroeconomics."
Romer is not a rebel. He did not blow up academic, mainstream macroeconomics the academic proponents
of modern macroeconomics blew it up decades ago. Romer is mainstream, and he is sympathetic on personal
and ideological grounds to the theoclasscial economist most famous for developing rational expectations
theory. Romer has strongly libertarian views and did his doctoral work under Robert Lucas. Romer
has long been appreciative of Lucas. All of this means that Romer's denunciations were sure to
hit home far harder with mainstream and theoclassical economists than anything a heterodox economist
could write.
The same Bloomberg article made a key factual claim that is literally true but misleading.
What's at stake far exceeds hurt feelings in the ivory tower. Central banks and other policy
makers use the models that Romer says are flawed.
Central banks and private economic forecasters rarely use modern macro models, though they have
begun to use New Keynesian models that are hybrids. They do not do use "freshwater" models because
they are known to have terrible predictive ability and because alternative models not based on rational
expectations have far superior predictive ability. The private financial sector typically does not
rely on modern macro models, even the New Keynesian hybrids. Romer is not saying that the models
are "flawed" he is explaining that they are inherently failed models. Worse, he is saying that
the designers of the models know they are failed and respond by gimmicking the models by littering
them with myriad assumptions that have no empirical or theoretical basis and are designed to try
to make the models produce less absurd results.
I explained that Romer was far from the first to call out modern academic macroeconomics as a
failure but that he is a prominent mainstream economist. The Bloomberg article's most interesting
reveal was the response by the troika of economists must associated with rational expectations theory
to Romer's article decrying their dogmas.
Lucas and Prescott didn't respond to requests for comments on Romer's paper. Sargent did. He
said he hadn't read it, but suggested that Romer may be out of touch with the ways that rational-expectations
economists have adapted their models to reflect how people and firms actually behave. Sargent
said in an e-mail that Romer himself drew heavily on the school's insights, back when he was "still
doing scientific work in economics 25 or 30 years ago."
What this paragraph reveals is the classic tactic of theoclassical economists they simply
ignore real criticism. Lucas, Prescott, and Sargent all care desperately about Romer's criticism
but they all refuse to engage substantively with his critique. One has to love the arrogance of
Sargent in "responding" without reading to Romer's critique. Sargent cannot, of course, respond
to a critique he has never read so he instead makes a crude attempt to insult Romer, asserting that
Romer has not done any scientific work in three decades.
The rational expectations purists have been unable to come up with a response to their predictive
failures and their false model of human behavior for thirty years. The Bloomberg article does
not understand a subtle point about their non-defense defense, as shown in these key passages.
Allies of the three Nobelists have been more outspoken, and many of them point out that Romer
- unlike Keynes in the 1930s - doesn't offer a new framework to replace the one he says has failed.
"Burning down the edifice, and saying we'll figure out what we'll build on its foundations
later, just does not seem like a constructive way to proceed," said V. V. Chari, an economics
professor at the University of Minnesota.
Romer's heard that line often, and bristles at it: "I'm saying, 'the car is broken.' And everyone's
saying, 'Romer's a terrible guy, because he couldn't fix the car'."
What the rational expectations devotees are actually saying is their standard line, which
is a radical departure from the scientific method. Their mantra is "it takes a model to beat a model."
That mantra violates the scientific method. Their models are designed to embody their rational expectations
theory. Those models' predictive ability is pathetic, which means that their theory and models are
both falsified and should be rejected. The academic proponents of modern macro models, however, assert
that their models are incapable of falsification by testing and predictive failure. This is not science,
but theology.
V.V. Chari's criticism of Romer is revealing. He complains that Romer does not want to "build
on [rational expectation theory's] foundations." Why would Romer want to commit such a pointless
act? Romer's point is that rational expectations is a failed theory that needs to be rejected so
macroeconomics can move on to useful endeavors.
A "foundation" in such a building metaphor is the deep, well-grounded stone or reinforced concrete
beneath the visible building that is attached to solid bedrock. Rational expectations theory
has no such empirical foundations. It was not based on testing that found that people behaved
in accordance with the theory. Behavioral economics and finance, by contrast, is based on a growing
empirical base virtually all of which refutes the first three assumptions of the models. Similarly,
the work of Akerlof (1970), Akerlof & Romer (1993), and the work of white-collar criminologists has
falsified each of the first three assumptions of the models.
Further, the dynamic stochastic general equilibrium (DSGE) models routinely fail the predictive
test and, as Romer details, fail despite the use of dozens of ways in which the models are "gamed"
with arbitrary inputs and restrictions that have no theoretical or empirical basis. Chari is right
to describe the modern macro model as an "edifice." I would add that it is a baroque edifice top
heavy with ornamental features designed to hide its lack of a foundation. Modern macro collapsed
as soon as its devotees tried to build without an empirical foundation.
The rational expectation devotees respond that predictive failures no matter how extreme
or frequent cannot falsify their models or their theories. The proponents claim that only a better
model, with superior predictive ability can beat their model. That might sound acceptable to
some, but there is a critical unstated twist. The many rival models actually used by the private
sector and central banks that produce far superior predictive ability can never be treated as "better
models" to these devotees because the models with far superior predictive powers reject rational
expectations theory, rational decision-making, and the "budget constraint." To the devotees, only
DSGE models that accept this trio of market fictions are eligible to be acceptable "models." Dr.
Kocherlakota states that acceptable models "share five key features." These five characteristics
define DSGE models.
They specify budget constraints for households, technologies for firms, and resource constraints
for the overall economy. They specify household preferences and firm objectives. They assume forward-looking
behavior for firms and households. They include the shocks that firms and households face. They are
models of the entire macroeconomy.
Kocherlakota's summary description is appropriately terse. He later explains the dogmatic
gloss that devotees place on each of these five points. The "budget constraint," for example, means
that nations with sovereign currencies such as the U.S. cannot run deficits, even to fight severe
recessions or depressions. Why? Because theoclassical economists are enormous believers in austerity.
As Kocherlakota archly phrased the matter, "freshwater" DSGE models were so attractive to theoclassical
macro types because their model perfectly tracked their ideology.
[A]lmost coincidentally-in these models, all government interventions (including all forms
of stabilization policy) are undesirable.
Yes, "almost coincidentally."
Specifying household preferences and firm objectives is equally erroneous, as Akerlof and
Romer's 1993 article on "Looting" demonstrated. "Firms" do not have "objectives." Employees have
"objectives," and the controlling officers' "objectives" are the most powerful drivers of employee
behavior.
As Akerlof and Romer (and every modern crisis) demonstrated, this frequently leads to firm practices
that harm the firm, the consumer, and the shareholders. Such behavior, however, is impossible under
the second assumption, so any model (such as control fraud or "looting") that violates the assumption
is not eligible to be a rival model because it these superior models do not produce "general equilibrium."
The "GE" in a "DSGE" model is general equilibrium, so rival models from economics and criminology
that note that the economy is not a self-correcting apparatus that produces general equilibrium are
ruled out as superior models even though they are superior in that they have an empirical and theoretical
basis and demonstrate far superior predictive results.
Kocherlakota unintentionally highlighted modern macros' inability to incorporate even massive
frauds driving national scandals and banking crises, despite the efforts of Akerlof (1970) (a market
for "lemons") and Akerlof and Romer 1993: ("looting") in this passage.
In the macro models of the 1980s, all mutually beneficial trades occur without delay. This
assumption of frictionless exchange made solving these models easy. However, it also made
the models less compelling.
He then goes on to a delighted description of macro economists now sometimes building in (arbitrary)
lags ("frictions") in the time required to accomplish "all mutually beneficial trades." But what
of the three great fraud epidemics that produced the U.S. financial crisis and the Great Recession?
Sorry, that's not allowed into the "friction" canon. The market model is still one of perfection
(albeit slightly delayed). It does not matter how many massive financial scandals occur in which
the largest UK banks and Wells Fargo deliberately abuse their customers by encouraging them to engage
in transactions that will harm them and make the bankers rich. It doesn't not matter that over ten
million Americans were induced by bankers and their agents to pay excessive interest rates in return
for yield spread premiums (YSP) to the bankers and brokers. None of these things are allowed to happen
in these models. Your better model, which includes such frauds and abuses, is not allowed precisely
because it (a) is better and (b) falsifies the theoclassical ideology underlying "rational expectations"
theory.
The assumption of "forward looking behavior" produces "expectations," which are assumed to be
accurate and rational. Theoclassical proponents claim that we all have the ability to predict vast
aspects of the financial future. While we are not perfect, we are optimal in our forecasts given
the state of knowledge. If your rival model lacks rational expectations, it isn't a real model. Romer
rejects the rational expectations myth, so he is incapable of presenting a superior model to the
devotees of rational expectations.
If macroeconomics, outside the cult of modern macro, were a car, it would not be "broken."
It would be episodically broken when the rational expectations devotees got hold of monetary or fiscal
policy. The rational expectations model fails the most fundamental test of a financial model people
trying to make money by anticipating the macroeconomics consequences of changes in monetary and fiscal
policy overwhelmingly do not use their models because they are known to have pathetic predictive
ability. The alternative models that embrace Keynesian analysis and are not dependent on the fiction
of rational expectations function pretty well. The real world macro car, when driven by real world
drivers, works OK. Essentially, the rational expectations devotees say that we can never drive the
macro "car" because the public will defeat any effort to drive the economy in any direction. Instead,
the economy will lurch about n response to random technological "shocks" that cannot be predicted
because they occur without any relationship to any public policy choices.
Romer takes particular delight in shredding the pretension to "science" in the model's abuse of
shocks. Again, however, the Bloomberg article seriously misleads in making it appear that
his critique of shocks is novel. Then Minneapolis Fed Chair Dr.
Kocherlakota (formerly chair of the U. Minnesota economics department, where he was a "rational
expectations" devotee) forcefully owned up to the egregious predictive failures of the models. He
acknowledged that "macro models are driven by patently unrealistic shocks."
It is unfortunate that Bloomberg article about Romer's article is weak. It is useful, however,
because its journalistic inquiry allows us to know how deep in their bunker Sargent, Lucas, and Prescott
remain. They still refuse to engage substantively with Romer's critique of not only their failures
but their intellectual dishonesty and cowardice. It is astonishing that multiple economists were
awarded Nobel prizes for creating the increasingly baroque failure of modern macro. In any other
field it would be a scandal that would shake the discipline to the core and cause it to reexamine
how it conducted research and trained faculty. In economics, however, a huge proportion of Nobel
awards have gone to theoclassical economists whose predictions have been routinely falsified and
whose policy recommendations have proven disastrous. Theoclassical economists, with only a handful
of exceptions, express no concern about these failures.
I am completely confused about the prediction of "rational choices". Do they include going
bankrupt on purpose and letting your investors take the hit, burning your building down for the
insurance money, hostile takeover behavior where businesses are run into the ground on purpose,
tax strategies, people going on unemployment when they want a vacation from work, and on and on?
These are decisions that have a rationale for the people who make them, and they have not been
uncommon. Perhaps "economists" are best off observing not predicting "human behavior".
I was fortunate enough to have an econ. prof. (mid 70's) who was also my student counselor
tell me that unless I intended to work for the gov't or teach the subject, a degree in econ. was
pointless. What's taught in class has very little to do with the real world.
Anyone who contends that econ is a "science" rather than philosophy is deluded or just trying
to protect their place in the hierarchy. Seems that "physics envy" is never going away.
I'll see your DSGE model & raise with with the IBGYBG* model; in theory, you should win that
hand but I'll be walking away with the actual money.
*(by the time this blows up) I'll Be Gone & You'll Be Gone
I majored in economics. as you go up higher up into the dismal science, the more deranged
it gets. The reason they are vague is because they don't know what they are talking about. They
don't consider the real world, and as Bill Black's so brilliantly points out, they are in no hurry
to out themselves as frauds.
thanks, Simon. there must be something in those mental masturbation models for some people.
justification for something the 99 % are all paying for most likely
I am not sure which is the greatest shortcoming of the macro-economy theory described by Black:
rational expectations or global equilibrium?
In some natural sciences, abandoning equilibrium models and replacing them with dynamic
models have led to great progress, and looking at the actual time evolution of economies, there
is a great deal of dynamics, such as growth, recessions, demography, natural catastrophes, immigration/emigration,
resource discovery and depletion, technological progress.
I sometimes like to use the analogy of the famous failure of the Tacoma Narrows bridge failure.
The engineers calculated the maximum force that the wind would have on the bridge, but didn't
calculate the dynamic aerodynamic effect as the bridge deck swayed in the wind. The result was
a spectacular failure.
Since our economy has been gradually going casino for so many years, it makes sense that
the folks who hold the reigns would make every effort to assure that all their key players adhere
to their singular perspectives.
The most important of these perspectives is that there is no higher human purpose than to make
a lot of money, in essence, that greed is good.
Thus the problem facing economists worshiping at the altar of "rational expectations" is that
the only rational expectation that is accepted as 'truly rational', is first and foremost, the
love of money.
This leads to problems for businesses, as truly selfish, and money-motivated people are actually
rare, as most people have a wide range of possible motivations working in their lives.
This is why business 'leaders' give prospective employees tests to find the people they can
'trust', which is to say find those who are motivated by money, which is the only motivating factor
our masters find useful.
Of course those who are motivated exclusively by the love of money are also those who believe
that austerity is the proper medicine for the rest of us.
There's one more thing about people who are motivated only by the need to accumulate money,
they also tend to steal anything that isn't tied down.
This doesn't bother FIRE sector employers since they are only concerned to ferret-out those
whose motivations might be polluted by inclinations other than greed.
Anyway, it seems to me that the importance of 'rational expectations' is in predicting the
behavior of FIRE sector employees, not the economy as a whole.
As far as the bulk of humanity goes, the only true 'rational expectation' is that people have
many and varied motivations that make it hard to predict their behavior.
Hey Econ. Prof. I'll see your DSGE model & raise with my IBGYBG** model. In theory, you'll
win the hand but we'll see who actually walks away the money.
**(by the time this thing blows up) I'll Be Gone, You'll Be Gone
The Nobel Memorial Prize in economics promotes the illusion that economics is a science.
It is better conceptualized as a literary genre, and economists should be forced to compete with
other writers for the prize in literature.
We need to get back to basics, to the real economy of people and necessary supplies to support
people. Model a simple city, with a simple agricultural hinterland. You can know how many bushels
of grain equivalent are necessary for subsistence economy. You can know how many people you have
in the countryside and in the city. You can know how many bushels of grain equivalent are in storage.
You can estimate how much of the economy is barter and how much is cash purchase. You can know
how much money is in circulation, and from those determine what velocity the money needs to have,
to pay for all that bushels of grain equivalent. You don't need calculus, just arithmetic. End
the sophistry and obscurity thru unnecessary complexity.
interesting about Kocherlakota formerly being a rational expectations devotee just the
phrase 'rational expectations' is mind boggling as if there were no reaction to any action anywhere.
Jack Bogle was on the news this morning laughing about stock picking and saying that every stock
picker that makes money is balanced out by another one who loses money and so the only thing that
makes money net-net is the long term progress of the market, (or society I would say and that
requires planning).
Not one mention of Chaos or Catastrophe Theory, which are theories of systems with non
linear feedback (aka: Fear and Greed), which appear to me to be fundamental aspects of Economics,
especially the humans who are the Economy.
Perhaps an approach to a solution for economists who are rightly disgusted with the continuing
failures of macroeconomics is to confess that economics is theology/philosophy and not science.
Economics lands on the "mammon" side of serving God or mammon.
One doesn't have to have read any Reformation theology, but only to have observed more
or less casually that human being are scarcely rational even about their own self-interest, and
then only self-deceptively. Thomas Frank has commented effectively on that point in the political
arena in What's the Matter with Kansas. To wit: Republicans have, he points out, diverted voters
attention to social/cultural issues while picking their pockets. Perhaps one might sense an intersection
of politics and economics on the latter point.
There is less need to moralize about "sin" than to see it as an heuristic. That is, one might
begin by assuming that businesses and individuals are not only guided by rationality, but to the
contrary are aided by economists, say, of the U of Minnesota ilk, to rely upon the myth of rationality
to cloak fundamental selfishness, which economists have neutered by casting it as "self-interest."
Selfishness is the root of continuing, destructive "irrationality," because it is part of what
defines a root of sin, i.e., missing the mark.
An economics of gratitude for shared abundance would be closer to the mark.
"... This suggests the sweetspot theory is also bogus, unless there are 9 years of them, meaning it's ALL been sweetspots so far. 9 yrs of sweetspots might as well be called just normal rather than sweet. ..."
"... It is pretty much all bogus, yes, Watcher. With any rudimentary understanding of volumetric calculations of OOIP in a dense shale like the Bakken, there is only X BO along the horizontal lateral that might be "obtained" from stimulation. More sand along a longer lateral does not necessarily translate into greater frac growth (an increase in the radius around the horizontal lateral). Novices in frac technology believe in halo effects, or that more sand equates to higher UR of OOIP per acre foot of exposed reservoir. That is not the case; longer laterals simply expose more acre feet of shale that can be recovered. Recovery factors in shale per acre foot will never exceed 5-6%, IMO, short of any breakthroughs in EOR technology. That will take much higher oil prices. ..."
"... Its very simple, actually bigger fracs (that cost lots more money!!) over longer laterals result in higher IP's and higher ensuing 90 day production results. That generates more cash flow (imperative at the moment) and allows for higher EUR's that translate into bigger booked reserve assets. More assets means the shale oil industry can borrow more money against those assets. Its a game, and a very obvious one at that. ..."
Here is the production graph. Not that much has happened. There was a big drop for 2011. 2009
on the other hand saw an increase. Up to the left, which is very hard to see, 2015 continues to
follow 2014 which follows 2013 which follows 2012. Will we see 2013 reach 2007 the next few months?
Its on purpose both because I wanted to zoom in and because the data for first 18 months or so
for the method I used above is not very usable. Bellow is the production profile which is better
for seeing differences the first 18 months. Above graph is roughly 6 months ahead of the production
profile graph.
And I guess we can all see no technological breakthru. 2014's green line looks superior to
first 3 mos 2015.
2016 looks like it declines to the same level about 2.5 mos later, but is clearly a steeper
decline at that point and is likely going to intersect 2014's line probably within the year.
There is zero evidence on that compilation of any technological breakthrough surging output
per well in the past 2-3 yrs.
In fact, they damn near all overlay within 2 yrs. No way in hell there is any spectacular EUR
improvement.
And . . . in the context of the moment, nope, no evidence of techno breakthrough. But also
no evidence of sweetspots first.
I suppose you could contort conclusions and say . . . Yes, the sweetspots were first - with
inferior technology, and then as they became less sweet the technological breakthroughs brought
output up to look the same.
clarifying, the techno breakthrus are bogus. They would show in that data if they were real.
And it would be far too much coincidence for techno breakthrus to just happen to increase flow
the exact amount lost from exhausting sweet spots.
This suggests the sweetspot theory is also bogus, unless there are 9 years of them, meaning
it's ALL been sweetspots so far. 9 yrs of sweetspots might as well be called just normal rather
than sweet.
It is pretty much all bogus, yes, Watcher. With any rudimentary understanding of volumetric
calculations of OOIP in a dense shale like the Bakken, there is only X BO along the horizontal
lateral that might be "obtained" from stimulation. More sand along a longer lateral does not necessarily
translate into greater frac growth (an increase in the radius around the horizontal lateral).
Novices in frac technology believe in halo effects, or that more sand equates to higher UR of
OOIP per acre foot of exposed reservoir. That is not the case; longer laterals simply expose more
acre feet of shale that can be recovered. Recovery factors in shale per acre foot will never exceed
5-6%, IMO, short of any breakthroughs in EOR technology. That will take much higher oil prices.
Its very simple, actually bigger fracs (that cost lots more money!!) over longer laterals
result in higher IP's and higher ensuing 90 day production results. That generates more cash flow
(imperative at the moment) and allows for higher EUR's that translate into bigger booked reserve
assets. More assets means the shale oil industry can borrow more money against those assets. Its
a game, and a very obvious one at that.
Nobody is breaking new ground or making big strides in greater UR. That's internet dribble.
Freddy is right; everyone in the shale biz is pounding their sweet spots, high grading as they
call it, and higher GOR's are a sure sign of depletion. Moving off those sweet spots into flank
areas will be even less economical (if that is possible) and will result in significantly less
UR per well. That is what is ridiculous about modeling the future based on X wells per month and
trying to determine how much unconventional shale oil can be produced in the US thru 2035. The
term, "past performance is not indicative of future results?" We invented that phrase 120 years
ago in the oil business.
That, sir, is pretty much the point. I see what looks like about 20% IP increase for the extra
stages post 2008/9/10. How could there not be going from 15 stages to 30+?
I see NO magic post peak. They all descend exactly the same way and by 18-20 months every drill
year is lined up. That's actually astounding - given 15 vs 30 stages. There should be more volume
draining on day 1 and year 2, but the flow is the same at month 20+ for all drill years. This
should kill the profitability on those later wells because 30 stages must cost more.
But profit is not required when you MUST have oil.
Freddy, is there something going on in the data? How can 30 stage long laterals flow the same
at production month 24 as the earlier dated wells at their production month 24 whose lengths
of well were MUCH shorter?
I can only speculate why the curves look like they do. It could be that the newer wells would
have produced more than the older wells, but closer well spacing is causing the UR to go down.
Here is the updated yearly decline rate graph. 2010 has seen increased decline rates as I suspected.
The curves are currently gathering in the 15%-20% range.
2007 only has 161 wells. So it makes the production curve a bit noisy as you can see above. Current
yearly decline rate for 2007 is 7,2% and the average from month 98 to 117 would translate to a
10,3% yearly decline rate. The 2007 curve look quite different from the other curves, so thats
why I did not include it.
Thanks. The 2008 wells were probably refracked so that curve is messed up. If we ignore 2008,
2007 looks fairly similar to the other curves (if we consider the smoothed slope.) I guess one
way to do it would be to look at the natural log of monthly output vs month for each year and
see where the curve starts to become straight indicating exponential decline. The decline rates
of many of the curves look similar through about month 80 (2007, 2009, 2010, 2011) after 2011
(2012, 2013, 2014) decline rates look steeper, maybe poor well quality or super fracking (more
frack stages and more proppant) has changed the shape of the decline curve. The shape is definitely
different, I am speculating about the possible cause.
2007 had much lower initial production and the long late plateau gives it a low decline rate also.
But yes, initial decline rates look similar to the other curves. If you look at the individual
2007 wells then you can see that some of them have similar increases to production as the 2008
wells had during 2014. I have not investigated this in detail, but it could be that those increases
are fewer and distributed over a longer time span than 2008 and it is what has caused the plateau.
If that is the case, then 2007 may not be different from the others at and we will see increased
decline rates in the future.
Regarding natural log plots. Yes it could be good if you want to find a constant exponential
decline. But we are not there yet as you can see in above graph.
One good reason why decline rates are increasing is because of the GOR increase. When they
pump up the oil so fast that GOR is increasing, then it's expected that there are some production
increases first but higher decline rates later. Perhaps completion techniques have something to
do with it also. Well spacing is getting closer and closer also and is definitely close enough
in some areas to cause reductions in UR. But I would expect lower inital production rather than
higher decline rates from that. But maybe I΄m wrong.
Ok Enno's data from NDIC shows 73 well completions in North Dakota in Sept 2016, 33 were confidential
wells, if we assume 98% of those were Bakken/TF wells that would be 72 ND Bakken/TF wells completed
in Sept 2016.
I have 75 in my data, so about the same. They have increased the number of new wells quite alot
the last two months. It looks like the addtional ones mainly comes from the DUC backlog as it
increased withouth the rig count going up. But I see that the rig count has gone up now too.
Ron you say " Bakken production continues to decline though I expect it to level off soon."
A few words of wisdom as to the main reasons why it would level off? Price rise?
Even though you asked Ron. He might think that the decline in the number of new wells per month
may have stabilized at around 71 new wells per month. If that rate of new completions per month
stays the same there will still be decline but the rate of decline will be slower. Scenario below
shows what would happen with 71 new wells per month from Sept 2016 to June 2017 and then a 1 well
per month increase from July 2017 to Dec 2018 (89 new wells per month in Dec 2018).
I am not so convinced that either Texas or the Bakken is finished declining at the current level
of completions. There was consistent completions of over 1000 wells in Texas until about October
of 2015. Then it dropped to less than half of that. The number of producing wells in Texas peaked
in June of this year. Since then, through October, it has decreased by roughly 1000 wells a month.
The Texas RRC reports are indicating that they are still plugging more than they are completing.
I remember reading one projection recently for what wells will be doing over time in the Eagle
Ford. They ran those projections for a well for over 22 years. Not sure which planet we are talking
about, but in Texas an Eagle Ford does well to survive 6 years. They keep referring to an Eagle
Ford producing half of what they will in the first two years. In most areas, I would say that
it is half in the first year.
The EIA, IEA, Opec, and most pundits have the US shale drilling turning on a dime when the oil
price reaches a certain level. If it was at a hundred now, it would still take about two years
to significantly increase production, if it ever happens. I am not a big believer that US shale
is the new spigot for supply.
The wells being shut in are not nearly as important as the number of wells completed because
the output volume is so different. So the average well in the Eagle Ford in its second month of
production produces about 370 b/d, but the average well at 68 months was producing 10 b/d. So
about 37 average wells need to be shut in to offset one average new well completion.
Point is that total well counts are not so important, it is well completions that drive output
higher.
Output is falling because fewer wells are being completed. When oil prices rise and profits
increase, completions per month will increase and slow the decline rate and eventually raise output
if completions are high enough. For the Bakken at an output level of 863 kb/d in Dec 2017 about
79 new wells per month is enough to cause a slight increase in output. My model slightly underestimates
Bakken output, for Sept 2016 my model has output at 890 kb/d, about 30 kb/d lower than actual
output (3% too low), my well profile may be slightly too low, but I expect eventually new well
EUR will start to decrease and my model will start to match actual output better by mid 2017 as
sweet spots run out of room for new wells.
Guess I will remember that for the future. The number of producing wells is not important. Kinda
like I got pooh poohed when I said the production would drop to over 1 million barrels back in
early 2015.
Do you agree that the shut in wells tend to be low output wells? So if I shut down 37 of those
but complete one well the net change in output is zero.
Likewise if I complete 1000 wells in a year, I could shut down 20,000 stripper wells and the
net change in output would be zero, but there would be 19,000 fewer producing wells, if we assume
the average output of the 1000 new wells completed was 200 b/d for the year and the stripper wells
produced 10 b/d on average.
How much do you expect output to fall in the US by Dec 2017?
Hindsight is 20/20 and lots of people can make lucky guesses. Output did indeed fall by about
1 million barrels per day from April 2015 to July 2016, can you point me to your comment where
you predicted this?
Tell us what it will be in August 2017.
I expected the fall in supply would lead to higher prices, I did not expect World output to
be as resilient as it has been and I also did not realize how oversupplied the market was in April
2015. In Jan 2015 I expected output would decrease and it increased by 250 kb/d from Jan to April,
so I was too pessimistic, from Jan 2015 (which is early 2015) to August 2016 US output has decreased
by 635 kb/d.
If you were suggesting World output would fall from Jan 2015 levels by 1 Mb/d, you would also
have been incorrect as World C+C output has increased from Feb 2015 to July 2016 by 400 kb/d.
If we consider 12 month average output of World C+C, the decline has been 340 kb/d from the 12
month average peak in August 2015 (centered 12 month average).
The dropping numbers are not as much from the wells that produce less than 10 barrels a day, but
from those producing greater than 10, but less than 100. The ones producing greater than 100 are
remaining at a consistent level over 9000 to 9500. The prediction on one million was as to the
US shale only. It is your site, you can search it better than I can,
But then don't take my word for it. You can find the same information under the Texas RRC site
under oil and gas/research and statistics/well distribution tables. Current production for Sep
can be found at online research queries/statewide. It is still dropping, and will long term at
the current activity level. Production drop for oil, only, is a little over 40k per day barrels,
and condensate is lower for September. Proofs in the pudding.
My guess is that you would see a lot more plugging reports, if it were not so expensive to plug
a well. At net income levels where they are, I expect they would put that off as long as they
could.
I trust the NDIC numbers much more than the EIA numbers which are based on a model. Enno Peters
data has 66 completions in August 2016, he has not put up his post for the Sept data yet so I
am using the Director's estimate for now. I agree his estimate is usually off a bit, Enno tends
to be spot on for the Bakken data, for Texas he relies on RRC data which is not very good.
Dennis. Someone pointed out Whiting's Twin Valley field wells being shut in for August.
It appears this was because another 13 wells in the field were recently completed.
It appears that when all 29 wells are returned to full production, this field will be very
prolific initially. Therefore, on this one field alone, we could see some impact for the entire
state.
Does anyone know if these wells are part of Whiting's JV? Telling if they had to do that on
these strong wells. Bakken just not close to economic.
I also note that average production days per well in for EOG in Parshall was 24. I haven't
looked at some of the other "older" large fields yet, but assume the numbers are similar.
I agree higher prices will be needed in the Bakken, probably $75/b or more. To be honest I
don't know why they continue to complete wells, but maybe it is a matter of ignoring the sunk
costs in wells drilled but not completed and running the numbers based on whether they can pay
back the completion costs. Everyone may be hoping the other guys fail and are just trying to pay
the bills as best they can, not sure if just stopping altogether is the best strategy.
There is the old adage that when your in a hole, more digging doesn't help much.
So my model just assumes continued completions at the August rate for about 12 months with
gradually rising prices as the market starts to balance, then a gradual increase in completions
as prices continue to rise from July 2017($78/b) to Dec 2018 (from 72 completions to about 90
completions per month 18 months later). At that point oil prices have risen to $97/b and LTO companies
are making money. Prices continue to rise to $130/b by Oct 2020 and then remain at that level
for 40 years (not likely, but the model is simplistic).
I could easily do a model with no wells completed, but I doubt that will be correct. Suggestions?
Dennis. As we have discussed before, tough to model when there is no way to be accurate regarding
the oil price.
I continue to contend that there will be no quick price recovery without an OPEC cut. Further,
the US dollar is very important too, as are interest rates.
At some point OPEC may not be able to increase output much more and overall World supply will
increase less than demand. My guess is that this will occur by mid 2017 and oil prices will rise.
OPEC output from Libya an Nigeria has recovered, but this can only go so far, maybe another 1
Mb/d at most. I don't expect any big increases from other OPEC nations in the near term.
A big guess as to oil prices has to be made to do a model.
I believe my guess is conservative, but maybe oil prices will remain where they are now beyond
mid 2017.
I expected World supply to have fallen much more quickly than has been the case at oil prices
of $50/b.
"EIA does this by using a relatively new dataset-FracFocus.org's national fracking chemical
registry-to identify the completion phase, marked by the first fracking. If a well shows up on
the registry, it's considered completed "
There is an unlikely peak oil related editorial writer hiding in the most unlikely place: a weekly
English business paper called Capital Ethiopia. The latest editorial is again putting an excellent
perspective on world events.
http://capitalethiopia.com/2016/11/15/system-failure/#.WC1ZCvl9600
For the record, I have no interest or connection to this publication other than that of a paying
reader.
Wouldn't it be nice if mainstream publications would sound a bit more like this.
Thanks all. I thought that the red queen concept meant that there had to be an increase in the
rate of completions. So that 71 year-on-year in north Dakota would only stabilise temporarily.
Perhaps the loss of sweet spots are being counteracted by the improvements in technology? I'm
assuming that even with difficulties of financing there will be a swift increase in completions
should the oil price take off, but not sure how sustainable this would be
Sometimes I think that once the price of oil is up enough that sellers can hedge the their
selling price for two or three years at a profitable level, it will hardly matter what the banks
have to say about financing new wells.
At five to ten million apiece, there will probably be plenty of money coming out of various
deep pockets to get the well drilling ball rolling again, if the profits look good.
Sometimes the folks who think the industry will not be able to raise money forget that it's
not a scratch job anymore. The land surveys, roads, a good bit of pipeline, housing, leases, etc
are already in place, meaning all it takes to get the oil started now is a drill and frack rig.
I don't know what the price will have to be, but considering that a lot of lease and other
money is a sunk cost that can't be recovered, and will have to be written off, along with the
mountain of debts accumulated so far, the price might be lower than a lot of people estimate.
Bankruptcy of old owners results in lowering the price at which an old business makes money
for its new owners.
The Red Queen effect is that more and more wells need to be completed to increase output.
As output decreases fewer wells are needed to maintain output. So at 1000 kb/d output it might
require 120 wells to be completed to maintain output (if new well EUR did not eventually decrease),
but at 850 kb/d it might require about 78 new wells per month to maintain output.
The FED oil production number for October came out yesterday. In below chart the production decline
(blue line) is the same as in the previous month, yet the trend is still a massive decline year
over year. In my view year over year comparison can show the dynamic of a trend. And it shows
clearly that in the current cycle the oil price recovery is in contrast to the cycle in 2008/9
very slow and tentative.
The year over year oil price (green line in below chart) actually decreased again year over
year and the risk of a double dip in the oil price is growing by the day. Drilling follows very
cautiously the oil price in a parallel line (red line in below chart). If there would be really
a technological advantage for shale, the red and the green line would not be paralell, but the
red line for drilling would rise much stronger. This is actually the case for Middle East drilling,
which barely fell during this cycle. This indicates that most Middle East producers still have
high margins at the current oil price. Middle East producers and also Russia can quite easily
cope with an oil price of 40 +/- 10 USD per barrel. This is why I think that the oil price will
bounce at the bottom of the barrel within above range for a few years.
There is also something interesting going on with the world economy. The shippers rose exponentionally
over the last few days (DRYS up over 1000%). Also the baltic Dry index is up 600% since the beginning
of this year. House prices here in London fell mostly at the high end. Rents for expensives
homes are down by up to 36%. Donald Trump has clearly changed something already as it becomes
increasingly clear that the dollar hoarders are paying for the infrastructure spending. I am not
sure if he understands that he is doing a lot of harm to his own business empire as well.
I expect if that depressing old banker were here he would note that instability is dangerous,
and that all the moves in treasuries currency and possibly trade flow create changes of which
the results are difficult or impossible to predict
I can easily understand your assertion that Middle Eastern and Russian oil is profitable at
forty bucks.
But if the price is to stay around forty, then it follows that you think that between them,
the producers in the Middle East and Russia will be able to supply all the oil the world wants
for the next few years.
Am I correct in saying this?
Do you think western producers will continue to pump enough at a loss ( most of them are apparently
losing money at forty bucks ) to make up the difference?
If you are willing to venture a guess, when do you think the price will get back into the sixty
dollar and up range?
If you think it won't for a lot of years, is that because you believe the economy is will be
that anemic, or because electric cars will substantially reduce demand, or both ? Or maybe you
have other reasons ?
The US has thrown the gauntlet to OPEC by claiming to becoming an oil net exporter. This has
brought OPEC in a very difficult situation. If they cut and oil gets to 70 USD per barrel
shale will pick up the slack and produce the amount OPEC has cut within a short period of time.
So, OPEC is forced to cut again, until it has lost a lot of market share and thus also a lot
of revenue.
In my view OPEC has no other choice than to produce come hell and water until something breaks.
This could be that many shale companies give up or that for instance Iran is not allowed to export
as much as they do, or there is a major conflict in the Middle East, or Saudi Arabia is running
out of cash ..
He who has the market share now, will cash in when the oil price rises. And it will rise, yet
not until something breaks. This is how business works. This is how Microsoft crushed Apple in
the nineties in the PC market and Apple then crushed Nokia in the smart phone market .
I do not think that Saudi Arabia has the freedom to compromise here even if they want. If
they blink they will be crushed by shale producers. So, the stand-off will go on for a while,
at a loose-loose situation for both parties. However this is great luck for consumers as they
can enjoy low energy prices for 2 to 3 years.
I think your numbers reflect numbers reported from ND DMR but Bloomberg might be closer to
reality for wells that will actually ever be completed (just a guess by me though). How do Bloomberg
get their numbers (e.g. removing Tight Holes, or removing old wells, not counting non-completed
waivers etc.)?
Yes indeed. The difficulty with DUCs is always, which wells do you count. I don't filter old
wells for example, and already include those that were spud last month (even though maybe casing
has not been set). I don't do a lot of filtering, so the actual # wells that really can be completed
is likely quite a bit lower. I see my DUC numbers as the upper bound. I don't know Bloombergs
method exactly, so I can't comment on that.
Discussion of Venezuelan politics should be in the open thread, but politics are going to determine
how much oil is produced there for the next few years, and the situation looks iffy indeed.
Concerning Freddy's chart of production profile of wells drilled in various years.
They all line up by about month 18 of production. This should not be possible. The later wells
have many more stages of frack. They are longer, draining more volume of rock. But the chart says
what it says. At month about 18 the 2014 wells are flowing the same rate as 2008 wells. We know
stage count has risen over those 6 yrs. 2014 wells should flow a higher rate. The shape of the
curve can be the same, but it should be offset higher.
Explanation?
How about above ground issues . . . older wells get pipelines and can flow more oil . . . nah,
that's absurd.
There needs to be a physical explanation for this.
These new wells have higher IPs, but also higher decline rates.
Closer spacing (see Freddy's comment above) and depletion of the sweet spots may also impact production
curves and EURs.
That doesn't make sense. They are longer. By a factor of 2ish. How can a 6000 foot lateral flow
exactly the same amount 2 yrs into production as a 3000 foot lateral flows 2 yrs into production?
Look at the lines. At 18 months AND BEYOND, these longer laterals flow the same oil rate as
the shorter laterals did at the same month number of production. Higher IP and higher decline
rate will affect the shape, but There Is Twice The Length..
I don't think we have information on the length of the wells, since 2008 the length of the
lateral has not changed, just the number of frack stages and amount of proppant. This seems to
primarily affect the output in the first 12 to 18 months, and well spacing and room in the sweet
spots no doubt has some effect (offsetting the greater number of frack stages etc.).
The combination of longer lateral lengths and advancements in completion technology has allowed
operators to increase the number of frac stages during completions and space them closer together.
The result has been a higher completion cost per well but with increased production and more emphasis
on profitability.
In the past five years, DTC Energy Group completion supervisors in the Bakken have helped oversee
a dramatic increase from an average of 10 stages in 2008 to 32 stages in 2013. Even 40-stage fracs
have been achieved.
One of the main reasons for this is the longer lateral lengths operators now have twice as
much space to work with (10,000 versus 5,000 feet along the lateral). Frac stages are also being
spaced closer together, roughly 300 feet apart as compared to spacing up to 800 feet in 2008,
as experienced by DTC supervisors.
By placing more fracture stages closer together, over a longer lateral length, operators have
successfully been able to improve initial production (IP) rates, as well as increase EURs over
the life of the well.
blah blah, but they make clear the years have increased length. Freddy was talking about well
spacing, this text is about stage spacing, but that is achieved because of lateral length.
Freddy can you revisit your graph code? It's just bizarre that different length wells have
the same flow rate 2 yrs out, and later.
Take a look at Enno΄s graphs at https://shaleprofile.com/
. They look the same as my graphs and we have collected and processed the data independently
from each other.
If the wells have the same wellbore riser design irrespective of lateral length (i.e. same depth,
which is a given, same bore, same downhole pump) then that section might become the main bottleneck
later in life and not the reservoir rock. With a long fat tail that seems more likely somehow
compared to the faster falling Eagle Ford wells say (but that is just a guess really). But there
may be lots of other nuances, we just don't have enough data in enough detail especially on the
late life performance for all different well designs it looks like the early ones are just reaching
shut off stage in numbers now. I doubt if the E&Ps concentrated on later life when the wells were
planned they wanted early production, and still do, to pay their creditors and company officers
bonuses (not necessarily in that order).
Hmmm. I know it is speculation, but can you flesh that out?
If some bottleneck physically exists that defines a flow rate for all wells from all years
then that does indeed explain the graphs, but what such thing could exist that has a new number
each year past year 2?
We certainly have discussed chokes for reservoir/EUR management, but the same setting to define
flow regardless of length?
The flow depends on the available pressure drop, which is made up of friction through the rock
and up the well bore (plus maybe some through the choke but not much), plus the head of the well,
plus a negative number if there is a pump. The frictional and pump numbers depend on the flow
and all the numbers depend on gas-oil ratio. Initially there is a big pressure drop in the rock
because of the high flow, then not so much. Once the flow drops the pressure at base of the well
bore just falls as a result of depletion over time, the effect of the completion design is a lot
less and lost in the noise, so all the wells behave similarly. That's just a guess I have never
seen a shale well and never run a well with 10 bpd production, conventional or anything else.
A question might be if the flow is the same why doesn't the longer well with the bigger volume
deplete more slowly, and I don't know the answer. It may be too small to notice and lost in the
noise, or to do with gas breakout dominating the pressure balance, or just the way the the physics
plays out as the fluids permeate through the rock, or we don't have long enough history to see
the differences yet.
The number of rail cars hauling petroleum is a constant in the range of 7,200 to 7,400 petroleum
cars hauled each week for a good six months now.
Seems as though petroleum by rail is more of a necessity than a choice.
The volume is down a good thirty percent since about 2013 when over 10,000 cars were hauled
per week.
Demand decreases, contracts expire, better modes of transport emerge and cost less. not as
much call for Bakken oil. Plenty of the stuff somewhere else in this world.
The trend is down, not up for petroleum hauled by rail.
If there were orders for Bakken oil for one million bpd, the production would be one million
bpd.
Over the whole rail system, petroleum and petroleum product rail car loadings were down to
10.5 thousand in September. That compares to a high point of 16.3 thousand railcars in Sept of
2014.
Coal car loadings are on the rise, from a low of 61,000 in April to 86,000 in Sept. Coal was
running a near steady 105,00 to 110,000 railcars every month in 2013 and 2014.
The chart below from RBN shows that Bakken pipeline capacity did not increase since early 2015.
But production dropped, and this primarily affected volumes of Bakken oil transported by rail.
Given the higher percentage of oil transported by pipelines, the average transporation cost
for Bakken crude should have decreased. Interesting, however, that the price differential between
the well-head Bakken sweet crude and WTI has remained within the $10-12/bbl range.
Bakken Crude Production and Takeaway Capacity
Source: RBN
Bakken Blend differentials at terminals close to North Dakota wellheads held their lowest assessment
since December Tuesday, closing at the calendar-month average of the NYMEX light sweet crude oil
contract (WTI CMA) minus $6.25/b.
While one factor dragging on Bakken differentials has clearly been a tight Brent/WTI spread -
trading around 42 cents/b Tuesday, well in from the steady $2/b seen this summer - the return
of Louisiana Light Sweet to the Midwest market may also be having an impact, according to traders.
One trader said there was an increase in volumes heading up the Capline pipeline, however, differentials
suggest LLS is still too expensive, at least compared to Bakken. Platts assessed LLS at WTI plus
$1.15/b Tuesday.
Considered by some to be the "champagne of crudes," it is unclear what appeal LLS still has for
a Midwest refiner as margins for LLS actually - and unusually - lag those for Bakken.
S&P Global Platts data shows LLS cracking margins in the Midwest closed at $3.30/b Monday, compared
to Bakken cracking margins of $6.37/b. In fact, the advantage of cracking Bakken has grown steadily
since August.
Platts margin data reflects the difference between a crude's netback and its spot price.
Netbacks are based on crude yields, which are calculated by applying Platts product price assessments
to yield formulas designed by Turner, Mason & Co.
What is clear however, is that the steeper discounts available for Bakken provide the biggest
incentive for a Midwest refiner.
The cost of getting Bakken to this market is around $3.48/b, according to Platts netback calculations,
compared to just $1.02/b for LLS.
These costs make up a significant portion of the Bakken discount.
Further, LLS moving up the Capline after many years of relative inactivity does not necessarily
suggest a new trend is in the making. However, recent pipeline reversals between Texas and Louisiana
mean more Permian crudes are capable of reaching Louisiana refineries, and thus, if priced accordingly,
could displace incremental volumes of LLS from its home market.
With current pipeline capacity out of North Dakota typically full, the marginal Bakken barrel
often gets to market via rail, and this cost has traditionally sets the floor to Bakken's discount
to WTI. And part of the recent downturn in Bakken could be chalked up to an increase in railed
volumes to the US Atlantic Coast, as Bakken cracking margins there are again in the black.
In fact, Association of American Railroad's latest monthly and weekly data shows crude and refined
product rail movements appear to have bottomed, having grown in September from August.
Weekly data bears this out as well, showing increases in three of the last four weeks.
It remains to be seen how long this will last, however, should Energy Transfer Partners Dakota
Access Pipeline go ahead as planned.
Linefill for the pipeline could boost Bakken differentials, potentially making the grade too expensive
to rail east. However, the devil is in the details.
Traders and analysts have pegged Dakota Access pipeline tariffs between $4.50-$5.50/b for uncommitted
shippers between North Dakota and Patoka, Illinois. A further $6.50/b would be needed to bring
the crude south from Patoka to Nederland, Texas, sources have said.
If this $11-$12/b combined pipeline estimated cost were to pan out, it would be more expensive
than the $10.20/b Platts assumes in its Bakken USAC rail-based netback calculation.
Oil rig count in the Permian is up 73.5% from this year's low the biggest increase among
all US basins.
It is still only 41% of October 2014 peak, but this is much better than the Bakken and especially
the Eagle Ford where drilling activity remains depressed.
As of September 2016, 4 counties produced 90.1% of all the Bakken/Three Forks oil production
in North Dakota: McKenzie, Mountrail, Williams and Dunn. Relative to December 2014, North Dakota
Bakken/Three Forks oil production is off 243,098 b/d relative to December 2014 while the number
of producing wells is up 1861 based upon data from the state.
Based upon state data, the number of producing wells/square mile is 1.29 in Mountrail County,
1.22 in McKenzie County, 1.02 in Willams County, and 0.86 in Dunn County. How high can the number
of producing wells/square mile go?
Is there something more than reduced drilling to explain the drop in production?
This shows well density and production from last September. The distance is concentric from a
"production centre of gravity" i.e. weighted average by production for all wells. The core area
("sweet spot") is a circle of about 50 to 60 kms only (it's squashed out a bit to the west and
missing a bite in the SW). Maximum well density (and with the best wells is 120 to 160 acres,
and falls off quickly outside the core. The core is getting saturated.
"U.S. drilling activity is increasingly concentrated in the Permian Basin . The Permian now
holds nearly as many active oil rigs as the rest of the United States combined, including both
onshore and offshore rigs, and it is the only region in EIA's Drilling Productivity Report where
crude oil production is expected to increase for the third consecutive month."
Permian Basin also dominates M&A activity in the US E&P sector.
From the same EIA report:
"Several of the larger M&A deals involved Permian Basin assets, where drilling and production
is beginning to increase.
Based on data through November 10, the second half of 2016 already has more M&A spending than
the first half of 2016, but on fewer deals. The 93 M&A announcements in the third quarter of 2016
totaled $16.6 billion, for an average of $179 million per deal, the largest per deal average since
the third quarter of 2014. Although only 11 of the 49 deals so far in the fourth quarter of 2016
are in the Permian Basin, they accounted for more than half of total deal value."
RRC Texas for September came out recently. As others will probably elaborate more on the data,
I just want to show if year over year changes in production could be use as a predictive tool
for future production (see below chart).
It is obvious that year over year changes (green line) beautifully predicted oil production
(red line) at a time lag of about 15 month. Even when production was still growing, the steep
decline of growth rate indicated already the current steep decline.
The interesting thing is that the year over year change is a summary indicator. It does not
tell why production declines or rises. It can be the oil price, interest rates or just depletion
even seasonal factors are eliminated. It just shows the strength of a trend.
I am curious myself how this works out. The yoy% indicator predicts that Texas will have lost
another million bbl per day by end next year. That sounds quite like a big plunge. One explanation
could be the fact that we have now low oil prices and high interest rates. In all other cycles
it has been the other way around: low oil prices came hand in hand with low interest rates. This
could be now a major obstacle for companies to grow production.
This concept of following year over year changes works of course just for big trends, yet for
investment timing it seems exactly the right tool. Another huge wave is coming in electric vehicles
which are growing in China by 120% year over year. Here we have the same situation as for shale
7 years ago: Although current EV sales are barely 1 million per year worldwide, the growth rate
reveals already an huge wave coming. So as an investor it is always necessary to stay ahead of
the trend and I think this can be done by observing the year over year% change.
Strong, credible allegations of high-level criminal activity can bring down a government. When the
government lacks an effective, fact-based defense, other techniques must be employed. The success
of these techniques depends heavily upon a cooperative, controlled press and a mere token opposition
party.
1. Dummy up . If it's not reported, if it's not news, it didn't happen.
2. Wax indignant . This is also known as the "how dare you" gambit.
3. Characterize the charges as "rumors" or, better yet, "wild rumors." If, in spite of the news
blackout, the public is still able to learn about the suspicious facts, it can only be through "rumors."
4. Knock down straw men . Deal only with the weakest aspect of the weakest charges. Even better,
create your own straw men. Make up wild rumors and give them lead play when you appear to debunk
all the charges, real and fanciful alike.
5. Call the skeptics names like "conspiracy theorist," "nut," "ranter," "kook," "crackpot" and,
of course, "rumor monger." You must then carefully avoid fair and open debate with any of the people
you have thus maligned.
6. Impugn motives . Attempt to marginalize the critics by suggesting strongly that they are not
really interested in the truth but are simply pursuing a partisan political agenda or are out to
make money.
7. Invoke authority . Here the controlled press and the sham opposition can be very useful.
8. Dismiss the charges as "old news."
9. Come half-clean . This is also known as "confession and avoidance" or "taking the limited hang-out
route." This way, you create the impression of candor and honesty while you admit only to relatively
harmless, less-than-criminal "mistakes." This stratagem often requires the embrace of a fall-back
position quite different from the one originally taken.
10. Characterize the crimes as impossibly complex and the truth as ultimately unknowable.
11. Reason backward , using the deductive method with a vengeance. With thoroughly rigorous deduction,
troublesome evidence is irrelevant. For example: We have a completely free press. If they know of
evidence that the Bureau of Alcohol, Tobacco, and Firearms (BATF) had prior knowledge of the Oklahoma
City bombing they would have reported it. They haven't reported it, so there was no prior knowledge
by the BATF. Another variation on this theme involves the likelihood of a conspiracy leaker and a
press that would report it.
12. Require the skeptics to solve the crime completely.
13. Change the subject . This technique includes creating and/or reporting a distraction.
At least with Trump I expect him to talk crap but
Obama talks crap as well when he should know better:
The values that we talked about -- the values of democracy, and free speech, and international
norms, and rule of law, respecting the ability of other countries to determine their own destiny
and preserve their sovereignty and territorial integrity -- those things are not something
that we can set aside.
"... The Demon In Democracy: Totalitarian Temptations In Free Societies . ..."
"... Brave New World ..."
"... The Demon In Democracy ..."
"... he explains how Poland cast off the bonds of communism only to find that liberal democracy imposed similar interdictions on free thought and debate: ..."
"... Very quickly the world became hidden under a new ideological shell and the people became hostage to another version of the Newspeak but with similar ideological mystifications. Obligatory rituals of loyalty and condemnations were revived, this time with a different object of worship and a different enemy. ..."
"... The new commissars of the language appeared and were given powerful prerogatives, and just as before, mediocrities assumed their self-proclaimed authority to track down ideological apostasy and condemn the unorthodox - all, of course, for the glory of the new system and the good of the new man. ..."
"... Media - more refined than under communism - performed a similar function: standing at the forefront of the great transformation leading to a better world and spreading the corruption of the language to the entire social organism and all its cells. ..."
"... Trump's victory seems logical as a continuation of a more general process that has been unveiling in the Western World: Hungary, Poland, Brexit, possible political reshufflings in Germany, France, Austria, etc. ..."
"... More and more people say No ..."
"... What seems to be common in the developments in Europe and the US is a growing mistrust towards the political establishment that has been in power for a long time. People have a feeling that in many cases this is the same establishment despite the change of the governments. ..."
"... This establishment is characterized by two things: first, both in the US and in Europe (and in Europe even more so) its representatives unabashedly declare that there is no alternative to their platform, that there is practically one set of ideas - their own - every decent person may subscribe to, and that they themselves are the sole distributors of political respectability; second, the leaders of this establishment are evidently of the mediocre quality, and have been such long enough for the voters to notice. ..."
"... Because the ruling political elites believe themselves to steer the society in the only correct political course it should take, and to be the best quality products of the Western political culture, they try to present the current conflict as a revolt of the unenlightened, confused and manipulated masses against the enlightened elites. ..."
"... The new aristocrats are full of contempt for the riffraff, do not mince words to bully them, use foul language, break the rules of decency - and doing all this does not make them feel any less aristocratic. ..."
"... When eight years ago America elected as their president a completely unknown and inexperienced politician, and not exactly an exemplar of political virtue to boot, this choice was universally acclaimed as the triumph of political enlightenment, and the president was awarded the Nobel Prize in advance, before he could do anything (not that he did anything of value afterwards). The continuation of this politics by Hillary Clinton for another eight years would have elevated this establishment and their ideas to an even stronger position with all deplorable consequences. ..."
"... Many Christians are understandably relieved that the state's ongoing assault on the churches and on religious liberty in the name of sex-and-gender ideology, will probably be halted under the new president. ..."
"... Q: Trump is a politician of the nationalist Right, but he is not a conservative in any philosophical or cultural sense. ..."
"... Had the vote gone only a bit differently in some states, today we would be talking about the political demise of American conservatism. Instead, the Republican Party is going to be stronger in government than it has been in a very long time - but the party has been shaken to its core by Trump's destruction of its establishment. Is it credible to say that Trump destroyed conservatism - or is it more accurate to say that the Republican Party, through its own follies, destroyed conservatism as we have known it, and opened the door for the nationalist Trump? ..."
"... The new generations of the neocons gave up on big ideas while the theocons, old or new, never managed to have a noticeable impact on the Republican mainstream. ..."
"... The Demon in Democracy ..."
"... Today the phrase "more Europe" does not mean "more classical education, more Latin and Greek, more knowledge about classical philosophy and scholasticism", but it means giving more power to the European Commission. No wonder an increasing number of people when they hear about Europe associate it with the EU, and not with Plato, Thomas Aquinas or Johann Sebastian Bach. ..."
"... Considering that in every Western country education has been, for quite a long time, in a deep crisis and that no government has succeeded in overcoming this crisis, a mere idea of bringing back classical education into schools in which young people can hardly read and write in their own native language sounds somewhat surrealist. ..."
"... The results of the elections must have shaken the EU elites, and from that point of view Trump's victory was beneficial for those Europeans like myself who fear the federalization of the European Union and its growing ideological monopoly. There is more to happen in Europe in the coming years so the hope is that the EU hubris will suffer further blows and that the EU itself will become more self-restrained and more responsive to the aspirations of European peoples. ..."
Legutko is a Polish philosopher and politician who was active in the anti-communist resistance.
He is most recently the author of
The Demon In Democracy: Totalitarian Temptations In Free Societies . In this post from September,
I said that reading the book - which is clearly and punchily written - was like
taking a red pill - meaning that it's hard to see our own political culture the same way after
reading Legutko. His provocative thesis is that liberal democracy, as a modern political philosophy,
has a lot more in common with that other great modern political philosophy, communism, than we care
to think. He speaks as a philosopher who grew up under communism, who fought it as a member of Solidarity,
and who took part in the reconstruction of Poland as a liberal democracy. It has been said that the
two famous inhuman dystopias of 20th century English literature - Orwell's 1984 and Huxley's
Brave New World - correspond, respectively, to Soviet communism and mass hedonistic technocracy.
Reading Legutko, you understand the point very well.
In
this post , I quote several passages from The Demon In Democracy . Among them, these
paragraphs in which he explains how Poland cast off the bonds of communism only to find that
liberal democracy imposed similar interdictions on free thought and debate:
Very quickly the world became hidden under a new ideological shell and the people became
hostage to another version of the Newspeak but with similar ideological mystifications. Obligatory
rituals of loyalty and condemnations were revived, this time with a different object of worship
and a different enemy.
The new commissars of the language appeared and were given powerful prerogatives, and just
as before, mediocrities assumed their self-proclaimed authority to track down ideological apostasy
and condemn the unorthodox - all, of course, for the glory of the new system and the good of the
new man.
Media - more refined than under communism - performed a similar function: standing at the
forefront of the great transformation leading to a better world and spreading the corruption of
the language to the entire social organism and all its cells.
And:
If the old communists lived long enough to see the world of today, they would be devastated
by the contrast between how little they themselves had managed to achieve in their antireligious
war and how successful the liberal democrats have been. All the objectives the communists set
for themselves, and which they pursued with savage brutality, were achieved by the liberal democrats
who, almost without any effort and simply by allowing people to drift along with the flow of modernity,
succeeded in converting churches into museums, restaurants, and public buildings, secularizing
entire societies, making secularism the militant ideology, pushing religions to the sidelines,
pressing the clergy into docility, and inspiring powerful mass culture with a strong antireligious
bias in which a priest must be either a liberal challenging the Church of a disgusting villain.
After the US election, Prof. Legutko agreed to answer a few questions from me via e-mail. Here
is our correspondence:
RD:What do you think of Donald Trump's victory, especially in context of Brexit
and the changing currents of Western politics?
RL: In hindsight, Trump's victory seems logical as a continuation of a more general
process that has been unveiling in the Western World: Hungary, Poland, Brexit, possible political
reshufflings in Germany, France, Austria, etc. What this process, having many currents and
facets, boils down to is difficult to say as it appears more negative than positive. More
and more people say No , whereas it is not clear what exactly they are in favor of.
What seems to be common in the developments in Europe and the US is a growing mistrust
towards the political establishment that has been in power for a long time. People have a feeling
that in many cases this is the same establishment despite the change of the governments.
This establishment is characterized by two things: first, both in the US and in Europe
(and in Europe even more so) its representatives unabashedly declare that there is no alternative
to their platform, that there is practically one set of ideas - their own - every decent person
may subscribe to, and that they themselves are the sole distributors of political respectability;
second, the leaders of this establishment are evidently of the mediocre quality, and have been
such long enough for the voters to notice.
Because the ruling political elites believe themselves to steer the society in the only
correct political course it should take, and to be the best quality products of the Western political
culture, they try to present the current conflict as a revolt of the unenlightened, confused and
manipulated masses against the enlightened elites. In Europe it sometimes looks like an attempt
to build a new form of an aristocratic order, since a place in the hierarchy is allotted to individuals
and groups not according to their actual education, or by the power of their minds, or by the
strength of their arguments, but by a membership in this or that class. The new aristocrats
are full of contempt for the riffraff, do not mince words to bully them, use foul language, break
the rules of decency - and doing all this does not make them feel any less aristocratic.
It is, I think, this contrast between, on the one hand, arrogance with which the new aristocrats
preach their orthodoxy, and on the other, a leaping-to-the-eye low quality of their leadership
that ultimately pushed a lot of people in Europe and the US to look for alternatives in the world
that for too long was presented to them as having no alternative.
When eight years ago America elected as their president a completely unknown and inexperienced
politician, and not exactly an exemplar of political virtue to boot, this choice was universally
acclaimed as the triumph of political enlightenment, and the president was awarded the Nobel Prize
in advance, before he could do anything (not that he did anything of value afterwards). The continuation
of this politics by Hillary Clinton for another eight years would have elevated this establishment
and their ideas to an even stronger position with all deplorable consequences.
For an outside observer like myself, America after the election appears to be divided
but in a peculiar way. On the one side there is the Obama-Clinton America claiming to represent
what is best in the modern politics, more or less united by a clear left-wing agenda whose aim
is to continue the restructuring of the American society, family, schools, communities, morals.
This America is in tune with what is considered to be a general tendency of the modern world,
including Europe and non-European Western countries. But there seems to exist another America,
deeply dissatisfied with the first one, angry and determined, but at the same time confused and
chaotic, longing for action and energy, but unsure of itself, proud of their country's lost greatness,
but having no great leaders, full of hope but short of ideas, a strange mixture of groups and
ideologies, with no clear identity or political agenda. This other America, if personified, would
resemble somebody not very different from Donald Trump.
Q: Trump won 52 percent of the Catholic vote, and over 80 percent of the white Evangelical
Christian vote - this, despite the fact that he is in no way a serious Christian, and, on evidence
of his words and deeds, is barely a Christian at all. Many Christians are understandably
relieved that the state's ongoing assault on the churches and on religious liberty in the name
of sex-and-gender ideology, will probably be halted under the new president. From your
perspective, should US Christians be hopeful about their prospects under a Trump presidency, or
instead wary of being tempted by a false prophet?
A: Christians have been the largest persecuted religious group in the non-Western world, but
sadly they have also been the largest victimized religious group in those Western countries that
have contracted a disease of political correctness (which in practice means almost all of them).
Some Western Christians, including the clergy, abandoned any thought of resistance and not only
capitulated but joined the forces of the enemy and started disciplining their own flock. No wonder
that many Christians pray for better times hoping that at last there will appear a party or a
leader that could loosen the straitjacket of political correctness and blunt its anti-Christian
edge. It was then to be expected that having a choice between Trump and Clinton, they would turn
to the former. But is Trump such a leader?
Anti-Christian prejudices have taken an institutional and legal form of such magnitude that
no president, no matter how much committed to the cause, can change it quickly. Today in America
it is difficult even to articulate one's opposition to political correctness because the public
and private discourse has been profoundly corrupted by the left-wing ideology, and the American
people have weaned themselves from any alternative language (and so have the Europeans). Any movement
away from this discourse requires more awareness of the problem and more courage than Trump and
his people seem to have. What Trump could and should do, and it will be a test of his intentions,
are three things.
First, he should refrain from involving his administration in the anti-Christian actions, whether
direct or indirect, thus breaking off with the practice of his predecessor. Second, he should
nominate the right persons for the vacancies in the Supreme Court. Third, he should resist the
temptation to cajole the politically correct establishment, as some Republicans have been doing,
because not only will it be a bad signal, but also display naοvete: this establishment is never
satisfied with anything but an unconditional surrender of its opponents.
Whether these decisions will be sufficient for American Christians to launch a counteroffensive
and to reclaim the lost areas, I do not know. A lot will depend on what the Christians will do
and how outspoken they will be in making their case public.
Q: Trump is a politician of the nationalist Right, but he is not a conservative in any
philosophical or cultural sense.Had the vote gone only a bit differently in some states,
today we would be talking about the political demise of American conservatism. Instead, the Republican
Party is going to be stronger in government than it has been in a very long time - but the party
has been shaken to its core by Trump's destruction of its establishment. Is it credible to say
that Trump destroyed conservatism - or is it more accurate to say that the Republican Party, through
its own follies, destroyed conservatism as we have known it, and opened the door for the nationalist
Trump?
A: Conservatism has always been problematic in America, where the word itself has acquired
more meanings, some of them quite bizarre, than in Europe. A quite common habit, to give an example,
of mentioning libertarianism and conservatism in one breath, thereby suggesting that they are
somehow essentially related, is proof enough that a conservative agenda is difficult for the Americans
to swallow. If I am not mistaken, the Republican Party has long relinquished, with very few exceptions,
any closer link with conservatism. If conservatism, whatever the precise definition, has something
to do with a continuity of culture, Christian and Classical roots of this culture, classical metaphysics
and anthropology, beauty and virtue, a sense of decorum, liberal education, family, republican
paideia, and other related notions, these are not the elements that constitute an integral part
of an ideal type of an Republican identity in today's America. Whether it has been different before,
I am not competent to judge, but certainly there was a time when the intellectual institutions
somehow linked to the Republican Party debated these issues. The new generations of the neocons
gave up on big ideas while the theocons, old or new, never managed to have a noticeable impact
on the Republican mainstream.
Given that there is this essential philosophical weakness within the modern Republican identity,
Donald Trump does not look like an obvious person to change it by inspiring a resurgence of conservative
thinking. I do not exclude however, unlikely as it seems today, that the new administration will
need solely for instrumental reasons some big ideas to mobilize its electorate and to give
them a sense of direction, and that a possible candidate to perform this function will be some
kind of conservatism. Liberalism, libertarianism and saying 'no' to everything will certainly
not serve the purpose. Nationalism looks good and played its role during two or three months of
the campaign, but might be insufficient for the four (eight?) years that will follow.
Q: Though the Republicans will soon have their hands firmly on the levers of political power,
cultural institutions - especially academia and the news and entertainment media - are still thoroughly
progressive. In The Demon in Democracy , you write that "it is hard to imagine freedom
without classical philosophy and the heritage of antiquity, without Christianity and scholasticism
[and] many other components of the entire Western civilization." How can we hope to return to
the roots of Western civilization when the culture-forming institutions are so hostile to it?
A: It is true that we live at a time of practically one orthodoxy which the majority of intellectuals
and artists piously accept, and this orthodoxy - being some kind of liberal progressivism - has
less and less connection with the foundations of Western civilization. This is perhaps more visible
in Europe than in the US. In Europe, the very term "Europe" has been consistently applied to the
European Union. Today the phrase "more Europe" does not mean "more classical education, more
Latin and Greek, more knowledge about classical philosophy and scholasticism", but it means giving
more power to the European Commission. No wonder an increasing number of people when they hear
about Europe associate it with the EU, and not with Plato, Thomas Aquinas or Johann Sebastian
Bach.
It seems thus obvious that those who want to strengthen or, as is more often the case, reintroduce
classical culture in the modern world will not find allies among the liberal elites. For a liberal
it is natural to distance himself from the classical philosophy, from Christianity and scholasticism
rather than to advocate their indispensability for the cultivation of the Western mind. After
all, these philosophies they would say - were created in a pre-modern non-democratic and non-liberal
world by men who despised women, kept slaves and took seriously religious superstitions. But it
is not only the liberal prejudices that are in the way. A break-up with the classical tradition
is not a recent phenomenon, and we have been for too long exposed to the world from which this
tradition was absent.
There is little chance that a change may be implemented through a democratic process. Considering
that in every Western country education has been, for quite a long time, in a deep crisis and
that no government has succeeded in overcoming this crisis, a mere idea of bringing back classical
education into schools in which young people can hardly read and write in their own native language
sounds somewhat surrealist. A rule that bad education drives out good education seems to
prevail in democratic societies. And yet I cannot accept the conclusion that we are doomed to
live in societies in which neo-barbarism is becoming a norm.
How can we reverse this process then? In countries where education is primarily the responsibility
of the state, it is the governments that may - hypothetically at least - have some role to play
by using the economic and political instruments to stimulate the desired changes in education.
In the US I suspect - the government's role is substantially more reduced. So far however the
European governments, including the conservative ones, have not made much progress in reversing
the destructive trend.
The problem is a more fundamental one because it touches upon the controversy about what constitutes
the Western civilization. The liberal progressives have managed to impose on our minds a notion
that Christianity, classical metaphysics, etc., are no longer what defines our Western identity.
A lot of conservatives intellectuals and politicians have readily acquiesced to this notion.
Unless and until this changes and our position of what constitutes the West becomes an integral
part of the conservative agenda and a subject of public debate, there is not much hope things
can change. The election of Donald Trump has obviously as little to do with Scholasticism or Greek
philosophy as it has with quantum mechanics, but nevertheless it may provide an occasion to reopen
an old question about what makes the American identity and to reject a silly but popular answer
that this identity is procedural rather than substantive. And this might be a first step to talk
about the importance of the roots of the Western civilization.
You have written that "liberalism is more about struggle with non-liberal adversaries than
deliberation with them." Now even some on the left admit that its embrace of political correctness,
multiculturalism, and so-called "diversity," is partly responsible for Trump's victory. How do
Brexit and Trump change the terms of the political conversation, especially now that it has been
shown that there is no such thing as "the right side of history"?
Liberalism, despite its boastful declarations to the contrary, is not and has never been about
diversity, multiplicity or pluralism. It is about homogeneity and unanimity. [Neo]Liberalism wants
everyone and everything to be [neo]liberal, and does not tolerate anyone or anything that is not
liberal. This is the reason why the [neo]liberals have such a strong sense of the enemy. Whoever
disagrees with them is not just an opponent who may hold different views but a potential or actual
fascist, a Hitlerite, a xenophobe, a nationalist, or as they often say in the EU a populist.
Such a miserable person deserves to be condemned, derided, humiliated and abused.
The Brexit vote could have been looked at as an exercise in diversity and, as such, dear to
every pluralist, or empirical evidence that the EU in its present form failed to accommodate diversity.
But the reaction of the European elites was different and predictable threats and condemnations.
Before Brexit the EU reacted in a similar way to the non-[neo][neo]liberals winning elections
in Hungary and then in Poland, the winners being immediately classified as fascists and the elections
as not quite legitimate. The [neo]liberal mindset is such that accepts only those elections and
choices in which the correct party wins.
I am afraid there will be a similar reaction to Donald Trump and his administration. As long
as the [neo]liberals set the tone of the public debate, they will continue to bully both those
who, they say, were wrongly elected and those who wrongly voted. This will not stop until it becomes
clear beyond any doubt that the changes in Europe and in the US are not temporary and ephemeral
and that there is a viable alternative which will not disappear with the next swing of the democratic
pendulum. But this alternative, as I said before, is still in the process of formation and we
are not sure what will be the final result.
There will be elections in several key European nations next year - Germany and France, in
particular. What effect do you expect Trump's victory to have on European voters? How do you,
as a Pole, view Trump's fondness for Vladimir Putin?
From a European perspective, Clinton's victory would have meant a tremendous boost to the EU
bureaucracy, its ideology and its "more Europe" strategy. The forces of the self-proclaimed Enlightenment
would have gone ecstatic and, consequently, would have made the world even more unbearable not
only for conservatives. The results of the elections must have shaken the EU elites, and from
that point of view Trump's victory was beneficial for those Europeans like myself who fear the
federalization of the European Union and its growing ideological monopoly. There is more to happen
in Europe in the coming years so the hope is that the EU hubris will suffer further blows and
that the EU itself will become more self-restrained and more responsive to the aspirations of
European peoples.
"The fact that he made some warm remarks about Putin during the campaign does not make me happy."
You would think an advocate against the Western liberal establishment would view Putin favorably,
as Pat Buchanan does. I guess old nationalist rivalries trump sticking it to the snooty elitists
in this case.
[NFR: Are you serious? Legutko's country was occupied and tyrannized by the Soviets for
nearly 50 years. Poland has had to worry about Russian imperialism for much longer than that,
as a matter of national survival. Any Pole that doesn't worry about Putin's ambitions is nuts.
- RD]
"it may provide an occasion to reopen an old question about what makes the American identity and
to reject a silly but popular answer that this identity is procedural rather than substantive"
That's a good assessment, from an outside observer.
However, his anti-Russian views appear to be driven by his own Polish nationalism and past
Warsaw Pact Soviet imperialism, the latter ideologically and practically as dead as Josef Stalin,
and objectivity thus distorted, are much less clear. Imagine, welcoming a foreign imperial occupation
one tied to the very liberal order he critiques so effectively.
I think that anti-interventionists, cheered by those Trump campaign statements questioning
the NATO mission post-communism, and defense cost bearing so that clients become real allies instead,
or not, are far more objectively considerate of Americans' interests through a drawdown from aggressive
globalist/militarist hegemony, than his understandable but very subjective Polish parochial prejudices.
re education: Andrew Pudewa for Secretary of Education! (Seriously, he said on FB he has some
idea what he'd do if he could get that post.)
re Russia: Hillary's rhetoric must not have translated very well over there At any rate, if
the Poles are so scared of Russian attack, they can train their own sons to defend them. Or maybe
they should just learn to get along with their neighbors.
"The liberal progressives have managed to impose on our minds a notion that Christianity, classical
metaphysics, etc., are no longer what defines our Western identity."
I'm sorry, but this is a lunatic idea. Too bad it is the lynchpin of all "new right" thought.
You want to return to some imaginary West in which nothing happened in intellectual life after
about 1650.
It would take a book to properly refute Legutko and I am not inclined to do the work of writing
one but to put it simply, he has no knowledge of how Americans think. Americans are, at heart,
pragmatists. We don't care about ideology and most of the time we don't bother much with religion
either except to give polite lip service to it. It has no claim on the American soul.
Americans are at heart easy going people who have no use for either the loons of Liberalism
or Conservatism. Right now it is the Liberals, with their particular brand of silliness that are
out of favor. A few years ago it was Conservatives that no one wanted for next door neighbors.
The things Legutko writes of Americans could not care less about.
The American embrace of Putin is simply the result of American disgust with Europe, a continent
populated by a peculiar species of coward and ungrateful wretch, a museum that produces nothing
of any value any more and is governed by self-righteous morons who have nothing better to do with
their time than to lecture the infinitely more intelligent Americans. The American attitude towards
Europe is, "To Hell with it." In such an environment, of course we are willing to let Putin have
the damned place and the Devil give him good office. Trump, with his expressed contempt for the
opinions of foreign leaders, especially the Europeans, fits this perfectly.
I think an acceptable deal could be reached with Russia.
You have to think about it from their perspective: They have lost all power and influence not
only in the territories that Stalin seized, but also in many that were in the traditional sphere
of the Russian Empire. They view extension of Western influence and NATO into these territories
as an act of aggression and American aggrandizement. The loss of Ukraine is the cruelest cut of
all, because Kiev is the cradle of Russian Orthodox civilization.
Russian nationalists loathe Gorbachev, in part because he could easily have negotiated a deal
enforcing neutrality in formally Soviet-dominated territories as Soviet troops were withdrawn.
Instead, from their point of view, he gave it all away for nothing and left the Motherland open
to encirclement.
There is plainly space for a deal that would include security guarantees for Russia's neighbors
but also mandatory neutrality. Russia would take that deal. So far at least, we wouldn't, because
US policymakers want encirclement and domination in the region.
Let's see if Trump rethinks this. Russia is very imperfect, but we face much bigger and more
important threats. We'd be better off forging an alliance with Russia if we can.
Mr. Legutko is a member of PiS, the party which currently rules Poland. Immediately after coming
to power they turned all public TV Stations into Government mouthpieces, and practically shut
down the supreme court.
Communism is not a "political philosophy"; it's an economic theory. If they guy actually called
it a political theory (he may not have; those may be Rod's words, written in haste) then he's
no more worth listening to than a astronomer who asserts that the sun and planet revolve around
the Earth.
"this establishment is never satisfied with anything but an unconditional surrender of its opponents."
The Right should have learned this lesson with the Regan Amnesty. "A Deal is never a Deal"
with the left. For the Left, any comprise is just an opportunity to move sidelines yard markers.
Rod, do yourself a huge favor and if you don't have it already, pick up a copy of C. Lasch's
posthumous book The Revolt of the Elites and the Betrayal of Democracy. For some reason
I'd missed this one along the way, but I bought a copy recently and started it over the weekend.
He wrote it in the early 90's, but it's so on-target you'd think it was written yesterday. The
introduction alone is worth the price of the book - obviously he did not have Trump, or even a
Trump-like character in mind, but his observations on conservatism, liberalism, populism, etc.,
are head-shakingly accurate. Not to be missed.
"he explains how Poland cast off the bonds of communism only to find that liberal democracy imposed
similar interdictions on free thought and debate."
I am sorry, but I have travelled throughout Eastern Europe before and after the fall of communism.
Anyone who tells me that liberal democracy there (where it exists) imposes "similar interdictions
on free thought and debate" is just not to be taken seriously.
This is an article I would have posted on Facebook if the tag line were not so inflammatory that
it would go unread and in fact do more harm than good.
This makes perfect sense . . . or it's utter nonsense. The problem is Donald Trump is a wild card.
No one knows exactly how Trump will play or be played. If Trump accepts the role of Head of State,
leaving the details of governing to others (Pense, Ryan, McConnell, whomever) there might be some
consistency. A conservative agenda (as Americans have come to know it) will be possible.
But if the Donald Trump who has displayed zero substantive knowledge about anything decides
to actually govern (or worse yet, sporadically and whimsically govern) then in the immortal words
of Bette Davis: "Fasten your seat belts! It's going to be a bumpy night."
Legutko is going to be disappointed but, I suspect, not surprised when Trump simply throws open
the door. And then asks Putin if he can get the base construction contracts.
I'm reminded of the lyrics in a song by The Who: "Meet the new boss, Same as the old boss." The
song title is "We won't get fooled again." Good luck with that.
Maybe there is just something in the nature of humans which compels us to want to impose our
biases, beliefs, and visions of society and the future upon those around us. Maybe it just boils
down to eventual fatigue from constantly arguing with people who will never end up agreeing to
your point of view: the simple solution has always been to make your opponents shut up. Failing
that, we resort to locking them up, or driving them out, or ultimately killing them.
With regard to this quote:
"Whether these decisions will be sufficient for American Christians to launch a counteroffensive
and to reclaim the lost areas, I do not know. A lot will depend on what the Christians will do
and how outspoken they will be in making their case public."
I'm not sure how to take this. Is he merely hoping to carve out some space for Christians to
co-exist with a larger secular majority. Or does he still harbor hope of restoring Christianity
as a central element of Western Culture, against the resistance of the secularists? If the latter
is his dream, I would point out that using institutional and political power to re-impose Christianity
upon the masses is no different that what the Left is doing now impose its preferred set of beliefs.
He would just be looking for a new Boss, if you will.
With regard to the European Project: It is worth remembering that European Nationalism resulted
many centuries of warfare between contending powers on the continent. It culminated in two world
wars, the second of which left most of that area of the world in ruins. The original motivation
for the European Union was to end that cycle of warfare, by more tightly linking together the
economies of these nations.
Now we see a resurgence of Russian Nationalism, with that country seeking to expand its sphere
of influence again, and gleefully egging on the Nationalists in Western Europe, with the hope
of finishing off the NATO military alliance. As emotionally satisfying as it might be to stop
the drive toward further unification and uniformity, a return to something worse is clearly possible.
Now Legutko clearly believes that the European Union and NATO were failing at the task of restraining
Russian imperialism anyway. From a Eastern European perspective, that is probably true. But if
you look around the conservative blogosphere, it isn't hard to find self described conservatives
who see that as a pragmatic necessity. They say it was a mistake to expand NATO, that those countries
were always naturally in the Russian sphere of influence, and coping with that reality it their
problem, and not our problem. The irony is that the more nationalistic and less global we become
in our perspective, the less likely we are to help protect Legutko's homeland from its larger,
aggressive neighbor to the East.
This guy derides the neocons, but on Russia, he is as bad or worse than them. How is Russia an
imperial nation when they have stood by and let NATO expand to their doorstep when the US promised
it would go no further east than Berlin? How is it imperialist that they secured their military
foothold in Crimea (killing no one I might add) against a US backed, fascist coup against the
democratically elected government of Ukraine?
[NFR: I think you should consider
the history of Poland
in the 19th and 20th centuries - especially from 1945 through 1989 - if you want to understand
why Poles worry about Russian imperialism. - RD]
I loathe the election of Trump and what it will do here (so much so, that our family will likely
move to Switzerland, where my wife is from and in which my 3 daughters all have citizenship),
but one of the quite reasonable things that Trump has said is that "If we got along with Russia,
it wouldn't be a bad thing."
I don't think that means letting Putin do whatever he wants, and I have zero or sub-zero faith
that Trump will implement anything like a sensible approach to whatever Putin does, but trying
to get along with Russia is not crazy.
At any rate, if the Poles are so scared of Russian attack, they can train their own sons to
defend them. Or maybe they should just learn to get along with their neighbors.
These beastly Poles. Always provoking their Russian and German neighbors.
Legato embraces his own set of traumatic, reactionary 'isms' which, like most 'isms', are covered
with a patina of light philosophy to make them seem like the wisdom of the ages. I'm not sure
he's entirely comfortable with the outcomes of the Enlightenment
[NFR: Of course he's not! Neither am I. Where you been? - RD]
We've seen the make-shift "fake news" list created by a
leftist feminist professor. Well, another fake news list has been revealed
and this one holds a lot more water.
This list contains the culprits who told us that Iraq had weapons of mass destruction and lied
us into multiple bogus wars. These are the news sources that told us "if you like your doctor, you
can keep your doctor." They told us that Hillary Clinton had a 98% of winning the election. They
tell us in a never-ending loop that "The economy is in great shape!"
"... With Trump, exactly the same thing has happened as with my Five Star Movement, which was born of the Internet: the media were taken aback and asked us where we were before. We gathered millions of people in public squares and they marvelled. We became the biggest movement in Italy and journalists and philosophers continued to say that we were benefitting from people's dissatisfaction. ..."
"... the amateurs are the ones conquering the world and I'm rejoicing in it because the professionals are the ones who have reduced the world to this state. Hillary Clinton, Obama and all the rest have destroyed democracy and their international policies. ..."
"... If that's the case, it signifies that the experts, economists and intellectuals have completely misunderstood everything, especially if the situation is the way it is ..."
"... Brexit and Trump are signs of a huge change. If we manage to understand that, we'll also get to face it." ..."
"... Until now, these anti-establishment movements have come face-to-face with their own limits: as soon as they come to power they seem to lose their capabilities and reason for being. Alexis Tsipras, in Greece, for example ..."
"... President Juncker suggested modifying the code of ethics and lengthening the period of abstinence from any private work for former Commission members to three years. Is that enough? ..."
"... I have serious doubts about a potential change in the code of ethics being made by a former minister of a tax haven. ..."
"... We've always maintained this idea of total autonomy in decision-making, but we united over the common idea of a different Europe, a mosaic of autonomies and sovereignties. ..."
"... If he wants to hold a referendum on the euro, he'll have our support. If he wants to leave the Fiscal Stability Treaty the so-called Fiscal Compact which was one of our battles, we'll be there ..."
"... Renzi's negotiating power will also depend on the outcome of the constitutional referendum in December. We'll see whether he sinks or swims. ..."
"... Neoliberal Trojan Horse Obama has quite a global legacy. ..."
"... Maybe it's time for the Europeans to stop sucking American cock. Note that we barely follow your elections. It's time to spread your wings and fly. ..."
"... "The Experts* Destroyed The World" - Beppe Grillo. Never a truer word spoken, Beppe! YOU DA MAN!!! And these "Experts" - these self-described "ELITE" - did so - and are STILL doing so WITH MALICIOUS INTENT - and lining their pockets every fking step of the way! ..."
"... As the Jason Statham character says in that great Guy Richie movie "Revolver": "If there's ONE thing I've learnt about "Experts", it's that they're expert in FUCK ALL!" ..."
"... Apart from asset-stripping the economy & robbing the populace blind that is - and giving their countries away to the invader so indigenous populations cant fight back... or PURPOSELY angling for WW3 to hide their criminality behind the ULTIMATE & FINAL smokescreen. ..."
"... It NATO collapses so will the Euro project. The project was always American from the start. In recent years it has become a mechanism by which the Poles (and other assorted Eastern Europeans) can extract war guarantees out of the USA, UK and France. It is a total mess and people like Grillo add to the confusion by their flawed analysis. ..."
Whatever the reason, we agree with the next point he makes, namely the overthrow of "experts" by
amateurs.
euronews: "Do you think appealing to people's emotions is enough to get elected?
Is that a political project?"
Beppe Grillo: "This information never ceases to make the rounds: you don't
have a political project, you're not capable, you're imbeciles, amateurs And yet, the
amateurs are the ones conquering the world and I'm rejoicing in it because the professionals are
the ones who have reduced the world to this state. Hillary Clinton, Obama and all the rest have
destroyed democracy and their international policies. If that's the case, it signifies
that the experts, economists and intellectuals have completely misunderstood everything, especially
if the situation is the way it is. If the EU is what we have today, it means the European
dream has evaporated. Brexit and Trump are signs of a huge change. If we manage to understand
that, we'll also get to face it."
Bingo, or as Nassim Taleb put its, the "Intellectual-Yet-Idiot"
class. It is the elimination of these so-called "experts", most of whom have PhDs or other letters
next to their name to cover their insecurity, and who drown every possible medium with their endless,
hollow, and constantly wrong chatter, desperate to create a self-congratulatory echo
chamber in which their errors are diluted with the errors of their "expert" peers,
that will be the biggest challenge for the world as it seeks to break away from the legacy of a fake
"expert class" which has brought the entire world to its knees, and has unleashed the biggest political
tsunami in modern history.
One thing is certain: the "experts" won't go quietly as the "amateurs" try to retake what is rightfully
theirs.
... ... ...
Beppe Grillo, Leader of the Five Star Movement
"It's an extraordinary turning point. This corn cob we can also call Trump that in a nice way
doesn't have particularly outstanding qualities. He was such a target for the media, with such terrifying
accusations of sexism and racism, as well as being harassed by the establishment such as the New
York Times but, in the end, he won.
"That is a symbol of the tragedy and the apocalypse of traditional information. The television
and newspapers are always late and they relay old information. They no longer anticipate anything
and they're only just understanding that idiots, the disadvantaged, those who are marginalised
and there are millions of them use alternative media, such as the Internet, which passes under
the radar of television, a medium people no longer use.
"With Trump, exactly the same thing has happened as with my Five Star Movement, which was
born of the Internet: the media were taken aback and asked us where we were before. We gathered millions
of people in public squares and they marvelled. We became the biggest movement in Italy and journalists
and philosophers continued to say that we were benefitting from people's dissatisfaction. We'll
get into government and they'll ask themselves how we did it."
euronews
"There is a gap between giving populist speeches and governing a nation."
Beppe Grillo
"We want to govern, but we don't want to simply change the power by replacing it with our own. We
want a change within civilisation, a change of world vision.
"We're talking about dematerialised industry, an end to working for money, the start of working
for other payment, a universal citizens revenue. If our society is founded on work, what will happen
if work disappears? What will we do with millions of people in flux? We have to organise and manage
all that."
euronews
"Do you think appealing to people's emotions is enough to get elected? Is that a political project?"
Beppe Grillo
"This information never ceases to make the rounds: you don't have a political project, you're
not capable, you're imbeciles, amateurs
"And yet, the amateurs are the ones conquering the world and I'm rejoicing in it because the
professionals are the ones who have reduced the world to this state. Hillary Clinton, Obama and all
the rest have destroyed democracy and their international policies.
"If that's the case, it signifies that the experts, economists and intellectuals have completely
misunderstood everything, especially if the situation is the way it is. If the EU is what we
have today, it means the European dream has evaporated. Brexit and Trump are signs of a huge
change. If we manage to understand that, we'll also get to face it."
euronews
"Until now, these anti-establishment movements have come face-to-face with their own limits:
as soon as they come to power they seem to lose their capabilities and reason for being. Alexis Tsipras,
in Greece, for example "
Beppe Grillo
"Yes, I agree."
euronews
"Let's take the example of Podemos in Spain. They came within reach of power, then had to backtrack.
Why?"
Beppe Grillo
"Because there's an outdated way of thinking. Because they think power is managed by forming coalitions
or by making agreements with others.
"From our side, we want to give the tools to the citizens. We have an information system called
Rousseau, to which every Italian citizen can subscribe for free. There they can vote in regional
and local elections and check what their local MPs are proposing. Absolutely any citizen can even
suggest laws in their own name.
"This is something never before directly seen in democracy and neither Tsipras nor Podemos have
done it."
euronews
"You said that you're not interested in breaking up the European Union, but rather in profoundly
changing it. What can a small group of MEPs do to put into motion such great change?"
Beppe Grillo
"The little group of MEPs is making its voice heard, but there are complications In parliament,
there are lobby groups and commissions. Parliament decides, but at the same time doesn't decide.
"We do what we can, in line with our vision of a world based on a circular economy. We put forward
the idea of a circular economy as the energy of the future and the proposal has been adopted by the
European parliament."
euronews
"One hot topic at the Commission at the moment is the problem of the conflicts of interest concerning
certain politicians.
"President Juncker suggested modifying the code of ethics and lengthening the period of abstinence
from any private work for former Commission members to three years. Is that enough?"
Beppe Grillo
"I have serious doubts about a potential change in the code of ethics being made by a former
minister of a tax haven."
euronews
"You don't think the Commission is legitimate?"
Beppe Grillo
"Absolutely not. Particularly because it's a Commission that no one has actually elected. That's
what brought us closer to Nigel Farage: a democracy coming from the people."
euronews "You don't regret being allied with Farage?"
Beppe Grillo
"It was an alliance of convenience, made to give us enough support to enter parliament. We've
always maintained this idea of total autonomy in decision-making, but we united over the common idea
of a different Europe, a mosaic of autonomies and sovereignties.
"I'm not against Europe, but I am against the single currency. Conversely, I am for the idea of
a common currency. The words are important: 'common' and 'single' are two different concepts.
"In any case, the UK has demonstrated something that we in Italy couldn't even dream of: organising
a clear 'yes-no' referendum."
euronews
"That is 'clear' in terms of the result and not its consequences. In reality, the population is torn.
Many people's views have done u-turns."
Beppe Grillo
"Whatever happens, the responsibility returns entirely to the British. They made the decision."
euronews
"Doesn't it bother you that Italy's Prime Minister Matteo Renzi is playing the spoilsport in Europe?
Criticising European institutions was your battle horse and now he is flexing his muscles in Brussels."
Beppe Grillo
"Renzi has to do that. But he's just copying me and in doing so, strengthens the original."
euronews
"Whatever it may be, his position at the head of the government can get him results."
Beppe Grillo
"Very well. If he wants to hold a referendum on the euro, he'll have our support. If he wants
to leave the Fiscal Stability Treaty the so-called Fiscal Compact which was one of our battles,
we'll be there."
euronews
"In the quarrel over the flexibility of public accounts due to the earthquake and immigration, who
are you supporting?"
Beppe Grillo "On that, I share Renzi's position. I have nothing against projects and ideas. I have preconceptions
about him. For me, he is completely undeserving of confidence."
euronews
"Renzi's negotiating power will also depend on the outcome of the constitutional referendum in
December. We'll see whether he sinks or swims."
Beppe Grillo
"It's already lost for him."
euronews
"If he doesn't win, will you ask for early elections?"
Beppe Grillo
"Whatever happens, we want elections because the government as it stands is not legitimate and, as
a consequence, neither are we.
"From this point onwards, the government moves forward simply by approving laws based on how urgent
they are. And 90 percent of laws are approved using this method. So what good will it do to reform
the Senate to make the process quicker?"
euronews
"Can you see yourself at the head of the Italian government?"
Beppe Grillo
"No, no. I was never in the race. Never."
euronews
"So, Beppe Grillo is not even a candidate to become prime minister or to take on another official
role, if one day the Five Star Movement was to win the elections?"
Beppe Grillo
"The time is fast approaching."
euronews
"Really? A projection?"
Beppe Grillo
"People just need to go and vote. We're sure to win."
BabaLooey -> Nemontel Nov 21, 2016 6:27 AM
euronews: "You don't think the Commission is legitimate?"
Beppe Grillo: "Absolutely not. Particularly because it's a Commission that no one has
actually elected. That's what brought us closer to Nigel Farage: a democracy coming from the people."
BOILED DOWN - THAT IS ALL THAT NEEDS TO BE SAID.
Blackhawks Nov 21, 2016 3:15 AM
Neoliberal Trojan Horse Obama has quite a global legacy. People all over the world
are voting for conmen and clowns instead of his endorsed candidates and chosen successor. Having
previously exposed the "intellectual-yet-idiot" class, Nassim Taleb unleashes his acerbic
tone in 3 painfully "real news" tweets on President Obama's legacy...
Obama:
Protected banksters (largest bonus pool in 2010)
"Helped" Libya
Served AlQaeda/SaudiBarbaria(Syria & Yemen) https://t.co/bcNMhDgmuo
Maybe it's time for the Europeans to stop sucking American cock. Note that we barely follow
your elections. It's time to spread your wings and fly.
Yen Cross -> LetThemEatRand Nov 21, 2016 3:27 AM
Amen~ The" European Toadies" should also institute " term limits" so those Jean Paul & Draghi][JUNKERS[]-
technocratic A-Holes can be done away with!
NuYawkFrankie Nov 21, 2016 5:07 AM
"The Experts* Destroyed The World" - Beppe Grillo. Never a truer word spoken, Beppe! YOU
DA MAN!!! And these "Experts" - these self-described "ELITE" - did so - and are STILL doing so
WITH MALICIOUS INTENT - and lining their pockets every fking step of the way!
As the Jason Statham character says in that great Guy Richie movie "Revolver": "If there's
ONE thing I've learnt about "Experts", it's that they're expert in FUCK ALL!"
Apart from asset-stripping the economy & robbing the populace blind that is - and giving
their countries away to the invader so indigenous populations cant fight back... or PURPOSELY
angling for WW3 to hide their criminality behind the ULTIMATE & FINAL smokescreen.
Yep -THAT is how F'KING sick they are. These, my friends, are your "Experts", your self-decribed
"Elite" - and Soros is at the head of the parade.
lakecity55 -> NuYawkFrankie Nov 21, 2016 6:18 AM
You know the old saying, "an expert's a guy from more than 20 miles outside of town."
tuetenueggel Nov 21, 2016 5:17 AM
Which experts do you mean Beppe ?
All I Kow is that those "experts" are too stupid to piss a hole in the snow.
Oettinger ( not even speaking his mother tongue halfways correct )
Jean clown Juncker ( always drunk too is a kind of well structured day )
Schulz capo (who was too stupid as mayor of a german village so they fucked him out)
Hollande ( lefts are always of lower IQ then right wing people )
Blair ( war criminal )
and thousands more not to be named her ( due to little space availlable )
caesium Nov 21, 2016 6:35 AM
It NATO collapses so will the Euro project. The project was always American from the start.
In recent years it has become a mechanism by which the Poles (and other assorted Eastern Europeans)
can extract war guarantees out of the USA, UK and France. It is a total mess and people like Grillo
add to the confusion by their flawed analysis.
The bedrock of Italy was always the Catholic faith which the country has abandoned. "The Faith
is Europe and Europe is the Faith" said Hilaire Belloc. A reality that Grillo is unable to grasp.
"... Put together, these two trends have served the purposes of the highly centralized State and the globalized market that has resulted in an unprecedented concentration of power and wealth. ..."
"... The liberal left and significant portions further left tend to celebrate a negative cultural and sexual liberty while the Liberal right tends to celebrate an economic and political negative liberty. ..."
"... It ends up bringing about exactly the kinds of intolerant [neo]liberalis m(blatantly on display these days) it ascribes to all non-liberal positions. ..."
"The Archdruid report is useful but Greer should read Thomas Frank. Then he will stop conflating
"Left" and "Liberal."
The "Left" as well as the center-left/center-right (Hillary/traditional conservative Republican
crowd) both are strong supporters of a social-cultural liberalism, that since the 1960s has
heavily promoted individual rights and an equality of opportunity for self-expression.
The "Right" since at least the early 1980s( along with the Hillary crowd) has supported
an economic political liberalism that champions "free markets" liberated from the bureaucratic
State.
Put together, these two trends have served the purposes of the highly centralized State
and the globalized market that has resulted in an unprecedented concentration of power and wealth.
The liberal left and significant portions further left tend to celebrate a negative cultural
and sexual liberty while the Liberal right tends to celebrate an economic and political negative
liberty.
The Left's defense of existing negative liberty (and not being willing to think beyond it)
ends up undermining all modes of freedom because it tends to shut down debate about substantive
ends.
It ends up bringing about exactly the kinds of intolerant [neo]liberalis m(blatantly on
display these days) it ascribes to all non-liberal positions.
Is there anyplace for a positive concept of liberty in 2016?
"... For one thing, many vested interests don't want the Democratic party to change. Most of the money it raises ends up in the pockets of political consultants, pollsters, strategists, lawyers, advertising consultants and advertisers themselves, many of whom have become rich off the current arrangement. They naturally want to keep it. ..."
"... For another, the Democratic party apparatus is ingrown and entrenched. Like any old bureaucracy, it only knows how to do what it has done for years. Its state and quadrennial national conventions are opportunities for insiders to meet old friends and for aspiring politicians to make contacts among the rich and powerful. Insiders and the rich aren't going to happily relinquish their power and perquisites, and hand them to outsiders and the non-rich. ..."
"... I have been a Democrat for 50 years I have even served in two Democratic administrations in Washington, including a stint in the cabinet and have run for the Democratic nomination for governor in one state yet I have never voted for the chair or vice-chair of my state Democratic party. That means I, too, have had absolutely no say over who the chair of the Democratic National Committee will be. To tell you the truth, I haven't cared. And that's part of the problem. ..."
"... Finally, the party chairmanship has become a part-time sinecure for politicians on their way up or down, not a full-time position for a professional organizer. In 2011, Tim Kaine (who subsequently became Hillary Clinton's running mate in the 2016 election) left the chairmanship to run, successfully, for the Senate from Virginia. ..."
"... The chair then went to Debbie Wasserman-Schultz, a Florida congresswoman who had co-chaired Clinton's bid for the Democratic nomination for president in 2008. This generated allegations in the 2016 race that the Democratic National Committee was siding with Clinton against Bernie Sanders allegations substantiated by leaks of emails from the DNC. ..."
"... So what we now have is a Democratic party that has been repudiated at the polls, headed by a Democratic National Committee that has become irrelevant at best, run part-time by a series of insider politicians. It has no deep or broad-based grass-roots, no capacity for mobilizing vast numbers of people to take any action other than donate money, no visibility between elections, no ongoing activism. ..."
For one thing, many vested interests don't want the Democratic party to change. Most of the
money it raises ends up in the pockets of political consultants, pollsters, strategists, lawyers,
advertising consultants and advertisers themselves, many of whom have become rich off the current
arrangement. They naturally want to keep it.
For another, the Democratic party apparatus is ingrown and entrenched. Like any old bureaucracy,
it only knows how to do what it has done for years. Its state and quadrennial national conventions
are opportunities for insiders to meet old friends and for aspiring politicians to make contacts
among the rich and powerful. Insiders and the rich aren't going to happily relinquish their power
and perquisites, and hand them to outsiders and the non-rich.
Most Americans who call themselves Democrats never hear from the Democratic party except when
it asks for money, typically through mass mailings and recorded telephone calls in the months leading
up to an election. The vast majority of Democrats don't know the name of the chair of the Democratic
National Committee or of their state committee. Almost no registered
Democrats have any idea
how to go about electing their state Democratic chair or vice-chair, and, hence, almost none have
any influence over whom the next chair of the Democratic National Committee may be.
I have been a Democrat for 50 years I have even served in two Democratic administrations
in Washington, including a stint in the cabinet and have run for the Democratic nomination for governor
in one state yet I have never voted for the chair or vice-chair of my state Democratic party. That
means I, too, have had absolutely no say over who the chair of the Democratic National Committee
will be. To tell you the truth, I haven't cared. And that's part of the problem.
Nor, for that matter, has Barack Obama cared. He basically ignored the Democratic National Committee
during his presidency, starting his own organization called Organizing for America. It was originally
intended to marshal grass-roots support for the major initiatives he sought to achieve during his
presidency, but morphed into a fund-raising machine of its own.
Finally, the party chairmanship has become a part-time sinecure for politicians on their way
up or down, not a full-time position for a professional organizer. In 2011, Tim Kaine (who subsequently
became Hillary Clinton's running mate in the 2016 election) left the chairmanship to run, successfully,
for the Senate from Virginia.
The chair then went to Debbie Wasserman-Schultz, a Florida congresswoman who had co-chaired
Clinton's bid for the Democratic nomination for president in 2008. This generated allegations in
the 2016 race that the Democratic National Committee was siding with Clinton against Bernie Sanders
allegations substantiated by leaks of emails from the DNC.
So what we now have is a Democratic party that has been repudiated at the polls, headed by
a Democratic National Committee that has become irrelevant at best, run part-time by a series of
insider politicians. It has no deep or broad-based grass-roots, no capacity for mobilizing vast numbers
of people to take any action other than donate money, no visibility between elections, no ongoing
activism.
The Republican brass degenerated into a bunch to neocon racketeers who want to impoverish regular Americans. That's why Trump won.
Notable quotes:
"... Indeed, in an October 1991 letter to Patrick J. Buchanan, Regnery claimed that Americans had been hornswoggled into supporting
the war by "the President and those who form public opinion." ..."
"... Everywhere he looked, the media-newspapers, network radio and television news, magazines, and journals-all seemed locked in
a [neo]liberal consensus. . . . If conservatives were going to claw their way back in from the outside, they were going to need to first
find a way to impair and offset liberals in the media. ..."
IN DECEMBER 1953, Henry Regnery convened a meeting in Room 2233 in New York City's Lincoln Building. Regnery, a former Democrat
and head of Regnery Publishing, had moved sharply to the Right after he became disillusioned with the New Deal. His guests included
William F. Buckley Jr.; Frank Hanighen, a cofounder of Human Events ; Raymond Moley, a former FDR adviser who wrote a book
called After Seven Years that denounced the New Deal; and John Chamberlain, a lapsed liberal and an editorial writer for the
Wall Street Journal . Regnery had not called these men together merely to discuss current events. He wanted to reshape them.
"The side we represent controls most of the wealth in this country," he said. "The ideas and traditions we believe in are those which
most Americans instinctively believe in also." So why was liberalism in the ascendant? Regnery explained that media bias was the
problem. Anywhere you looked, the Left controlled the commanding heights-television, newspapers and universities. It was imperative,
Regnery said, to establish a "counterintelligence unit" that could fight back.
In her superb Messengers of the Right , Nicole Hemmer examines the origins of conservative media. Hemmer, who is an assistant
professor at the University of Virginia, has performed extensive archival research to illuminate the furthest recesses of the Right,
complementing earlier works like Geoffrey Kabaservice's Rule and Ruin . She provides much new information and penetrating
observations about figures such as Clarence Manion, William Rusher and Henry Regnery. Above all, she shows that there has been a
remarkable consistency to the grievances and positions, which were often one and the same, of the conservative movement over the
decades.
According to Hemmer, the modern Right first took shape in the form of the America First Committee. A number of leading conservatives
saw little difference between Adolf Hitler and Franklin D. Roosevelt. Regnery recollected that "both Hitler and Roosevelt-each in
his own way -- were masters of the art of manipulating the masses."
Indeed, in an October 1991 letter to Patrick J. Buchanan, Regnery claimed that Americans had been hornswoggled into supporting
the war by "the President and those who form public opinion." Others such as the gifted orator Clarence Manion, a former FDR
acolyte, joined the America First Committee in 1941. After the war, Manion became the dean of the Notre Dame Law School and wrote
a book called The Key to Peace , which argued that limited government was the key to American greatness, not a quest to "take
off for the Mountains of the Moon in search of ways and means to pacify and unify mankind."
While serving in the Eisenhower administration, he also became a proponent of the Bricker Amendment, which would have subjected
treaties signed by the president to ratification by the states. Eisenhower demanded his resignation. An embittered Manion, Hemmer
writes, concluded that columnists such as James Reston, Marquis Childs, and Joseph and Stewart Alsop had effectively operated as
a united front to ruin him.
Everywhere he looked, the media-newspapers, network radio and television news, magazines, and journals-all seemed locked in
a [neo]liberal consensus. . . . If conservatives were going to claw their way back in from the outside, they were going to need to first
find a way to impair and offset liberals in the media.
In 1954, the Manion Forum of Opinion , which aired on several dozen radio stations, was born. It soon became a popular
venue that allowed Manion, who was cochair of a political party called For America, to inveigh against the depredations of liberalism
and preach the conservative gospel.
... ... ...
With the election of Ronald Reagan in 1980, the conservative media seemed to have arrived. But as Hemmer notes, a New Right generation
of activists that included figures such Terry Dolan of the National Conservative Political Action Committee and Jerry Falwell of
the Moral Majority had arrived that did not have much in common with the older conservative generation. She points out that leaders
of the New Right backed Republican congressman Phil Crane, then former Texas governor John Connally, only supporting Reagan during
the general election. Buckley and his cohort, Hemmer writes, saw the New Right paladins as "Johnnies-come-lately to the movement,
demanding rigorous fealty to social issues that had only recently become the drivers of politics." Hemmer might have noted that,
although Reagan has since become a conservative icon, George F. Will and Norman Podhoretz, among others, lamented what they viewed
as Reagan's concessive posture towards Mikhail Gorbachev.
Jacob Heilbrunn is editor of the National Interest.
The Republican brass degenerated into a bunch to neocon racketeers who want to impoverish regular Americans. That's why Trump won.
Notable quotes:
"... Indeed, in an October 1991 letter to Patrick J. Buchanan, Regnery claimed that Americans had been hornswoggled into supporting
the war by "the President and those who form public opinion." ..."
"... Everywhere he looked, the media-newspapers, network radio and television news, magazines, and journals-all seemed locked in
a [neo]liberal consensus. . . . If conservatives were going to claw their way back in from the outside, they were going to need to first
find a way to impair and offset liberals in the media. ..."
IN DECEMBER 1953, Henry Regnery convened a meeting in Room 2233 in New York City's Lincoln Building. Regnery, a former Democrat
and head of Regnery Publishing, had moved sharply to the Right after he became disillusioned with the New Deal. His guests included
William F. Buckley Jr.; Frank Hanighen, a cofounder of Human Events ; Raymond Moley, a former FDR adviser who wrote a book
called After Seven Years that denounced the New Deal; and John Chamberlain, a lapsed liberal and an editorial writer for the
Wall Street Journal . Regnery had not called these men together merely to discuss current events. He wanted to reshape them.
"The side we represent controls most of the wealth in this country," he said. "The ideas and traditions we believe in are those which
most Americans instinctively believe in also." So why was liberalism in the ascendant? Regnery explained that media bias was the
problem. Anywhere you looked, the Left controlled the commanding heights-television, newspapers and universities. It was imperative,
Regnery said, to establish a "counterintelligence unit" that could fight back.
In her superb Messengers of the Right , Nicole Hemmer examines the origins of conservative media. Hemmer, who is an assistant
professor at the University of Virginia, has performed extensive archival research to illuminate the furthest recesses of the Right,
complementing earlier works like Geoffrey Kabaservice's Rule and Ruin . She provides much new information and penetrating
observations about figures such as Clarence Manion, William Rusher and Henry Regnery. Above all, she shows that there has been a
remarkable consistency to the grievances and positions, which were often one and the same, of the conservative movement over the
decades.
According to Hemmer, the modern Right first took shape in the form of the America First Committee. A number of leading conservatives
saw little difference between Adolf Hitler and Franklin D. Roosevelt. Regnery recollected that "both Hitler and Roosevelt-each in
his own way -- were masters of the art of manipulating the masses."
Indeed, in an October 1991 letter to Patrick J. Buchanan, Regnery claimed that Americans had been hornswoggled into supporting
the war by "the President and those who form public opinion." Others such as the gifted orator Clarence Manion, a former FDR
acolyte, joined the America First Committee in 1941. After the war, Manion became the dean of the Notre Dame Law School and wrote
a book called The Key to Peace , which argued that limited government was the key to American greatness, not a quest to "take
off for the Mountains of the Moon in search of ways and means to pacify and unify mankind."
While serving in the Eisenhower administration, he also became a proponent of the Bricker Amendment, which would have subjected
treaties signed by the president to ratification by the states. Eisenhower demanded his resignation. An embittered Manion, Hemmer
writes, concluded that columnists such as James Reston, Marquis Childs, and Joseph and Stewart Alsop had effectively operated as
a united front to ruin him.
Everywhere he looked, the media-newspapers, network radio and television news, magazines, and journals-all seemed locked in
a [neo]liberal consensus. . . . If conservatives were going to claw their way back in from the outside, they were going to need to first
find a way to impair and offset liberals in the media.
In 1954, the Manion Forum of Opinion , which aired on several dozen radio stations, was born. It soon became a popular
venue that allowed Manion, who was cochair of a political party called For America, to inveigh against the depredations of liberalism
and preach the conservative gospel.
... ... ...
With the election of Ronald Reagan in 1980, the conservative media seemed to have arrived. But as Hemmer notes, a New Right generation
of activists that included figures such Terry Dolan of the National Conservative Political Action Committee and Jerry Falwell of
the Moral Majority had arrived that did not have much in common with the older conservative generation. She points out that leaders
of the New Right backed Republican congressman Phil Crane, then former Texas governor John Connally, only supporting Reagan during
the general election. Buckley and his cohort, Hemmer writes, saw the New Right paladins as "Johnnies-come-lately to the movement,
demanding rigorous fealty to social issues that had only recently become the drivers of politics." Hemmer might have noted that,
although Reagan has since become a conservative icon, George F. Will and Norman Podhoretz, among others, lamented what they viewed
as Reagan's concessive posture towards Mikhail Gorbachev.
Jacob Heilbrunn is editor of the National Interest.
It is the end of neoliberalism and the start of the era of authoritarian nationalism, and we all
need to come together to stamp out the authoritarian part.
Notable quotes:
"... Neoliberalism has been disastrous for the Rust Belt, and I think we need to envision a new future for what was once the country's industrial heartland, now little more than its wasteland ..."
"... The question of what the many millions of often-unionized factory workers, SMEs which supplied them, family farmers (now fully industrialized and owned by corporations), and all those in secondary production and services who once supported them are to actually do in future to earn a decent living is what I believe should really be the subject of debate. ..."
"... two factors (or three, I guess) have contributed to this state of despair: offshoring and outsourcing, and technology. ..."
"... Medicaid, the CHIP program, the SNAP program and others (including NGOs and private charitable giving) may alleviate some of the suffering, but there is currently no substitute for jobs that would enable men and women to live lives of dignity a decent place to live, good educations for their children, and a reasonable, secure pension in old age. Near-, at-, and below-minimum wage jobs devoid of any benefits don't allow any of these at most, they make possible a subsistence life, one which requires continued reliance on public assistance throughout one's lifetime. ..."
"... In the U.S. (a neoliberal pioneer), poverty is closely linked with inequality and thus, a high GINI coefficient (near that of Turkey); where there is both poverty and a very unequal distribution of resources, this inevitably affects women (and children) and racial (and ethnic) minorities disproportionately. The economic system, racism, sexism, and xenophobia are not separate, stand-alone issues; they are profoundly intertwined. ..."
"... But really, if you think about it, slavery was defined as ownership, ownership of human capital (which was convertible into cash), and women in many societies throughout history were acquired as part of a financial transaction (either through purchase or through sale), and control of their capital (land, property [farmland, herds], valuables and later, money) often entrusted to a spouse or male guardian. All of these practices were economically-driven, even if the driver wasn't 21st-century capitalism. ..."
"... Let it be said at once: Trump's victory is primarily due to the explosion in economic and geographic inequality in the United States over several decades and the inability of successive governments to deal with this. ..."
"... Both the Clinton and the Obama administrations frequently went along with the market liberalization launched under Reagan and both Bush presidencies. At times they even outdid them: the financial and commercial deregulation carried out under Clinton is an example. What sealed the deal, though, was the suspicion that the Democrats were too close to Wall Street and the inability of the Democratic media elite to learn the lessons from the Sanders vote. ..."
"... Regional inequality and globalization are the principal drivers in Japanese politics, too, along with a number of social drivers. ..."
"... The tsunami/nuclear meltdown combined with the Japanese government's uneven response is an apt metaphor for the impact of neo-liberalism/globalization on Japan; and on the US. I then explained that the income inequality in the US was far more severe than that of Japan and that many Americans did not support the export of jobs to China/Mexico. ..."
"... I contend that in some hypothetical universe the DNC and corrupt Clinton machine could have been torn out, root and branch, within months. As I noted, however, the decision to run HRC effectively unopposed was made several years, at least, before the stark evidence of the consequences of such a decision appeared in sharp relief with Brexit. ..."
"... Just as the decline of Virginia coal is due to global forces and corporate stupidity, so the decline of the rust belt is due to long (30 year plus) global forces and corporate decisions that predate the emergence of identity politics. ..."
"... It's interesting that the clear headed thinkers of the Marxist left, who pride themselves on not being distracted by identity, don't want to talk about these factors when discussing the plight of their cherished white working class. ..."
"... The construction 'white working class' is a useful governing tool that splits poor people and possible coalitions against the violence of capital. Now, discussion focuses on how some of the least powerful, most vulnerable people in the United States are the perpetrators of a great injustice against racialised and minoritised groups. Such commentary colludes in the pathologisation of the working class, of poor people. Victims are inculpated as the vectors of noxious, atavistic vices while the perpetrators get off with impunity, showing off their multihued, cosmopolitan C-suites and even proposing that their free trade agreements are a form of anti-racist solidarity. Most crucially, such analysis ignores the continuities between a Trumpian dystopia and our satisfactory present. ..."
"... Race-thinking forecloses the possibility of the coalitions that you imagine, and reproduces ideas of difference in ways that always, always privilege 'whiteness'. ..."
"... Historical examples of ethnic groups becoming 'white', how it was legal and political decision-making that defined the present racial taxonomy, suggest that groups can also lose or have their 'whiteness' threatened. CB has written here about how, in the UK at least, Eastern and Southern Europeans are racialised, and so refused 'whiteness'. JQ has written about southern white minoritisation. Many commentators have pointed that the 'white working class' vote this year looked a lot like a minority vote. ..."
"... Given the subordination of groups presently defined as 'white working class', I wonder if we could think beyond ethnic and epidermal definition to consider that the impossibility of the American Dream refuses these groups whiteness; i.e the hoped for privileges of racial superiority, much in the same way that African Americans, Latin Americans and other racialised minorities are denied whiteness. Can a poor West Virginian living in a toxified drugged out impoverished landscape really be defined as a carrier of 'white privilege'? ..."
"... I was first pointed at this by the juxtapositions of racialised working class and immigrants in Imogen Tyler's Revolting Subjects Social Abjection and Resistance in Neoliberal Britain but this below is a useful short article that takes a historical perspective. ..."
"... In a 1990 essay, the late Yale political scientist Juan Linz observed that "aside from the United States, only Chile has managed a century and a half of relatively undisturbed constitutional continuity under presidential government - but Chilean democracy broke down in the 1970s." ..."
"... Linz offered several reasons why presidential systems are so prone to crisis. One particularly important one is the nature of the checks and balances system. Since both the president and the Congress are directly elected by the people, they can both claim to speak for the people. When they have a serious disagreement, according to Linz, "there is no democratic principle on the basis of which it can be resolved." The constitution offers no help in these cases, he wrote: "the mechanisms the constitution might provide are likely to prove too complicated and aridly legalistic to be of much force in the eyes of the electorate." ..."
"... In a parliamentary system, deadlocks get resolved. A prime minister who lacks the backing of a parliamentary majority is replaced by a new one who has it. If no such majority can be found, a new election is held and the new parliament picks a leader. It can get a little messy for a period of weeks, but there's simply no possibility of a years-long spell in which the legislative and executive branches glare at each other unproductively.' ..."
"... In any case, as I pointed out before, given that the US is increasingly an urbanised country, and the Electoral College was created to protect rural (slave) states, the grotesque electoral result we have just seen is likely to recur, which means more and more Presidents with dubious democratic legitimacy. Thanks to Bush (and Obama) these Presidents will have, at the same time, more and more power. ..."
"... To return to my original question and answer it myself: I'm forced to conclude that the Democrats did not specifically address the revitalization rebirth of the Rust Belt in their 2016 platform. Its failure to do so carried a heavy cost that (nearly) all of us will be forced to pay. ..."
"... This sub seems to have largely fallen into the psychologically comfortable trap of declaring that everyone who voted against their preferred candidate is racist. It's a view pushed by the neoliberals, who want to maintain he stranglehold of identity politics over the DNC, and it makes upper-class 'intellectuals' feel better about themselves and their betrayal of the filthy, subhuman white underclass (or so they see it). ..."
"... You can scream 'those jobs are never coming back!' all you want, but people are never going to accept it. So either you come up with a genuine solution (instead of simply complaining that your opponents solutions won't work; you're partisan and biased, most voters won't believe you), you may as well resign yourself to fascism. Because whining that you don't know what to do won't stop people from lining up behind someone who says that they do have one, whether it'll work or not. Nobody trusts the elite enough to believe them when they say that jobs are never coming back. Nobody trusts the elite at all. ..."
"... You sound just like the Wiemar elite. No will to solve the problem, but filled with terror at the inevitable result of failing to solve the problem. ..."
"... One brutal fact tells us everything we need to know about the Democratic party in 2016: the American Nazi party is running on a platform of free health care to working class people. This means that the American Nazi Party is now running to the left of the Democratic party. ..."
"... Back in the 1930s, when the economy collapsed, fascists appeared and took power. Racists also came out of the woodwork, ditto misogynists. Fast forward 80 years, and the same thing has happened all over again. The global economy melted down in 2008 and fascists appeared promising to fix the problems that the pols in power wouldn't because they were too closely tied to the existing (failed) system. Along with the fascists, racists gained power because they were able to scapegoat minorities as the alleged cause of everyone's misery. ..."
"... None of this is surprising. We have seen it before. Whenever you get a depression in a modern industrial economy, you get scapegoating, racism, and fascists. We know what to do. The problem is that the current Democratic party isn't doing it. ..."
"... . It is the end of neoliberalism and the start of the era of authoritarian nationalism, and we all need to come together to stamp out the authoritarian part. ..."
"... This hammered people on the bottom, disproportionately African Americans and especially single AA mothers in America. It crushed the blue collar workers. It is wiping out the savings and careers of college-educated white collar workers now, at least, the ones who didn't go to the Ivy League, which is 90% of them. ..."
"... Calling Hillary an "imperfect candidate" is like calling what happened to the Titanic a "boating accident." Trump was an imperfect candidate. Why did he win? ..."
"... "The neoliberal era in the United States ended with a neofascist bang. The political triumph of Donald Trump shattered the establishments in the Democratic and Republican parties both wedded to the rule of Big Money and to the reign of meretricious politicians." ..."
"... "It is not an exaggeration to say that the Democratic Party is in shambles as a political force. Not only did it just lose the White House to a wildly unpopular farce of a candidate despite a virtually unified establishment behind it, and not only is it the minority party in both the Senate and the House, but it is getting crushed at historical record rates on the state and local levels as well. Surveying this wreckage last week, party stalwart Matthew Yglesias of Vox minced no words: `the Obama years have created a Democratic Party that's essentially a smoking pile of rubble.' ..."
"... "One would assume that the operatives and loyalists of such a weak, defeated and wrecked political party would be eager to engage in some introspection and self-critique, and to produce a frank accounting of what they did wrong so as to alter their plight. In the case of 2016 Democrats, one would be quite mistaken." ..."
"... Foreign Affairs ..."
"... "At the end of World War II, the United States and its allies decided that sustained mass unemployment was an existential threat to capitalism and had to be avoided at all costs. In response, governments everywhere targeted full employment as the master policy variable-trying to get to, and sustain, an unemployment rate of roughly four percent. The problem with doing so, over time, is that targeting any variable long enough undermines the value of the variable itself-a phenomenon known as Goodhart's law. (..) ..."
"... " what we see [today] is a reversal of power between creditors and debtors as the anti-inflationary regime of the past 30 years undermines itself-what we might call "Goodhart's revenge." In this world, yields compress and creditors fret about their earnings, demanding repayment of debt at all costs. Macro-economically, this makes the situation worse: the debtors can't pay-but politically, and this is crucial-it empowers debtors since they can't pay, won't pay, and still have the right to vote. ..."
"... "The traditional parties of the center-left and center-right, the builders of this anti-inflationary order, get clobbered in such a world, since they are correctly identified by these debtors as the political backers of those demanding repayment in an already unequal system, and all from those with the least assets. This produces anti-creditor, pro-debtor coalitions-in-waiting that are ripe for the picking by insurgents of the left and the right, which is exactly what has happened. ..."
"... "The global revolt against elites is not just driven by revulsion and loss and racism. It's also driven by the global economy itself. This is a global phenomenon that marks one thing above all. The era of neoliberalism is over. The era of neonationalism has just begun." ..."
"... They want what their families have had which is secure, paid, benefits rich, blue collar work. ..."
"... trump's campaign empathized with that feeling just by focusing on the factory jobs as jobs and not as anachronisms that are slowly fading away for whatever reason. Clinton might have been "correct", but these voters didn't want to hear "the truth". And as much as you can complain about how stupid they are for wanting to be lied to, that is the unfortunate reality you, and the Democratic party, have to accept. ..."
"... trump was offering a "bailout" writ large. Clinton had no (good) counteroffer. It was like the tables were turned. Romney was the one talking about "change" and "restructuring" while Obama was defending keeping what was already there. ..."
"... "Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check." http://www.nytimes.com/2008/11/19/opinion/19romney.html ..."
"... Clinton toward the end offered tariffs. But the trump campaign hit back with what turned out to be a pretty strong counter attack ""How's she going to get tough on China?" said Trump economic advisor Peter Navarro on CNN's Quest Means Business. He notes that some of Clinton's economic advisors have supported TPP or even worked on it. "" ..."
The question is no longer her neoliberalism, but yours. Keep it or throw it away?
I wish this issue was being seriously discussed. Neoliberalism has been disastrous for
the Rust Belt, and I think we need to envision a new future for what was once the country's industrial
heartland, now little more than its wasteland (cf. "flyover zone" a pejorative term which
inhabitants of the zone are not too stupid to understand perfectly, btw).
The question of what the many millions of often-unionized factory workers, SMEs which supplied
them, family farmers (now fully industrialized and owned by corporations), and all those in secondary
production and services who once supported them are to actually do in future to earn a decent
living is what I believe should really be the subject of debate.
As noted upthread, two factors (or three, I guess) have contributed to this state of despair:
offshoring and outsourcing, and technology. The jobs that have been lost will not return,
and indeed will be lost in ever greater numbers just consider what will happen to the trucking
sector when self-driving trucks hit the roads sometime in the next 10-20 years (3.5 million truckers;
8.7 in allied jobs).
Medicaid, the CHIP program, the SNAP program and others (including NGOs and private charitable
giving) may alleviate some of the suffering, but there is currently no substitute for jobs that
would enable men and women to live lives of dignity a decent place to live, good educations
for their children, and a reasonable, secure pension in old age. Near-, at-, and below-minimum
wage jobs devoid of any benefits don't allow any of these at most, they make possible a subsistence
life, one which requires continued reliance on public assistance throughout one's lifetime.
In the U.S. (a neoliberal pioneer), poverty is closely linked with inequality and thus,
a high GINI coefficient (near that of Turkey); where there is both poverty and a very unequal
distribution of resources, this inevitably affects women (and children) and racial (and ethnic)
minorities disproportionately. The economic system, racism, sexism, and xenophobia are not separate,
stand-alone issues; they are profoundly intertwined.
I appreciate and espouse the goals of identity politics in all their multiplicity, and also
understand that the institutions of slavery and sexism predated modern capitalist economies.
But really, if you think about it, slavery was defined as ownership, ownership of human capital
(which was convertible into cash), and women in many societies throughout history were acquired
as part of a financial transaction (either through purchase or through sale), and control of their
capital (land, property [farmland, herds], valuables and later, money) often entrusted to a spouse
or male guardian. All of these practices were economically-driven, even if the driver wasn't 21st-century
capitalism.
Also: Faustusnotes@100
For example Indiana took the ACA Medicaid expansion but did so with additional conditions that
make it worse than in neighboring states run by democratic governors.
And what states would those be? IL, IA, MI, OH, WI, KY, and TN have Republican governors. Were
you thinking pre-2014? pre-2012?
To conclude and return to my original point: what's to become of the Rust Belt in future? Did
the Democratic platform include a New New Deal for PA, OH, MI, WI, and IA (to name only the five
Rust Belt states Trump flipped)?
" Let it be said at once: Trump's victory is primarily due to the explosion in economic
and geographic inequality in the United States over several decades and the inability of successive
governments to deal with this.
Both the Clinton and the Obama administrations frequently went along with the market liberalization
launched under Reagan and both Bush presidencies. At times they even outdid them: the financial
and commercial deregulation carried out under Clinton is an example. What sealed the deal, though,
was the suspicion that the Democrats were too close to Wall Street and the inability of the
Democratic media elite to learn the lessons from the Sanders vote. "
What should have been one comment came out as 4, so apologies on that front.
I spent the last week explaining the US election to my students in Japan in pretty much the
terms outlined by Lilla and PIketty, so I was delighted to discover these two articles.
Regional inequality and globalization are the principal drivers in Japanese politics, too,
along with a number of social drivers. It was therefore very easy to call for a show of hands
to identify students studying here in Tokyo who are trying to decide whether or not to return
to areas such as Tohoku to build their lives; or remain in Kanto/Tokyo the NY/Washington/LA
of Japan put crudely.
I asked students from regions close to Tohoku how they might feel if the Japanese prime minister
decided not to visit the region following Fukushima after the disaster, or preceding an election.
The tsunami/nuclear meltdown combined with the Japanese government's uneven response is an
apt metaphor for the impact of neo-liberalism/globalization on Japan; and on the US. I then explained
that the income inequality in the US was far more severe than that of Japan and that many Americans
did not support the export of jobs to China/Mexico.
I then asked the students, particularly those from outlying regions whether they believe Japan
needed a leader who would 'bring back Japanese jobs' from Viet Nam and China, etc. Many/most agreed
wholeheartedly. I then asked whether they believed Tokyo people treated those outside Kanto as
'inferiors.' Many do.
Piketty may be right regarding Trump's long-term effects on income inequality. He is wrong,
I suggest, to argue that Democrats failed to respond to Sanders' support. I contend that in
some hypothetical universe the DNC and corrupt Clinton machine could have been torn out, root
and branch, within months. As I noted, however, the decision to run HRC effectively unopposed
was made several years, at least, before the stark evidence of the consequences of such a decision
appeared in sharp relief with Brexit.
Also worth noting is that the rust belts problems are as old as Reagan even the term dates
from the 80s, the issue is so uncool that there is a dire straits song about it. Some portion
of the decline of manufacturing there is due to manufacturers shifting to the south, where the
anti Union states have an advantage. Also there has been new investment there were no Japanese
car companies in the us in the 1980s, so they are new job creators, yet insufficient to make up
the losses. Just as the decline of Virginia coal is due to global forces and corporate stupidity,
so the decline of the rust belt is due to long (30 year plus) global forces and corporate decisions
that predate the emergence of identity politics.
It's interesting that the clear headed thinkers of the Marxist left, who pride themselves
on not being distracted by identity, don't want to talk about these factors when discussing the
plight of their cherished white working class. Suddenly it's not the forces of capital and
the objective facts of history, but a bunch of whiny black trannies demanding safe spaces and
protesting police violence, that drove those towns to ruin.
And what solutions do they think the dems should have proposed? It can't be welfare, since
we got the ACA (watered down by representatives of the rust belt states). Is it, seriously, tariffs?
Short of going to an election promising w revolution, what should the dems have done? Give us
a clear answer so we can see what the alternative to identity politics is.
basil 11.19.16 at 5:11 am
Did this go through?
Thinking with WLGR @15, Yan @81, engels variously above,
The construction 'white working class' is a useful governing tool that splits poor people
and possible coalitions against the violence of capital. Now, discussion focuses on how some of
the least powerful, most vulnerable people in the United States are the perpetrators of a great
injustice against racialised and minoritised groups. Such commentary colludes in the pathologisation
of the working class, of poor people. Victims are inculpated as the vectors of noxious, atavistic
vices while the perpetrators get off with impunity, showing off their multihued, cosmopolitan
C-suites and even proposing that their free trade agreements are a form of anti-racist solidarity.
Most crucially, such analysis ignores the continuities between a Trumpian dystopia and our satisfactory
present.
I get that the tropes around race are easy, and super-available. Privilege confessing is very
in vogue as a prophylactic against charges of racism. But does it threaten the structures that
produce this abjection either as embittered, immiserated 'white working class' or as threatened
minority group? It is always *those* 'white' people, the South, the Working Class, and never the
accusers some of whom are themselves happy to vote for a party that drowns out anti-war protesters
with chants of USA! USA!
Race-thinking forecloses the possibility of the coalitions that you imagine, and reproduces
ideas of difference in ways that always, always privilege 'whiteness'.
--
Historical examples of ethnic groups becoming 'white', how it was legal and political decision-making
that defined the present racial taxonomy, suggest that groups can also lose or have their 'whiteness'
threatened. CB has written here about how, in the UK at least, Eastern and Southern Europeans
are racialised, and so refused 'whiteness'. JQ has written about southern white minoritisation.
Many commentators have pointed that the 'white working class' vote this year looked a lot like
a minority vote.
Given the subordination of groups presently defined as 'white working class', I wonder
if we could think beyond ethnic and epidermal definition to consider that the impossibility of
the American Dream refuses these groups whiteness; i.e the hoped for privileges of racial superiority,
much in the same way that African Americans, Latin Americans and other racialised minorities are
denied whiteness. Can a poor West Virginian living in a toxified drugged out impoverished landscape
really be defined as a carrier of 'white privilege'?
I was first pointed at this by the juxtapositions of racialised working class and immigrants
in Imogen Tyler's Revolting Subjects Social Abjection and Resistance in Neoliberal Britain but
this below is a useful short article that takes a historical perspective.
The 'racialisation' of class in Britain has been a consequence of the weakening of 'class'
as a political idea since the 1970s it is a new construction, not an historic one.
.
This is not to deny the existence of working-class racism, or to suggest that racism is
somehow acceptable if rooted in perceived socio-economic grievances. But it is to suggest that
the concept of a 'white working class' needs problematizing, as does the claim that the British
working-class was strongly committed to a post-war vision of 'White Britain' analogous to the
politics which sustained the idea of a 'White Australia' until the 1960s.
Yes, old, settled neighbourhoods could be profoundly distrustful of outsiders all outsiders,
including the researchers seeking to study them but, when it came to race, they were internally
divided. We certainly hear working-class racist voices often echoing stock racist complaints
about over-crowding, welfare dependency or exploitative landlords and small businessmen, but
we don't hear the deep pathological racial fears laid bare in the letters sent to Enoch Powell
after his so-called 'Rivers of Blood' speech in 1968 (Whipple, 2009).
But more importantly, we also hear strong anti-racist voices loudly and clearly. At Wallsend
on Tyneside, where the researchers were gathering their data just as Powell shot to notoriety,
we find workers expressing casual racism, but we also find eloquent expressions of an internationalist,
solidaristic perspective in which, crucially, black and white are seen as sharing the same
working-class interests.
Racism is denounced as a deliberate capitalist strategy to divide workers against themselves,
weakening their ability to challenge those with power over their lives (shipbuilding had long
been a very fractious industry and its workers had plenty of experience of the dangers of internal
sectarian battles).
To be able to mobilize across across racialised divisions, to have race wither away entirely
would, for me, be the beginning of a politics that allowed humanity to deal with the inescapable
violence of climate change and corporate power.
*To add to the bibliography David R. Roediger, Elizabeth D. Esch The Production of Difference
Race and the Management of Labour, and Denise Ferreira da Silva Toward a Global Idea of Race.
And I have just been pointed at Ian Haney-Lσpez, White By Law The Legal Construction of Race.
FWIW 'merica's constitutional democracy is going to collapse.
Some day - not tomorrow, not next year, but probably sometime before runaway climate change
forces us to seek a new life in outer-space colonies - there is going to be a collapse of the
legal and political order and its replacement by something else. If we're lucky, it won't be violent.
If we're very lucky, it will lead us to tackle the underlying problems and result in a better,
more robust, political system. If we're less lucky, well, then, something worse will happen .
In a 1990 essay, the late Yale political scientist Juan Linz observed that "aside from
the United States, only Chile has managed a century and a half of relatively undisturbed constitutional
continuity under presidential government - but Chilean democracy broke down in the 1970s."
Linz offered several reasons why presidential systems are so prone to crisis. One particularly
important one is the nature of the checks and balances system. Since both the president and the
Congress are directly elected by the people, they can both claim to speak for the people. When
they have a serious disagreement, according to Linz, "there is no democratic principle on the
basis of which it can be resolved." The constitution offers no help in these cases, he wrote:
"the mechanisms the constitution might provide are likely to prove too complicated and aridly
legalistic to be of much force in the eyes of the electorate."
In a parliamentary system, deadlocks get resolved. A prime minister who lacks the backing
of a parliamentary majority is replaced by a new one who has it. If no such majority can be found,
a new election is held and the new parliament picks a leader. It can get a little messy for a
period of weeks, but there's simply no possibility of a years-long spell in which the legislative
and executive branches glare at each other unproductively.'
Given that the basic point is polarisation (i.e. that both the President and Congress have
equally strong arguments to be the the 'voice of the people') and that under the US appalling
constitutional set up, there is no way to decide between them, one can easily imagine the so to
speak 'hyperpolarisation' of a Trump Presidency as being the straw (or anvil) that breaks the
camel's back.
In any case, as I pointed out before, given that the US is increasingly an urbanised country,
and the Electoral College was created to protect rural (slave) states, the grotesque electoral
result we have just seen is likely to recur, which means more and more Presidents with dubious
democratic legitimacy. Thanks to Bush (and Obama) these Presidents will have, at the same time,
more and more power.
nastywoman @ 150
Just study the program of the 'Sozialdemokratische Partei Deutschland' or the Program of 'Die
Grόnen' in Germany (take it through google translate) and you get all the answers you are looking
for.
No need to run it through google translate, it's available in English on their site. [Or one
could refer to the Green Party of the U.S. site/platform, which is very similar in scope and overall
philosophy. (www.gp.org).]
I looked at several of their topic areas (Agricultural, Global, Health, Rural) and yes, these
are general theses I would support. But they're hardly policy/project proposals for specific regions
or communities the Greens espouse "think global, act local", so programs and projects must be
tailored to individual communities and regions.
To return to my original question and answer it myself: I'm forced to conclude that the
Democrats did not specifically address the revitalization rebirth of the Rust Belt in their
2016 platform. Its failure to do so carried a heavy cost that (nearly) all of us will be forced
to pay.
This sub seems to have largely fallen into the psychologically comfortable trap of declaring
that everyone who voted against their preferred candidate is racist. It's a view pushed by the
neoliberals, who want to maintain he stranglehold of identity politics over the DNC, and it makes
upper-class 'intellectuals' feel better about themselves and their betrayal of the filthy, subhuman
white underclass (or so they see it).
I expect at this point that Trump will be reelected comfortably. If not only the party itself,
but also most of its activists, refuse to actually change, it's more or less inevitable.
You can scream 'those jobs are never coming back!' all you want, but people are never going
to accept it. So either you come up with a genuine solution (instead of simply complaining that
your opponents solutions won't work; you're partisan and biased, most voters won't believe you),
you may as well resign yourself to fascism. Because whining that you don't know what to do won't
stop people from lining up behind someone who says that they do have one, whether it'll work or
not. Nobody trusts the elite enough to believe them when they say that jobs are never coming back.
Nobody trusts the elite at all.
You sound just like the Wiemar elite. No will to solve the problem, but filled with terror
at the inevitable result of failing to solve the problem.
One brutal fact tells us everything we need to know about the Democratic party in 2016:
the American Nazi party is running on a platform of free health care to working class people.
This means that the American Nazi Party is now running to the left of the Democratic party.
Folks, we have seen this before. Let's not descend in backbiting and recriminations, okay?
We've got some commenters charging that other commenters are "mansplaining," meanwhile we've got
other commenters claiming that it's economics and not racism/misogyny. It's all of the above.
Back in the 1930s, when the economy collapsed, fascists appeared and took power. Racists
also came out of the woodwork, ditto misogynists. Fast forward 80 years, and the same thing has
happened all over again. The global economy melted down in 2008 and fascists appeared promising
to fix the problems that the pols in power wouldn't because they were too closely tied to the
existing (failed) system. Along with the fascists, racists gained power because they were able
to scapegoat minorities as the alleged cause of everyone's misery.
None of this is surprising. We have seen it before. Whenever you get a depression in a
modern industrial economy, you get scapegoating, racism, and fascists. We know what to do. The
problem is that the current Democratic party isn't doing it.
Instead, what we're seeing is a whirlwind of finger-pointing from the Democratic leadership
that lost this election and probably let the entire New Deal get rolled back and wiped out. Putin
is to blame! Julian Assange is to blame! The biased media are to blame! Voter suppression is to
blame! Bernie Sanders is to blame! Jill Stein is to blame! Everyone and anyone except the current
out-of-touch influence-peddling elites who currently have run the Democratic party into the ground.
We need the feminists and the black lives matter groups and we also need the green party people
and the Bernie Sanders activists. But everyone has to understand that this is not an isolated
event. Trump did not just happen by accident. First there was Greece, then there was Brexit, then
there was Trump, next it'll be Renzi losing the referendum in Italy and a constitutional crisis
there, and after that, Marine Le Pen in France is going to win the first round of elections. (Probably
not the presidency, since all the other French parties will band together to stop her, but the
National Front is currently polling at 40% of all registered French voters.) And Marine LePen
is the real deal, a genuine full-on out-and-out fascist. Not a closet fascist like Steve Bannon,
LePen is the full monty with everything but a Hugo Boss suit and the death's heads on the cap.
Does anyone notice a pattern here?
This is an international movement. It is sweeping the world . It is the end of neoliberalism
and the start of the era of authoritarian nationalism, and we all need to come together to stamp
out the authoritarian part.
Feminists, BLM, black bloc anarchiest anti-globalists, Sandernistas, and, yes, the former Hillary
supporters. Because it not just a coincidence that all these things are happening in all these
countries at the same time. The bottom 90% of the population in the developed world has been ripped
off by a managerial and financial and political class for the last 30 years and they have all
noticed that while the world GDP was skyrocketing and international trade agreements were getting
signed with zero input from the average citizen, a few people were getting very very rich but
nobody else was getting anything.
This hammered people on the bottom, disproportionately African Americans and especially
single AA mothers in America. It crushed the blue collar workers. It is wiping out the savings
and careers of college-educated white collar workers now, at least, the ones who didn't go to
the Ivy League, which is 90% of them.
And the Democratic party is so helpless and so hopeless that it is letting the American Nazi
Party run to the left of them on health care, fer cripes sake! We are now in a situation
where the American Nazi Party is advocating single-payer nationalized health care, while the former
Democratic presidential nominee who just got defeated assured everyone that single-payer "will
never, ever happen."
C'mon! Is anyone surprised that Hillary lost? Let's cut the crap with the "Hillary
was a flawed candidate" arguments. The plain fact of the matter is that Hillary was running mainly
on getting rid of the problems she and her husband created 25 years ago. Hillary promised criminal
justice reform and Black Lives Matter-friendly policing policies - and guess who started the mass
incarceration trend and gave speeches calling black kids "superpredators" 20 years ago? Hillary
promised to fix the problems with the wretched mandate law forcing everyone to buy unaffordable
for-profit private insurance with no cost controls - and guess who originally ran for president
in 2008 on a policy of health care mandates with no cost controls? Yes, Hillary (ironically, Obama's
big surge in popularity as a candidate came when he ran against Hillary from the left, ridiculing
helath care mandates). Hillary promises to reform an out-of-control deregulated financial system
run amok - and guess who signed all those laws revoking Glass-Steagal and setting up the Securities
Trading Modernization Act? Yes, Bill Clinton, and Hillary was right there with him cheering the
whole process on.
So pardon me and lots of other folks for being less than impressed by Hillary's trustworthiness
and honesty. Run for president by promising to undo the damage you did to the country 25 years
ago is (let say) a suboptimal campaign strategy, and a distinctly suboptimal choice of presidential
candidate for a party in the same sense that the Hiroshima air defense was suboptimal in 1945.
Calling Hillary an "imperfect candidate" is like calling what happened to the Titanic a
"boating accident." Trump was an imperfect candidate. Why did he win?
Because we're back in the 1930s again, the economy has crashed hard and still hasn't recovered
(maybe because we still haven't convened a Pecora Commission and jailed a bunch of the thieves,
and we also haven't set up any alphabet government job programs like the CCC) so fascists and
racists and all kinds of other bottom-feeders are crawling out of the political woodwork to promise
to fix the problems that the Democratic party establishment won't.
Rule of thumb: any social or political or economic writer virulently hated by the current Democratic
party establishment is someone we should listen to closely right now.
Cornel West is at the top of the current Democratic establishment's hate list, and he has got
a great article in The Guardian that I think is spot-on:
"The neoliberal era in the United States ended with a neofascist bang. The political triumph
of Donald Trump shattered the establishments in the Democratic and Republican parties both wedded
to the rule of Big Money and to the reign of meretricious politicians."
Glenn Greenwald is another writer who has been showered with more hate by the Democratic establishment
recently than even Trump or Steve Bannon, so you know Greenwald is saying something important.
He has a great piece in The Intercept on the head-in-the-ground attitude of Democratic
elites toward their recent loss:
"It is not an exaggeration to say that the Democratic Party is in shambles as a political
force. Not only did it just lose the White House to a wildly unpopular farce of a candidate despite
a virtually unified establishment behind it, and not only is it the minority party in both the
Senate and the House, but it is getting crushed at historical record rates on the state and local
levels as well. Surveying this wreckage last week, party stalwart Matthew Yglesias of Vox minced
no words: `the Obama years have created a Democratic Party that's essentially a smoking pile of
rubble.'
"One would assume that the operatives and loyalists of such a weak, defeated and wrecked
political party would be eager to engage in some introspection and self-critique, and to produce
a frank accounting of what they did wrong so as to alter their plight. In the case of 2016 Democrats,
one would be quite mistaken."
Last but far from least, Scottish economist Mark Blyth has what looks to me like the single
best analysis of the entire global Trump_vs_deep_state tidal wave in Foreign Affairs magazine:
"At the end of World War II, the United States and its allies decided that sustained mass
unemployment was an existential threat to capitalism and had to be avoided at all costs. In response,
governments everywhere targeted full employment as the master policy variable-trying to get to,
and sustain, an unemployment rate of roughly four percent. The problem with doing so, over time,
is that targeting any variable long enough undermines the value of the variable itself-a phenomenon
known as Goodhart's law. (..)
" what we see [today] is a reversal of power between creditors and debtors as the anti-inflationary
regime of the past 30 years undermines itself-what we might call "Goodhart's revenge." In this
world, yields compress and creditors fret about their earnings, demanding repayment of debt at
all costs. Macro-economically, this makes the situation worse: the debtors can't pay-but politically,
and this is crucial-it empowers debtors since they can't pay, won't pay, and still have the right
to vote.
"The traditional parties of the center-left and center-right, the builders of this anti-inflationary
order, get clobbered in such a world, since they are correctly identified by these debtors as
the political backers of those demanding repayment in an already unequal system, and all from
those with the least assets. This produces anti-creditor, pro-debtor coalitions-in-waiting that
are ripe for the picking by insurgents of the left and the right, which is exactly what has happened.
"In short, to understand the election of Donald Trump we need to listen to the trumpets blowing
everywhere in the highly indebted developed countries and the people who vote for them.
"The global revolt against elites is not just driven by revulsion and loss and racism.
It's also driven by the global economy itself. This is a global phenomenon that marks one thing
above all. The era of neoliberalism is over. The era of neonationalism has just begun."
You don't live here, do you? I'm really asking a genuine question because the way you are framing
the question ("SPECIFICS!!!!!!) suggests you don't. (Just to show my background, born and raised
in Australia (In the electoral division of Kooyong, home of Menzies) but I've lived in the US
since 2000 in the midwest (MO, OH) and currently in the south (GA))
If this election has taught us anything it's no one cared about "specifics". It was a mood,
a feeling which brought trump over the top (and I'm not talking about the "average" trump voter
because that is meaningless. The average trunp voter was a republican voter in the south who the
Dems will never get so examining their motivations is immaterial to future strategy. I'm talking
about the voters in the Upper Midwest from places which voted for Obama twice then switched to
trump this year to give him his margin of victory).
trump voters have been pretty clear they don't actually care about the way trump does (or even
doesn't) do what he said he would do during the campaign. It was important to them he showed he
was "with" people like them. They way he did that was partially racialized (law and order, islamophobia)
but also a particular emphasis on blue collar work that focused on the work. Unfortunately these
voters, however much you tell them they should suck it up and accept their generations of familial
experience as relatively highly paid industrial workers (even if it is something only their fathers
and grandfathers experienced because the factories were closing when the voters came of age in
the 80s and 90s) is never coming back and they should be happy to retrain as something else, don't
want it. They want what their families have had which is secure, paid, benefits rich, blue
collar work.
trump's campaign empathized with that feeling just by focusing on the factory jobs as jobs
and not as anachronisms that are slowly fading away for whatever reason. Clinton might have been
"correct", but these voters didn't want to hear "the truth". And as much as you can complain about
how stupid they are for wanting to be lied to, that is the unfortunate reality you, and the Democratic
party, have to accept.
The idea they don't want "government help" is ridiculous. They love the government. They just
want the government to do things for them and not for other people (which unfortunately includes
blah people but also "the coasts", "sillicon valley", etc.). Obama won in 2008 and 2012 in part
due to the auto bailout.
trump was offering a "bailout" writ large. Clinton had no (good) counteroffer. It was like
the tables were turned. Romney was the one talking about "change" and "restructuring" while Obama
was defending keeping what was already there.
"Without that bailout, Detroit will need to drastically restructure itself. With it, the
automakers will stay the course - the suicidal course of declining market shares, insurmountable
labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses.
Detroit needs a turnaround, not a check." http://www.nytimes.com/2008/11/19/opinion/19romney.html
So yes. Clinton needed vague promises. She needed something more than retraining and "jobs
of the future" and "restructuring". She needed to show she was committed to their way of life,
however those voters saw it, and would do something, anything, to keep it alive. trump did that
even though his plan won't work. And maybe he'll be punished for it. In 4 years. But in the interim
the gop will destroy so many things we need and rely on as well as entrench their power for generations
through the Supreme Court.
But really, it was hard for Clinton to be trusted to act like she cared about these peoples'
way of life because she (through her husband fairly or unfairly) was associated with some of the
larger actions and choices which helped usher in the decline.
Clinton toward the end offered tariffs. But the trump campaign hit back with what turned
out to be a pretty strong counter attack ""How's she going to get tough on China?" said Trump
economic advisor Peter Navarro on CNN's Quest Means Business. He notes that some of Clinton's
economic advisors have supported TPP or even worked on it. ""
"... I am a petroleum Geologist drilling wells in the Wolfcamp, the USGS report means nothing. They periodically review basins to assess how much petroleum is there, we have been drilling Horizontal wells in the Wolfcamp for almost a decade, and vertical wells for many decades. Right now there are as many rigs running drilling this rock formation as there are in the rest of the country combined, so it is already baked in to the US production data. This is not like a Saudi Arabia field with a low drill and complete and development cost, it will take many billions of drilling capital to get a small percentage of the oil in place. The big deal is that the area is fairly resilient to low oil prices and will cushion the drop in US production due to lack of investment in other basins. ..."
"... I think when seismic, land, surface and down hole equipment is included, the number is much higher. With $20-60K per acre being paid, land definitely has to be factored in. Depending on spacing, $1-5 million per well? ..."
"... In reading company reports, it seems they state a cost to drill and case the hole, another to complete the well, then add the two for well cost. This does not include costs incurred prior to the well being drilled, which are not insignificant. Nor does it include costs of down hole and surface equipment, which also are not insignificant. ..."
"... Land costs are all over the map, and I think Bakken land costs overall are the lowest, because much of the leasing occurred prior to US shale production boom. I think a lot of acreage early on cost in the hundreds per acre. Of course, there was quite a bit of trading around since, so we have to look project by project, unfortunately. For purposes of a model, I think $8 million is probably in the ballpark. ..."
"... I would not include equipment for the well, initially, as OPEX (LOE is what I prefer to stick with, being US based). The companies do not do that, those costs are included in depreciation, depletion and amortization expense. ..."
"... Once the well is in production, and failures occur, I include the cost of repairs, including replacement equipment, in LOE. I am not sure that the companies do that, however. ..."
"... I think the Permian is going to be much tougher to estimate, as there are different producing formations at different depths, whereas the Bakken primarily has two, and the Eagle Ford has 1 or 2. ..."
"... What most interests me are suggestions that there is so much available oil in Wolfcamp and what that will do to oil prices and national policy. Seems like any announcement of more oil will likely keep prices low. And if they stay low, there's little reason to open up more areas for oil drilling. ..."
"... The key question is what part of these estimated technically recoverable resources are economically viable at $50; $60; $70; $80; $90, $100, etc. ..."
"... In November 2015, the EIA estimated proven reserves of tight oil in Wolfcamp and Bone Spring formations as of end 2014 at just 722 million barrels. ..."
"... AlexS. Another key question, which is price dependent, is how many years will it take to fully develop the reserves? ..."
"... If oil prices go back to $100/b in 2018 as the IEA seems to be concerned about, it could ramp up at the speed of the Eagle Ford ..."
"... It's impossible for IEA to make statements like: "the end of low cost oil will negatively affect economic growth", "geology is about to beat human ingenuity" etc. ..."
I am a petroleum Geologist drilling wells in the Wolfcamp, the USGS report means nothing. They
periodically review basins to assess how much petroleum is there, we have been drilling Horizontal
wells in the Wolfcamp for almost a decade, and vertical wells for many decades. Right now there
are as many rigs running drilling this rock formation as there are in the rest of the country
combined, so it is already baked in to the US production data. This is not like a Saudi Arabia
field with a low drill and complete and development cost, it will take many billions of drilling
capital to get a small percentage of the oil in place. The big deal is that the area is fairly
resilient to low oil prices and will cushion the drop in US production due to lack of investment
in other basins.
Thank you, JG -- Straight from the horses mouth, respectfully. The USGS lost all credibility with
me as to estimating TRR in the Monterrey Shale in California. It baffles me, after five years
of publically discussing unconventional shale oil resources, that modelers, internet analysts
and predictors completely ignore economics, debt and finances. Extracting oil is a business; it
must make money to succeed. If it does not succeed, all bets are off regarding predictions.
The Monterrey shale estimate was by the EIA not the USGS. The EIA had a private consultant
do the analysis and it was mostly based on investor presentations, very little geological analysis.
It would be better if the USGS did an economic analysis as they do with coal for the Powder
River Basin. They could develop a supply curve based on current costs, but they don't.
Do you have any idea of the capital cost of the wells (ballpark guess) for a horizontal multifracked
well in the Wolfcamp? Would $7 million be about right (a WAG by me)?
On ignoring economics, I show my oil price assumptions. Other financial assumptions for the
Bakken are $8 million for capital cost of the well (2016$). OPEX=$9/b, other costs=$5/b, royalty
and taxes=29% of gross revenue, $10/b transport cost, and a real discount rate of 7% (10% nominal
discount rate assuming 3% inflation).
I do a DCF based on my assumed real oil price curve. Brent oil price rises to $77/b (2016$)
by June 2017 and continue to rise at 17% per year until Oct 2020 when the oil price reaches $130/b,
it is assumed that average oil prices remain at that level until Dec 2060. The last well is drilled
in Dec 2035 and stops producing 25 years later in Dec 2060.
EUR of wells today is assumed to be 321 kb and EUR falls to 160 kb by 2035. The last well drilled
only makes $243,000 over the 7% real rate of return, so the 9 Gb scenario is probably too optimistic,
it is assumed that any gas sales are used to offset OPEX and other costs, though no natural gas
price assumptions have been made to simplify the analysis.
This analysis is based on the analyses that Rune Likvern has done in the past, though his analyses
are far superior to my own.
I think when seismic, land, surface and down hole equipment is included, the number is much higher.
With $20-60K per acre being paid, land definitely has to be factored in. Depending on spacing,
$1-5 million per well?
I am doing the analysis for the Bakken. A lot of the leases are already held and I don't know
that those were the prices paid. Give me a number for total capital cost that makes sense, are
you suggesting $10.5 million per well, rather than $8 million? Not hard to do, but all the different
assumptions you would like to change would be good so I don't redo it 5 times.
Mostly I would like to clear up "the number".
I threw out more than one number, OPEX, other costs, transport costs, royalties and taxes,
real discount rate (adjusted for inflation), well cost.
I think you a re talking about well cost as "the number". I include down hole costs as part
of OPEX (think of it as OPEX plus maintenance maybe).
Dennis. The very high acreage numbers are for recent sales in the Permian Basin.
In reading company reports, it seems they state a cost to drill and case the hole, another
to complete the well, then add the two for well cost. This does not include costs incurred prior to the well being drilled, which are not insignificant.
Nor does it include costs of down hole and surface equipment, which also are not insignificant.
Land costs are all over the map, and I think Bakken land costs overall are the lowest, because
much of the leasing occurred prior to US shale production boom. I think a lot of acreage early
on cost in the hundreds per acre. Of course, there was quite a bit of trading around since, so
we have to look project by project, unfortunately. For purposes of a model, I think $8 million
is probably in the ballpark.
I would not include equipment for the well, initially, as OPEX (LOE is what I prefer to stick
with, being US based). The companies do not do that, those costs are included in depreciation,
depletion and amortization expense.
Once the well is in production, and failures occur, I include the cost of repairs, including
replacement equipment, in LOE. I am not sure that the companies do that, however.
I think the Permian is going to be much tougher to estimate, as there are different producing
formations at different depths, whereas the Bakken primarily has two, and the Eagle Ford has 1
or 2.
An example:
QEP paid roughly $60,000 per acre for land in Martin Co., TX. If we assume one drilling unit
is 1280 acres (two sections), how many two mile laterals will be drilled in the unit?
1280 acres x $60,000 = $76,800,000.
Assume 440′ spacing, 12 wells per unit.
$76,800,000/12 = $6,400,000 per well.
However, there are claims of up to 8 producing zones in the Permian.
So, 12 x 8 = 96 wells.
$76,800,000 / 96 = $800,000 per well.
Even assuming 96 wells, the cost per well is still significant.
If we assume 96 wells x $7 million to drill, complete and equip, total cost to develop is $.75
BILLION. That is a lot of money for one 1280 acre unit, need to recover a lot of oil and gas to
get that to payout.
I am neither an oil man nor an accountant, so regardless of what we call it I am assuming natural
gas sales (maybe about $3/barrel on average) are used to offset the ongoing costs to operate the
well (LOE, OPEX, financial costs, etc), we could add another million to the cost of the well for
surface and downhole equipment and land costs. Does an average operating cost over the life of
a well of about $17/b ($14/b plus natural gas sales of $3/b of oil produced)seem reasonable?
That
would be about $5.4 million spent on LOE etc. over the life of the well (assuming 320 kbo produced).
Also does the 10% nominal rate of return sound high enough, what number would you use as a cutoff?
You use a different method than a DCF and want the well to pay out in 60 months. This would correspond
to about a 14% nominal rate of return and an 11% real rate of return (assuming a 3% annual inflation
rate.)
"The Monterrey shale estimate was by the EIA not the USGS. The EIA had a private consultant do
the analysis and it was mostly based on investor presentations, very little geological analysis."
Exactly.
USGS' estimate as of October 2015 is very conservative:
"The Monterey Formation in the deepest parts of California's San Joaquin Basin contains an
estimated mean volumes of 21 million barrels of oil, 27 billion cubic feet of gas, and 1 million
barrels of natural gas liquids, according to the first USGS assessment of continuous (unconventional),
technically recoverable resources in the Monterey Formation."
"The volume estimated in the new study is small, compared to previous USGS estimates of conventionally
trapped recoverable oil in the Monterey Formation in the San Joaquin Basin. Those earlier estimates
were for oil that could come either from producing more Monterey oil from existing fields, or
from discovering new conventional resources in the Monterey Formation."
Previous USGS estimates were for conventional oil:
"In 2003, USGS conducted an assessment of conventional oil and gas in the San Joaquin Basin,
estimating a mean of 121 million barrels of oil recoverable from the Monterey. In addition, in
2012, USGS assessed the potential volume of oil that could be added to reserves in the San Joaquin
Basin from increasing recovery in existing fields. The results of that study suggested that a
mean of about 3 billion barrels of oil might eventually be added to reserves from Monterey reservoirs
in conventional traps, mostly from a type of rock in the Monterey called diatomite, which has
recently been producing over 20 million barrels of oil per year."
I am corrected, RE; USGS and Monterrey. I still don't believe there is 20G BO in the Wolfcamp.
Most increases in PB DUC's are not wells awaiting frac's but lower Wolfcamp wells that are TA
and awaiting re-drills; that should tell you something. With acreage, infrastructure and water
costs in W. Texas, wells cost $8.5-9.0M each. The shale industry won't admit that, but that's
what I think. What happens to EUR's and oil prices after April of 2017 is a guess and a waste
of time, sorry.
What most interests me are suggestions that there is so much available oil in Wolfcamp and what
that will do to oil prices and national policy. Seems like any announcement of more oil will likely keep prices low. And if they stay low,
there's little reason to open up more areas for oil drilling.
"Their assessment method for Bakken was pretty simple pick a well EUR, pick a well spacing,
pick total acreage, pick a factor for dry holes multiply a by c by d and divide by b."
USGS estimates for average well EUR in Wolfcamp shale look reasonable: 167,ooo barrels in the
core areas and much lower in other parts of the formation.
I do not know if the estimated potential production area is too big, or assumed well spacing
is too tight.
The key question is what part of these estimated technically recoverable resources are economically
viable at $50; $60; $70; $80; $90, $100, etc.
Significant part of resources may never be developed, even if they are technically recoverable.
Keep in mind these USGS estimates are for undiscovered TRR, one needs to add proved reserves times
1.5 to get 2 P reserves and that should be added to UTRR to get TRR. There are roughly 3 Gb of
2P reserves that have been added to Permian reserves since 2011, if we assume most of these are
from the Wolfcamp shale (not known) then the TRR would be about 23 Gb. Note that total proved
plus probable reserves at the end of 2014 in the Permian was 10.5 Gb (7 Gb proved plus 3.5 GB
probable with the assumption that probable=proved/2). I have assumed about 30% of total Permian
2P reserves is in the Wolfcamp shale. That is a WAG.
Note the median estimate is a UTRR of 19 Gb with F95=11.4 Gb and F5=31.4 Gb. So a conservative
guess would be a TRR of 13.4 Gb= proved reserves plus F95 estimate. If prices go to $85/b and
remain at that level the F95 estimate may become ERR, at $100/b maybe the median is potentially
ERR. It will depend how long prices can remain at $100/b before an economic crash, prices are
Brent Crude price in 2016$ with various crude spreads assumed to be about where they are now.
I just looked at Permian Basin crude reserves (Districts 7C, 8 and 8A) and assumed the change
in reserves from 2011 to 2014 was from the Wolfcamp. I didn't know about that page for reserves.
It is surprising it is that low.
In any case the difference is small relative to the UTRR, it will be interesting to see what
the reserves are for year end 2015.
Based on this I would revise my estimate to 20 Gb for URR with a conservative estimate of 12
Gb until we have the data for year end 2015 to be released later this month.
My guess is that the USGS probably already has the 2015 year end reserve data.
The EIA proved reserves estimate for 2015 will be issued this month. I think we will see a
significant increase in the number for the Permian basin LTO.
Also note that USGS TRR estimate is only for Wolfcamp.
I can only guess what could be their estimate for the whole Permian tight oil reserves.
But the share of Wolfcamp in the Permian LTO output is only 24% (according to the EIA/DrillingInfo
report).
That makes sense. I also imagine the USGS focused on the formation with the bulk of the remaining
resources. It is conceivable that the 30 Gb estimate is closer to the remaining oil in place and
that more like 90% of the TRR is in the Wolfcamp, considering that the F5 estimate is about 30
Gb. That older study from 2005 may be an under estimate of TRR for the Permian, likewise the USGS
might have overestimated the UTRR.
If oil prices go back to $100/b in 2018 as the IEA seems to be concerned about, it could ramp
up at the speed of the Eagle Ford (say 2 to 3 years). It will be oil price dependent and perhaps
they won't over do it like in 2011-2014, but who knows, some people don't learn from past mistakes.
If you or Mike were running things it would be done right, but the LTO guys, I don't know.
"This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically
recoverable resources.
Undiscovered resources are those that are estimated to exist based on geologic knowledge and
theory, while technically recoverable resources are those that can be produced using currently
available technology and industry practices. Whether or not it is profitable to produce these
resources has not been evaluated."
If it requires slave labor at gunpoint to get the oil out, then that's what will happen because
you MUST have oil, and a day will soon come when that sort of thing is reqd.
This follows on from reserve post above (two a couple of comments). In terms of changes over the
last three years there really weren't anything much dramatic. We'll see what 2016 brings, especially
for ExxonMobil, but it looks like they already knocked a big chunk off of their Bitumen numbers
already in 2015.
Note I went through a lot of 20-F and 10-K reports watching the rain fall this morning and
copied out the numbers, I'm not guaranteeing I got everything 100%, but I think the general trends
are shown.
Note the figures are totals for all nine companies I looked at.
IEA WEO is out:
http://www.iea.org/newsroom/news/2016/november/world-energy-outlook-2016.html presentation
slides, fact sheet and summary are available online (report can be purchased). IEA seems to be
_very_ concerned about underinvestment in upstream oil production. Several pages of the report
is devoted to this, the title of that section is "mind the gap". More or less all of the content
has been discussed on this website, including the issue with high levels of debt and that this
can affect suppliers' capacity to rebound, and how much demand can be reduced as a result of a
stringent carbon cap.
From the fact sheet (available free of charge):
"Another year of low upstream oil investment in 2017 would risk a shortfall in oil production
in a few years' time. The conventional crude oil resources (e.g. excluding tight oil and oil sands)
approved for development in 2015 sank to the lowest level since the 1950s, with no sign of a rebound
in 2016. If there is no pick-up in 2017, then it becomes increasingly unlikely that demand (as
projected in our main scenario) and supply can be matched in the early 2020s without the start
of a new boom/bust cycle for the industry"
Presentation 1:09 Dr. Birol gives his view: "depletion never sleeps"
I wonder who that paragraph is aimed at. As I indicated above the companies that would be investing
in long term conventional projects don't have a very large inventory of undeveloped reserves (17
Gb as of end of 2015, some of this has gone already this year and more is in development and will
come on stream in 2017 and 2018 (and a small amount in later years for approved projects). I'd
guess there might only be less than 10 Gb (and this the most expensive to develop) that is currently
under appraisal among the major western IOCs and larger independents; allowing for their partnerships
with NOCs in a lot of the available projects that could represent 20 to 30 Gb total. That really
isn't very much new supply available, and a large proportion is in complex deep water projects
that wouldn't be ramped up fully until 6 to 7 years after FID (i.e. already too late for 2020).
Really the main players need to find new fields with easy developments, but they obviously aren't,
probably never will, and actually aren't looking very hard at the moment.
My interpretation is that this is IEAs way of saying that it does not look good. Those who can
read between the lines get the message. Also, a few years from they will be able to say "see we
told you so".
It's impossible for IEA to make statements like: "the end of low cost oil will negatively affect
economic growth", "geology is about to beat human ingenuity" etc.
WEO have become more and more bizarre over the years. On the one hand they contain quantitative
projections which tell the story politicians wants to hear. On the other hand, the text describes
all sorts of reason of why the assumptions are unlikely to hold. Normally, if you don't believe
in your own assumptions you would change them.
"... If we are to rethink capitalism, let's make sure to include as one key element the banishment of the phrase "human capital". ..."
"... "On both sides of the Atlantic, public companies are sitting on record piles of cash-around $2 trillion in the U.S. and a similar amount in Europe" ..."
"... The first function of unemployment (which has always existed in open or disguised forms) is that it maintains the authority of master over man. The master has normally been in a position to say: "If you don't want the job, there are plenty of others who do." When the man can say: "If you don't want to employ me, there are plenty of others who will," the situation is radically altered. ..."
"... Illiberal libertarians: Why libertarianism is not a liberal view ..."
"... "Sustained exponential growth is mathematically impossible." ..."
Where is the sustainable part? It is not in goals of growth. The goal should be sustainable
evolution.
Government enshrines process and practices. It doesn't evolve well. Government also has a devastating
track record on picking investments to incentivize - oil over ethyl alcohol back in the 1920's.
Promoting land development and farming practices in the western plains that created the dust bowl.
Government does do an amazing job of steam rolling contrary information, ideas, etc.
The rigorous and scientific economics profession just needs to decide
"Which way is up?"
40 years ago, most economists and almost everyone else believed the economy was demand driven
and the system naturally trickled up. Now most economists and almost everyone else believes the
economy is supply driven and the system naturally trickles down. Economics has been turned upside
down in the last 40 years.
For a supply side, trickle down world you need Neo-Keynesian stimulus, where money is fed into
the top of the economic pyramid, the banks, to be lent out, invested and trickle down.
For a demand driven, trickle up world you need traditional Keynesian stimulus, where money
is fed into the bottom of the economic pyramid through infrastructure spending, to create jobs
and wages which will be spent into the economy and trickle up.
The West has been doing Neo-Keynesian stimulus for the last eight years and asset prices have
been maintained but little has trickled down to the real economy.
Oh dear, today's economics is upside down, let's try some good old Keynesian fiscal stimulus.
Brexit and Trump are the result of not working out "which way is up?" a little sooner.
China did fiscal stimulus after 2008, how did that go? China was the engine of global growth
after 2008, its insatiable demand for raw materials made lots of other emerging economies boom
too. Keynes is the man; he's the right way up.
Let's form a global economy guided by ideas of economic liberalism where we put the economy
first over the interests of people.
1980s boom
Early 1990s bust
Late 1990s boom
Early 2000s bust
Mid 2000s boom
Late 2000s bust
2008 on stagnation
Unfortunately, no one really understood how the economy worked.
2008 "How did that happen?"
What more evidence do we need?
What is wrong with economics when science can successfully send space craft to the outer edges
of the solar system?
Science has been allowed to develop successfully as it cannot be modified to suit certain vested
interests to make them richer.
Economics is not like this.
There is something wrong with economics that was first spotted at the end of the 19th century
and pretending it is a real science today is little more than wishful thinking.
Thorstein Veblen wrote an essay in 1898 "Why is economics not an evolutionary science?". Real
sciences are evolutionary and old theory is replaced as new theory comes along and proves the
old ideas wrong. Economics jumps about like a cat on a hot tin roof and is not evolutionary, in
the late 1970s Keynesian ideas were ditched for the ideas of Milton Freidman. We threw out the
old Keynesian economics and bought in something new and untested just as we are about to embark
on globalisation, it was asking for trouble. Milton Freidman hadn't realised real science is evolutionary.
Looking back we can see other problems.
Malthus came up with an economics that worked for the vested interests of the land owning class.
Ricardo came up with an economics that worked for the vested interests of the financial class.
Marx came up with an economics that worked for the ideology he was trying to put forward.
It's complex, quite fuzzy and can be easily biased to suit vested interests.
Early on it became very apparent to the wealthy and powerful that economics needed to be biased
in the right direction for their interests.
As Classical Economics reached its zenith in the 19th Century it had come to some unfortunate
conclusions powerful, vested interests didn't like so they backed a new, neoclassical economics
that missed out the undesirable conclusions from Classical Economics like the differentiation
of "earned" and "unearned" income.
Most of the UK now dreams of giving up work and living off the "unearned" income from a BTL
portfolio, extracting the "earned" income of generation rent.
The UK dream is to be like the idle rich, rentier, living off "unearned" income and doing nothing
productive.
This distinction between "earned" and "unearned" income has been buried ever since, but was
hidden is later revealed by who this economics favours.
Neoclassical economics led to the Wall Street Crash of 1929 and the Great Depression, where
its ideas just made things worse.
Keynes came up with some new ideas that were incorporated into the "New Deal" and the recovery
began in the US.
Keynes ideas had some unpleasant conclusions as well and so economists moulded some of Keynes
ideas into neoclassical economics ready to use after the Second World War. Keynes had said that
capitalism was inherently unstable and recognised the dangers from financial asset investing,
not the sort of ideas that were desirable.
The Golden Age of the 1950s and 1960s followed.
The new hybrid Keynesian ideas went wrong in the 1970s and its ideas did not lead to recovery.
The powerful vested interests sought an opportunity to bring back their really biased pure
neoclassical economics and use it as the basis for a global economy.
It was improved, but still had all the old problems:
1920s/2000s high inequality, high banker pay, low regulation, low taxes for the wealthy,
robber barons (CEOs), reckless bankers, globalisation phase 1929/2008 Wall Street crash 1930s/2010s
Global recession, currency wars, rising nationalism and extremism
Left to their own devices, powerful vested interests will develop an economics that is so biased
the economic system will collapse due to the polarisation of wealth at the personal and national
level (like now).
Lots of other inconvenient stuff is missing too, which has lead to many of the recent mistakes,
including 2008 and its aftermath:
1) The true nature of money and how it is created and destroyed on bank balance sheets.
2) The work of Irving Fischer, Hyman Minsky and Steve Keen on debt inflated asset bubbles.
Their inflation, bursting and the debt deflation that follows.
3) Richard Koo on balance sheet recessions.
You can bias economics to suit vested interests but you can't make that biased economics work.
Economics needs to be rebuilt form the bottom up in an evolutionary, scientific, manner not
missing out the bits that are inconvenient for wealthy and powerful vested interests.
You can't put the economy first without good economics.
"On both sides of the Atlantic, public companies are sitting on record piles of cash-around
$2 trillion in the U.S. and a similar amount in Europe"
Keynes called it the "liquidity trap". 1929 and 2008 were both debt inflated asset bubbles,
where securitising loans increased leverage. Keynes studied the Great Depression and noted monetary
stimulus lead to a "liquidity trap". Businesses and investors will not invest without the demand
there to ensure their investment will be worthwhile. The money gets horded by investors and on
company balance sheets as they won't invest. Cutting wages to increase profit just makes the demand
side of the equation worse and leads you into debt deflation. Central Banks today talk about the
"savings glut" not realising this is Keynes's "liquidity trap".
US firms engage in share buybacks as they don't want to invest in expansion.
Investors pour into negative yielding bonds and gold for safety.
Keynes realised wage income was just as important as profit as wage income looks after the
demand side of the equation.
This is why you need fiscal stimulus to create jobs and wage income to spur demand.
Say may have said "supply creates its own demand" but he was wrong.
As we can see businesses and investors don't believe Say either and this why they are hoarding.
>Stagnation is not caused by the deterministic forces of an ageing population, high savings,
and exhausted tech opportunities. Rather, it is a result of falling private and public investment
that has prevented the emergence of new investment opportunities.
So I expected an explanation of why "falling investment" isn't directly correlated to "exhausted
tech opportunities" and the like. Didn't get it.
The usual techno-libertarian babble with the libertarian part jammed into the closet so as
to appeal to the political classes.
I think the problem with your problem is that it's not clear where the next phase of growth
will come from, and as tech has reached a pinnacle, maybe the new thing will turn out to be surprisingly
luddite and the searching for it may be better done by collective action which then is picked
up by the private sector with the public part moving on to lead the thing that replaces that because
this old world keeps spinning around in spite of the fact that people are always haunted with
the notion that it might stop .think y2k, jan 1 2000 was going to and did happen regardless of
the perceived capacity for our systems to bear it. Like in the election where the private sector
thought it could lead us where they wanted us to go but it turns out they were wrong and they're
actually following
The secret is in how money works, which is why hardly any economists understand either the
problem or the solution.
Money and debt are opposite sides of the same coin. If there is no debt there is no money.
Money is created by loans and destroyed by repayments of those loans.
After the system has been flooded with lots of debt by encouraging bankers to maximise profit
with their debt products, you get to a point where everyone is paying down debt and few people
are taking on new loans. This makes the money supply contract, making it harder to pay down the
debt.
When the repayments are larger than the new debt being taken on, the money supply starts contracting.
The Government needs to step in as the borrower of last resort to keep the money supply stable,
otherwise you head into a deflationary spiral.
Central Banks are the lender of last resort and Governments are the borrowers of last resort.
Central Banks print money for banks (QE) and, as no one is borrowing, it stays in the financial
system blowing bubbles and doesn't get to the real economy as seen from the low inflation round
the world.
Central Banks printing money for the Government to engage in fiscal stimulus gets the money
directly into the economy.
What they have been trying to do all along, the intermediary has just changed.
Banks never got the money into the real economy.
Keynes studied a similar situation in the Great Depression where debt deflation had taken hold.
He realised businesses and investors won't invest in the real economy when there is no demand.
Today we see all the global businesses hoarding cash and engaging in share buybacks, they won't
invest because there is no demand to make this worthwhile.
Keynes realised wage income was just as important as profit, wage income creates demand.
Keynes understood money.
Today's businesses think they should maximise profit by cutting wages, reducing wage income
and demand and making the whole thing worse.
Today's economics is basically the same as that of the 1920s, its neoclassical economics and
its core remains unchanged.
Neoclassical economics believes supply creates its own demand "Say's Law". It didn't then and
it doesn't now.
Neoclassical economics believes capitalism naturally reaches stable equilibriums. It led to
a Wall Street Crash and Great Depression then and it led to a Wall Street Crash and global recession
now.
The FED engaged in QE then, it has engaged in QE now, it didn't really work either time.
It was the "New Deal" that bought the US out of the Great Depression, it's what the world needs
now.
Saturating an economy in debt will always lead to debt deflation and the only way out is fiscal
stimulus.
He explains the mistake Christina Romer made analysing data from the Great Depression leading
Central Banks to think they could get us over 2008 with monetary policy.
In the first 12 mins.
Austerity is the worst thing you can do as it accelerates the contraction of the money supply.
When the US was panicking about the fiscal cliff it was because Ben Bernanke had read Richard
Koo's book and knew cutting Government spending would drive the US economy into recession.
Richard Koo understands money, he has worked in a Central Bank (New York Federal Reserve).
The secrets of money are not included in the neoclassical economics studied by economists outside
the Central Banks. The consequences of the secrets of money are understood by very few who work
in the Central Banks, they often favour austerity when it is the worst thing you can do.
While I don't disagree with the this essay in the whole, I think it misses an important piece.
There must be something that drives government investment. In the 1950s the government's investment
in the highway system crowded in investment in the auto industry as well as investments in suburban
housing. Those were things that could drive generations of wealth creation.
Green energy investments might do some of that today, but nowhere near on that scale. Besides
that, what else is there?
Maybe a conversion to "single-payer" medicine expanded to include a geater range of services;
child-services, elder care, and the like. These are people intensive services that can be performed
by a wide range of skilled and semi-skilled people. It puts people to work at a job that is becoming
essential as boomers age.
I think that her idea of private public partnerships may be the opposite of that of Trump.
There is worry that Trump's idea of this is privatization of assets to benefit a few in line
with crony capitalism.
Mazzucato on the other hand wants the public to share profits and not just losses.
I think Trump does understand that fiscal stimulus is important and can outweigh the austerity
oriented goal of balancing a budget.
Government has the deep pockets that can get huge projects like energy alternatives and public
transportation off the ground. Mazzucato wants to do it in a way that benefits the public rather
than what we have been seeing with the profits of these projects funneled to the 1%.
>I think that her idea of private public partnerships may be the opposite of that of Trump.
Oh the Judean People's Front not those right b*stards in the People's Front of Judea. Got it.
>Government has the deep pockets that can get huge projects like energy alternatives and public
transportation off the ground.
Well then just do it. What does the private financial sector have to do with it? I'm pretty
sure Solyandra didn't cost anybody a single vote they would have gotten otherwise so why did
they even involve the private financial again note the important word, here sector?
I'm not opposed to a more socialistic type response and actually see this as a move in that
direction.
She wants though to work within a capitalist system. Recognizing that the government has a
lot of control even in so called 'free markets' this often leads to monopoly type activities.
The government gives away important work such as in drug research or technology to the private
sector and lets them run with it with little control.
She would like to see more control over this work. It can be given to pharmaceutical and tech
companies to improve and market but not without controls in the public interest such as limiting
excessive drug prices and not having all the tech gains of a product go to a few execs but be
distributed to the overall public which helped fund the research in the first place.
In infrastructure it would emphasize the overall good to the economy of good infrastructure
and not let a few companies benefit by control over tolls for example.
trying to better capitalism is the wrong path. the lack of investments is caused by the growing
impossibility to get profit out of it which is the effect of capitalism itself (tendency of
falling profit rate).
Kalecki disagrees with you and later empirical work backs him up.
Capitalists choose to run the economy at less than full employment because they don't like
workers having the power they'd have (more say over work conditions, less of a pay gap with capitalists)
if they could quit their jobs and find another one readily. They seek a higher profit level than
is necessary and chronically underinvest as a result.
+1 YES! See also Joan Robinson (re: unemployment):
The first function of unemployment (which has always existed in open or disguised forms)
is that it maintains the authority of master over man. The master has normally been in a position
to say: "If you don't want the job, there are plenty of others who do." When the man can say:
"If you don't want to employ me, there are plenty of others who will," the situation is radically
altered.
Uh, one small problem. Capitalism isn't the problem. Unless we're simply using the word capitalism
to describe any fascist combination of imperialism abroad and corporate subsidies at home.
For example:
The failure by policy-makers to fully understand the dynamics of the capitalist system
This is the state of economic discourse on the left? Policy-makers understand the dynamics
quite well. That's why they have done everything possible to undermine the rule of law and individual
rights at the heart of market-based economics.
Concentration of wealth and power isn't a failure of public policy. It's the point.
Yas, No True Libertarian would allow erosion of the ruleoflaw and individualrights if only
those could be preserved, everythiing would fall into its preordained place Market-based economics
Accept Libertarians don't belive in rights, but rather in a batch of comodities they call "rights"
that exist for the soul purpous of being bartered away to the ownership class.
. . . What is striking about libertarians' conception of political power is
its resemblance to feudalism . By "feudalism" I mean a particular conception of political power,
not the manorial system or the economic system that relies on the institution of serfdom (as
in European medieval feudalism).
p.149
. . . Liberalism evolved in great part by rejecting the idea of privately
exercised political power, whether it stemmed from a network of private
contracts under feudalism or whether it was conceived as owned
and exercised by divine right under royal absolutism. Libertarianism
resembles feudalism in that it establishes political power in a web of
bilateral individual contracts. Consequently, it has no conception of
legitimate public political authority nor any place for political society,
a "body politic" that political authority represents in a fiduciary capacity.
Having no conception of public political authority, libertarians
have no place for the impartial administration of justice. People's
rights are selectively protected only to the extent they can afford protection
and depending on which services they pay for. Having no conception of a political society,
libertarians have no conception of the common good , those basic interests of each individual
that according to liberals are to be maintained for the sake of justice by the impartial exercise
of public political power.
Rethinking capitalism and rolling back the corporate coup d'etat will be difficult as most
citizens have no idea what has taken place. Trumps election is good in one sense, it will be no
longer possible to obfuscate corporate interests as somehow also in the best interests of the
citizenry. The are in fact opposites.
Rethinking capitalism leads to rethinking the legitimacy of power centers. The cyclical political
theatre between a sham duopoly hopefully is over, or will be over when Trump fails to deliver
in any meaningful way for the working class. The time is now for rediscovering the true power
in government lies with the people, not with some enthroned elite. It is somewhat ironic that
it took the Queen of England to point that out in her indirect way.
The author seems to have a hard time shaking certain conventional assumptions.
If future growth is to take a different path
If that path is negative then maybe they have a point but we can't have perpetual growth in
a closed system which is what this planet is.
And then this part:
As early as 1821, David Ricardo worried about the effect of mechanization on labor displacement.
What was important then, and should inform our thinking now, was that profits (from mechanization)
be reinvested into production, meaning that, in Ricardo's time, while some jobs fell away,
others were created.
This also seems a little shortsighted and somewhat vague. How much exactly do we need to produce?
Based on the amount of garbage floating around in the ocean and the rising global temperatures
it would seem we've probably already overdone it.
This is another author who seems to think that money really does grow on trees, ie it's a naturally
occurring phenomenon like the weather that we are subject to and can't change much rather than
a tool made by human beings that can be used any way we see fit.
Rather than factories running 24/7 producing mounds of cheap crap that breaks down and needs
to be replaced on a regular basis just to keep enough people marginally employed and constantly
buying stuff, would it really be so bad to have automation that produces enough of what we need
and then stops for a while until there's a new need, coupled with a job guarantee and BIG?
It boils down to, do you want a rip roaring economy for all or a habitable planet?
Perhaps we can escape this with a combination of jawb guarantee and BIG. You're hired and your
jawb is to do nothing. The problem is when you are off the jawb, spending the money earned by
doing nothing
What caused the economic collapse was hitting the obvious limits of economical resource extraction
and environmental limits to absorbing our industrial waste stream.
The global economy is 100% dependent on resource extraction, production, and disposal.
We have tried to deny this reality by jiggering around with economic, monetary, and financial
theories as if they, along with technolology can over come it. All that has done is increase inequality
and empower what I call the cannibalistic phase of capitalism.
What is needed is just about the opposite of capitalism. We need to figure out how to pay people
to do less way less, have less, consume less, procreate less .
We are facing a longer-term economic collapse if we don't restructure the economy to be vastly
less wasteful. But the crisis in 2008 was not the result of resource extraction. This was a financial
crisis and I (and many others) described at great length how it came about. My argument was that
it was the result of bad economic ideology, applied over a period of 50 years.
Sigh- another blind Economist wandering through the zoo, stumbling upon an elephant's trunk,
and conjuring up ideas to make it GROW longer.
Sustained exponential growth is mathematically impossible. At any rate of growth, the end result
is that humans and their things end up occupying every square inch of territory, using every joule
of energy, and consuming every natural resource until collapse intervenes.
Natural capital - the physical characteristics of the biosphere- is the foundation of all life
including that of homo sapiens. Any economic theory that fails to build from this fundamental
fact is mere econobabble.
Humans are a tribal species who have devoted much of their "human capital" to warfare since
the current genetic strain succeeded in exterminating the Neanderthals. Any discussion of contemporary
capitalism in the USA that fails to examine the pivotal role of the military-industrial state
is fatally flawed.
The goal of economic policy should be the maximization of quality of life for a population
level that can live in harmony with the billions of other inhalants of the biosphere- a goal diametrically
opposed to homo sapiens goal of growth in ability to dominate it.
You are wrong on both counts. If "growth" is just "compound intrest," than you have a pointless
economey, one that is not based in the real world,
Second, "human resourcs" is a "real resource" and thus havefundemental limits.
This is the origial point. You can not have an economey that violates the 2nd law of thermal
dynamics. Economist need to stop pretending physics dosn't apply.
the entropy that exists in our economies is a failure to organize at a much more complex and
complete level they say that nuclear energy is an incomplete technology and we all know how
disastrous it can be so is economics and it is because capitalism is a simplistic theory. Steve
Keen is so good on this subject. He almost makes me see in graphic form how we should reverse
our thinking from outward fractals of "productivity and profits" to something that goes deep instead.
We need to change the concept of vertical integration to deep integration make productivity
be coherent all the way down the economic food chain from the profits to the bacteria in the ground.
Repair the environment at all levels of production and account for the costs of using even the
smallest thing this would indeed put a cramp in capitalism.
"Economists need to stop pretending."
There, fixed it for you, the idea that an infinitely-complex system that is massively swayed by
human emotion is somehow "model-able" is silly. The queen called everybody's bluff, recall what
the august "economists" finally said after she asked what happened and why: "We don't know".
Second-order silly is the idea that a centrally-planned, command-and-control approach can work
on such a system. Keynes and the others that came up with this hoo-haw were admirers of Stalinist
Russia, at the time the Bloomsbury and other pink crowd were gushing "I have seen the future and
it works!". The idea is "let's raise X number cows because we project we will need leather for
Y number of shoes". After you're done falling off your chair laughing take a moment to realize
that's exactly what they try to do today with the price of money and the level of demand in the
economy.
There are too many unintended consequences, look at ZIRP for example, they thought free money
would make people borrow more but (being rational) people saw they would get no current income
so boosted their savings instead.
So:
Let bad debts clear, otherwise you're just suppressing brush fires on the forest floor and eventually
the whole thing burns to the ground. Mario Draghi buying CCC-rated junk is precisely what you
should not do.
And to Watt4 Bob below, the only "creative destruction" we have today is for people and households.
Zombie banks, oil companies, insurers, big pharma, military companies, the surveillance-industrial
complex are completely isolated from creative destruction by the big fat thumb of the gumment
on the scales.
Paul, Please step back and analyze the logical fallacy in your statement. Exponential growth
based upon human resources ("rather than real resources" means that at some point in the growth
cycle humans have to eat human resources rather than food.
Anyone who makes the (common) claim that you do simply does not understand the meaning of exponential
growth. Model growth at any rate and you eventually reach the point where the next increment of
growth fills the entirety of any finite universe. If production grows exponentially at the 3%
target often bandied about as desirable the entire world would be covered by the human capital
you hope will provide an escape from mathematical certainty. It only takes about 400 years of
3% exponential growth starting with only one Einstein or one bite of information to reach the
finite limit of our planet. And it matters not a whit whether the human capital walks around in
a physical body or is condensed into bits & bites and stored on a flash drive, the mathematics
are the same.
Because we live in a real world with real physical limits, sustained long term growth will
always be impossible and collapse of growth inevitable. Any theory of economics worth more than
toilet paper should recognize that fundamental fact.
Thor, with all due respect you've misunderstood what I wrote. Your response killed a bunch
of straw men.
The point about human resources was that the growth in consumption is some 20 times greater
than population growth. Take that for what it's worth, I think that is a big part of the problem.
The first point was purely arithmetic. An annuity of 1 at rate r for n periods fits the curve
of GDP growth (a proxy for growth) like a glove. Compound interest is calculated using the same
formula. Beyond that I don't know what you're arguing against.
You can do the same for growth in federal spending, growth in Investment, etc. They all fit
the annuity curve. Your "3% exponential growth" is an annuity of 1 at 3% compounded for n periods.
Which IS an exponential relationship, but it puts growth in perspective when you look at it
as analogous to compounding interest. For me at least.
Rethinking capitalism and rolling back the corporate coup d'etat will be difficult as most
citizens have no idea what has taken place.
It's worse than that.
Hysteresis, one of my favorite new vocabulary words, is the reason there's no easy fix for
the system that is currently circling the drain.
That being the damage done by neo-liberal, creative destruction was actually destructive
destruction.
It is impossible to simply turn-back the hands of time, the damage is done, the manufacturing
base that supported a healthy working-class has been destroyed, and there is no actual path for
revival of that reality.
This is the reason we are faced with the necessity of creating a new economy, TPTB have destroyed
any path to what we might call a 'normal' economy from our current condition.
Hysteresis, means "Nope, you can't get there from here."
That used to be a Yankee farmer joke, now it's a perfectly good explanation for our situation.
Assuming infinite growth on a finite planet is the fatal hubris of capitalism, which assumes
that economics exist apart from the laws of nature. We are experiencing inevitable contraction
because we have exceeded the limits of earth's ability to sustain our species' rapacious demands
and destructive lifestyles. We are already experiencing catastrophic effects from our destruction
of the planet's climate moderating system, which ultimately will destroy our habitat. We have
seen this coming for a long time, yet leaders, heads of state, and academicians (including this
author) continue to think in outmoded ways, particularly about our disregard of the ecosystem
which will result in near-term mass extinction. Human exceptionalism is the fatal flaw that will
wipe out most if not all life on this planet.
In the past, disaster was local, because hubris met its match locally. With a global civilization,
we dream of going to Mars to trash another planet from scratch. But when disaster is truly global,
the result will be truly apocalyptic. Humanity has had a good run; eat, drink and love while you
still can.
There is an ancient battle between Heraclitus and Parmenides. Either dynamics is reality, or
statics is reality. The reality is, both are real. Change is liberal, stasis is conservative.
Unfortunately neither is a panacea, because there is no panacea, it all depends on context. When
change is required, conservative-ism brings us the French Revolution as an unintended consequence.
When stasis is required, liberal-ism brings us the French Revolution as an intended consequence.
Sometimes change happens, sometimes things stay the same and either can be good or bad for you
individually. Generalizing beyond this is over-generalization.
While I acknowledge that this was written for an audience of economists, I do not think economists
should expect to have much influence on the development of new systems until they learn to express
themselves in language intelligible to an educated general audience. I can parse the clause, "Skills
have always been an endogenous function of investment." I know the meaning of every word in it.
I have no idea what it is supposed to communicate. It is not my problem, but the author's, that
she fails to state what she considers a key point in language that conveys meaning. In fact, the
sentence which follows the jargon appears to say what needed to be said; it is not at all clear
what purpose the jargon was intended to serve, other than to signal membership in a professional
club. Its primary effect is to break the flow of thought and annoy the non-specialist reader.
The point about companies hording profits is, I believe a key point. The money belongs to the
shareholders, and the individual shareholder have to place investments and not indulge in share
buybacks.
A second point not mentioned, after the great recession the chose solution was to preserve
as much debt and debt service as possible, ignoring the asserting "debt which cannot be repaid,
will not be repaid."
" shareholders have to place investments " in order for capitalism to progress. But oops,
we have come to the end of an era and altho there are trillions of dollars on the sidelines, there
is no place to invest. Like the guy in MASH said re Christianity: You guys haven't come up with
a new idea for 2000 years.
The fatal flaw of the current system is that it is not designed to benefit the majority of
people. It is a system of rent extraction, made to benefit a few people on top at the expense
of the general public.
It needs more than just a rethinking. It needs a ground up design. The problem is that the
rent seekers have control of business and government. Both institutions will not be used for public
benefit, but rather for the benefit of the extractive elite at the expense of the rest of society.
As for what has been learned the elite do not "want" to learn the lessons that need to be
learned. That is the problem that we face.
"... The economic point is that globalisation has boosted trade and overall wealth, but it has also created a dog eat dog world where western workers compete with, and lose jobs to, people far away who will do the work for much less. ..."
"... But neither Trump nor Farage have shown any evidence of how realistically they can recreate those jobs in the west. And realistically god knows how you keep the wealth free trade and globalisation brings but avoid losing the good jobs? At least the current mess has focused attention on the question and has said that patience has run out. ..."
"... Compared to the real economic problems, the identity politics is minor, but it is still an irritant that explains why this revolution is coming from the right not from the left. ..."
"... And what "age" has that been Roy? The "age" of: climate change, gangster bankers, tax heavens, illegal wars, nuclear proliferation, grotesque inequality, the prison industrial complex to cite just a few. That "age"? ..."
"... the right wing press detest one kind of liberalism, social liberalism, they hate that, but they love economic liberalism, which has done much harm to the working class. ..."
"... Most of the right wing press support austerity measures, slashing of taxes and, smaller and smaller governments. Yet apparently, its being socially liberal that is the problem ..."
A crucial point "WWC men aren't interested in working at McDonald's for $15 per hour instead
of $9.50. What they want is... steady, stable, full-time jobs that deliver a solid middle-class
life."
The economic point is that globalisation has boosted trade and overall wealth, but it has
also created a dog eat dog world where western workers compete with, and lose jobs to, people
far away who will do the work for much less.
But neither Trump nor Farage have shown any evidence of how realistically they can recreate
those jobs in the west. And realistically god knows how you keep the wealth free trade and globalisation
brings but avoid losing the good jobs? At least the current mess has focused attention on the
question and has said that patience has run out.
Compared to the real economic problems, the identity politics is minor, but it is still
an irritant that explains why this revolution is coming from the right not from the left.
If you're white and male it's bad enough losing your hope of economic security, but then to
be repeatedly told by the left that you're misogynist, racist, sexist, Islamophobic, transgenderphobic
etc etc is just the icing on the cake. If the author wants to see just how crazy identity politics
has become go to the Suzanne Moore piece from yesterday accusing American women of being misogynist
for refusing to vote for Hillary. That kind of maniac 'agree with me on everything or you're a
racist, sexist, homophobe' identity politics has to be ditched.
Reply
Funny, I've been a white male my whole life and not once have I been accused of being a misogynist,
racist, sexist, Islamophobic, or transgenderphobic. I didn't think being a white male was so difficult
for some people...
Reply
"Are we turning our backs on the age of enlightenment?".
And what "age" has that been Roy? The "age" of: climate change, gangster bankers, tax heavens,
illegal wars, nuclear proliferation, grotesque inequality, the prison industrial complex to cite
just a few. That "age"?
I agree hardly an age of enlightenment. My opinion... the so called Liberal Elite are responsible
for many of the issues in the list. The poor and the old in this country are not being helped
by the benefits system. Yet the rich get richer beyond the dreams of the ordinary man.
I would
pay more tax if I thought it might be spent more wisely...but can you trust politicians who are
happy to spend 50 billion on a railway line that 98% of the population will never use.
No solutions from me ...an old hippy from the 60s "Love and peace man " ...didn't work did
it :)
I have come under the impression that the right wing press detest one kind of liberalism,
social liberalism, they hate that, but they love economic liberalism, which has done much harm
to the working class.
Most of the right wing press support austerity measures, slashing of taxes and, smaller
and smaller governments. Yet apparently, its being socially liberal that is the problem.
"... "And even though neoliberals and international banks would have you believe otherwise, a fall in these money movements is entirely a good thing. As Ken Rogoff and Carmen Reinhart found in their study of 800 years of financial crises, high levels of international capital flows are correlated with more frequent and severe financial crises. Similarly, a 2010 Bank of International Settlements study by Claudio Borio and Petit Disyatat ascertained that cross border capital flows were over 60 times trade flows, meaning they had almost nothing to do with them. " ..."
"... I think it is apparent that the entire edifice of finance has been jiggered to benefit, Davos man and NO ONE ELSE. ..."
"... hy shouldn't Davos man want it to continue the aftermath was set right for the 0.1% remarkably fast in the aftermath of the Great Recession by HUGE infusions of government money, guarantees, credit, forbearance, etcetera which for some reason can NEVER be made available to the 90% ..."
"... This is probably the most salient reason Hillary lost, but it can never, ever be proffered as a reason for it would reveal that ALL our problems are due to the rich . ..."
"... I've often wondered how "The Multiplier Effect" of money, [not] circulating and recirculating in our local economies, at the consumer level, is affected by money sent out of the country by "immigrants"? ..."
"... Is this such a small amount as not to be considered part of "cross border capital flows"? How does it affect local economies that are more important to us than what happens on Wall Street? ..."
m'kay so kind of like robbing peter (emerging markets with growth potential) to pay paul (goldman
et.al.) until peter goes broke (asset bubble collapse) so paul can't be paid until he "natural"
growth potential of emerging markets recovers (peters growth potential recovers from the asset
bubble/debt overhang with best performance to those with more flexible currency) so that paying
paul (new grifts, oops financial innovations) can be foisted on them again leading to, in hindsight
only of course, and notably after paul has been paid, another collapse? rinse and repeat .is there
any sense to this postulation?
Why do you use the term 'capital' when referring to credit/lending that is not related to economically
real outputs. The rest of the article tells this story but the lead groups it all as 'capital'
flows.
This is an editorial suggestion really one that does not conflate or mislead when treating
credit creation used for financial asset trading as if it were the same general thing as FDI,
that is, direct investment.
We have seen the financial system react to the crisis by recognizing their own unhinged behavior,
and doing much less of it for good reasons. They know their credit creating behavior was nit coverting
Savings into Investment, they know it was not 'capital' so editors, let us help our writers
to bring more clarity.
I agree. We need a separate word for 'financial capital'. I am thinking 'ante' or 'stake' or
some similar word from the world of gambling and confidence tricks.
"And even though neoliberals and international banks would have you believe otherwise, a fall
in these money movements is entirely a good thing. As Ken Rogoff and Carmen Reinhart found in
their study of 800 years of financial crises, high levels of international capital flows are correlated
with more frequent and severe financial crises. Similarly, a 2010 Bank of International Settlements
study by Claudio Borio and Petit Disyatat ascertained that cross border capital flows were over
60 times trade flows, meaning they had almost nothing to do with them. "
This is probably something that not one in 10,000 people understand (I don't really either)
but I think it is apparent that the entire edifice of finance has been jiggered to benefit, Davos
man and NO ONE ELSE. And why shouldn't Davos man want it to continue the aftermath was set right
for the 0.1% remarkably fast in the aftermath of the Great Recession by HUGE infusions of government
money, guarantees, credit, forbearance, etcetera which for some reason can NEVER be made available
to the 90%
This is probably the most salient reason Hillary lost, but it can never, ever be proffered
as a reason for it would reveal that ALL our problems are due to the rich .
I've often wondered how "The Multiplier Effect" of money, [not] circulating and recirculating
in our local economies, at the consumer level, is affected by money sent out of the country by
"immigrants"?
Is this such a small amount as not to be considered part of "cross border capital flows"?
How does it affect local economies that are more important to us than what happens on Wall Street?
"... As of September 2016, 4 counties produced 90.1% of all the Bakken/Three Forks oil production in North Dakota: McKenzie, Mountrail, Williams and Dunn. Relative to December 2014, North Dakota Bakken/Three Forks oil production is off 243,098 b/d relative to December 2014 while the number of producing wells is up 1861 based upon data from the state. ..."
"... This shows well density and production from last September. The distance is concentric from a "production centre of gravity" i.e. weighted average by production for all wells. The core area ("sweet spot") is a circle of about 50 to 60 kms only (it's squashed out a bit to the west and missing a bite in the SW). Maximum well density (and with the best wells is 120 to 160 acres, and falls off quickly outside the core. The core is getting saturated. ..."
"... "U.S. drilling activity is increasingly concentrated in the Permian Basin . The Permian now holds nearly as many active oil rigs as the rest of the United States combined, including both onshore and offshore rigs, and it is the only region in EIA's Drilling Productivity Report where crude oil production is expected to increase for the third consecutive month." ..."
"... "Several of the larger M&A deals involved Permian Basin assets, where drilling and production is beginning to increase. Based on data through November 10, the second half of 2016 already has more M&A spending than the first half of 2016, but on fewer deals. The 93 M&A announcements in the third quarter of 2016 totaled $16.6 billion, for an average of $179 million per deal, the largest per deal average since the third quarter of 2014. Although only 11 of the 49 deals so far in the fourth quarter of 2016 are in the Permian Basin, they accounted for more than half of total deal value." ..."
The number of rail cars hauling petroleum is a constant in the range of 7,200 to 7,400
petroleum cars hauled each week for a good six months now.
Seems as though petroleum by rail is more of a necessity than a choice.
The volume is down a good thirty percent since about 2013 when over 10,000 cars were
hauled per week.
Demand decreases, contracts expire, better modes of transport emerge and cost less. not
as much call for Bakken oil. Plenty of the stuff somewhere else in this world.
The trend is down, not up for petroleum hauled by rail.
If there were orders for Bakken oil for one million bpd, the production would be one
million bpd. Bakken oil lost marketshare due to price drop. Buyers can buy oil from
anywhere.
More Bakken petroleum is being moved by pipeline. Over the whole rail system, petroleum
and petroleum product rail car loadings were down to 10.5 thousand in September. That
compares to a high point of 16.3 thousand railcars in Sept of 2014.
Coal car loadings are on the rise, from a low of 61,000 in April to 86,000 in Sept.
Coal was running a near steady 105,00 to 110,000 railcars every month in 2013 and 2014.
The chart below from RBN shows that Bakken pipeline capacity did not increase since
early 2015. But production dropped, and this primarily affected volumes of Bakken oil
transported by rail.
Given the higher percentage of oil transported by pipelines, the average
transportation cost for Bakken crude should have decreased. Interesting, however,
that the price differential between the well-head Bakken sweet crude and WTI has
remained within the $10-12/bbl range.
Bakken Crude Production and Takeaway Capacity
Source: RBN
Bakken Blend differentials at terminals close to North Dakota wellheads held their
lowest assessment since December Tuesday, closing at the calendar-month average of
the NYMEX light sweet crude oil contract (WTI CMA) minus $6.25/b.
While one factor dragging on Bakken differentials has clearly been a tight Brent/WTI
spread - trading around 42 cents/b Tuesday, well in from the steady $2/b seen this
summer - the return of Louisiana Light Sweet to the Midwest market may also be having
an impact, according to traders.
One trader said there was an increase in volumes heading up the Capline pipeline,
however, differentials suggest LLS is still too expensive, at least compared to
Bakken. Platts assessed LLS at WTI plus $1.15/b Tuesday.
Considered by some to be the "champagne of crudes," it is unclear what appeal LLS
still has for a Midwest refiner as margins for LLS actually - and unusually - lag
those for Bakken.
S&P Global Platts data shows LLS cracking margins in the Midwest closed at $3.30/b
Monday, compared to Bakken cracking margins of $6.37/b. In fact, the advantage of
cracking Bakken has grown steadily since August.
Platts margin data reflects the difference between a crude's netback and its spot
price.
Netbacks are based on crude yields, which are calculated by applying Platts
product price assessments to yield formulas designed by Turner, Mason & Co.
What is clear however, is that the steeper discounts available for Bakken provide
the biggest incentive for a Midwest refiner.
The cost of getting Bakken to this market is around $3.48/b, according to Platts
netback calculations, compared to just $1.02/b for LLS.
These costs make up a significant portion of the Bakken discount.
Further, LLS moving up the Capline after many years of relative inactivity does
not necessarily suggest a new trend is in the making. However, recent pipeline
reversals between Texas and Louisiana mean more Permian crudes are capable of
reaching Louisiana refineries, and thus, if priced accordingly, could displace
incremental volumes of LLS from its home market.
With current pipeline capacity out of North Dakota typically full, the marginal
Bakken barrel often gets to market via rail, and this cost has traditionally sets the
floor to Bakken's discount to WTI. And part of the recent downturn in Bakken could be
chalked up to an increase in railed volumes to the US Atlantic Coast, as Bakken
cracking margins there are again in the black.
In fact, Association of American Railroad's latest monthly and weekly data shows
crude and refined product rail movements appear to have bottomed, having grown in
September from August.
Weekly data bears this out as well, showing increases in three of the last four
weeks.
It remains to be seen how long this will last, however, should Energy Transfer
Partners Dakota Access Pipeline go ahead as planned.
Linefill for the pipeline could boost Bakken differentials, potentially making the
grade too expensive to rail east. However, the devil is in the details.
Traders and analysts have pegged Dakota Access pipeline tariffs between
$4.50-$5.50/b for uncommitted shippers between North Dakota and Patoka, Illinois. A
further $6.50/b would be needed to bring the crude south from Patoka to Nederland,
Texas, sources have said.
If this $11-$12/b combined pipeline estimated cost were to pan out, it would be
more expensive than the $10.20/b Platts assumes in its Bakken USAC rail-based netback
calculation.
Oil rig count in the Permian is up 73.5% from this year's low the biggest increase
among all US basins.
It is still only 41% of October 2014 peak, but this is much better than the Bakken and
especially the Eagle Ford where drilling activity remains depressed.
As of September 2016, 4 counties produced 90.1% of all the Bakken/Three
Forks oil production in North Dakota: McKenzie, Mountrail, Williams and Dunn.
Relative to December 2014, North Dakota Bakken/Three Forks oil production is off
243,098 b/d relative to December 2014 while the number of producing wells is up 1861
based upon data from the state.
Based upon state data, the number of producing wells/square mile is 1.29 in
Mountrail County, 1.22 in McKenzie County, 1.02 in Willams County, and 0.86 in Dunn
County. How high can the number of producing wells/square mile go?
Is there something more than reduced drilling to explain the drop in production?
This shows well density and production from last September. The distance is
concentric from a "production centre of gravity" i.e. weighted average by
production for all wells. The core area ("sweet spot") is a circle of about 50 to
60 kms only (it's squashed out a bit to the west and missing a bite in the SW).
Maximum well density (and with the best wells is 120 to 160 acres, and falls off
quickly outside the core. The core is getting saturated.
"U.S. drilling activity is increasingly concentrated in
the Permian Basin . The Permian now holds nearly as many active oil rigs as the rest of
the United States combined, including both onshore and offshore rigs, and it is the only
region in EIA's Drilling Productivity Report where crude oil production is expected to
increase for the third consecutive month."
Permian Basin also dominates M&A activity in the US E&P sector.
From the same EIA
report:
"Several of the larger M&A deals involved Permian Basin assets, where drilling
and production is beginning to increase.
Based on data through November 10, the second half of 2016 already has more M&A spending
than the first half of 2016, but on fewer deals. The 93 M&A announcements in the third
quarter of 2016 totaled $16.6 billion, for an average of $179 million per deal, the
largest per deal average since the third quarter of 2014. Although only 11 of the 49
deals so far in the fourth quarter of 2016 are in the Permian Basin, they accounted for
more than half of total deal value."
"... The FED oil production number for October came out yesterday. In below chart the production decline (blue line) is the same as in the previous month, yet the trend is still a massive decline year over year. In my view year over year comparison can show the dynamic of a trend. And it shows clearly that in the current cycle the oil price recovery is in contrast to the cycle in 2008/9 very slow and tentative. ..."
"... This indicates that most Middle East producers still have high margins at the current oil price. [-- produced may be by states no] ..."
"... Middle East producers and also Russia can quite easily cope with an oil price of 40 +/- 10 USD per barrel. This is why I think that the oil price will bounce at the bottom of the barrel within above range for a few years. ..."
"... He who has the market share now, will cash in when the oil price rises. And it will rise, yet not until something breaks. This is how business works. This is how Microsoft crushed Apple in the nineties in the PC market and Apple then crushed Nokia in the smart phone market . ..."
"... I do not think that Saudi Arabia has the freedom to compromise here even if they want. If they blink they will be crushed by shale producers. So, the stand-off will go on for a while, at a loose-loose situation for both parties. However this is great luck for consumers as they can enjoy low energy prices for 2 to 3 years. ..."
The FED oil production number for October came out yesterday. In below chart the production decline
(blue line) is the same as in the previous month, yet the trend is still a massive decline year over
year. In my view year over year comparison can show the dynamic of a trend. And it shows clearly
that in the current cycle the oil price recovery is in contrast to the cycle in 2008/9 very slow
and tentative.
The year over year oil price (green line in below chart) actually decreased again year over year
and the risk of a double dip in the oil price is growing by the day. Drilling follows very cautiously
the oil price in a parallel line (red line in below chart). If there would be really a technological
advantage for shale, the red and the green line would not be paralell, but the red line for drilling
would rise much stronger. This is actually the case for Middle East drilling, which barely fell during
this cycle.
This indicates that most Middle East producers still have high margins at the current
oil price. [-- produced may be by states no]
Middle East producers and also Russia can quite easily cope with an oil price of 40 +/-
10 USD per barrel. This is why I think that the oil price will bounce at the bottom of the barrel
within above range for a few years.
There is also something interesting going on with the world economy. The shippers rose exponentionally
over the last few days (DRYS up over 1000%). Also the baltic Dry index is up 600% since the beginning
of this year. House prices here in London fell mostly at the high end. Rents for expensive homes
are down by up to 36%. Donald Trump has clearly changed something already as it becomes increasingly
clear that the dollar hoarders are paying for the infrastructure spending. I am not sure if he understands
that he is doing a lot of harm to his own business empire as well.
I expect if that depressing old banker were here he would note that instability is dangerous,
and that all the moves in treasuries currency and possibly trade flow create changes of which
the results are difficult or impossible to predict
I can easily understand your assertion that Middle Eastern and Russian oil is profitable
at forty bucks. But if the price is to stay around forty, then it follows that you think that
between them, the producers in the Middle East and Russia will be able to supply all the oil
the world wants for the next few years. Am I correct in saying this?
Do you think western producers will continue to pump enough at a loss ( most of them are
apparently losing money at forty bucks ) to make up the difference?
The US has thrown the gauntlet to OPEC by claiming to becoming an oil net
exporter. This has brought OPEC in a very difficult situation. If they cut and oil gets
to 70 USD per barrel shale will pick up the slack and produce the amount OPEC has cut
within a short period of time. So, OPEC is forced to cut again, until it has lost a lot
of market share and thus also a lot of revenue.
In my view OPEC has no other choice than to produce come hell and water until something
breaks. This could be that many shale companies give up or that for instance Iran is not
allowed to export as much as they do, or there is a major conflict in the Middle East, or
Saudi Arabia is running out of cash ..
He who has the market share now, will cash in when the oil price rises. And it will
rise, yet not until something breaks. This is how business works. This is how Microsoft
crushed Apple in the nineties in the PC market and Apple then crushed Nokia in the smart
phone market .
I do not think that Saudi Arabia has the freedom to compromise here even if they
want. If they blink they will be crushed by shale producers. So, the stand-off will go on
for a while, at a loose-loose situation for both parties. However this is great luck for
consumers as they can enjoy low energy prices for 2 to 3 years.
"... Right now there are as many rigs running drilling this rock formation as there are in the rest of the country combined, so it is already baked in to the US production data. This is not like a Saudi Arabia field with a low drill and complete and development cost, it will take many billions of drilling capital to get a small percentage of the oil in place. The big deal is that the area is fairly resilient to low oil prices and will cushion the drop in US production due to lack of investment in other basins. ..."
"... The USGS lost all credibility with me as to estimating TRR in the Monterrey Shale in California. It baffles me, after five years of publically discussing unconventional shale oil resources, that modelers, internet analysts and predictors completely ignore economics, debt and finances. Extracting oil is a business; it must make money to succeed. If it does not succeed, all bets are off regarding predictions. ..."
I am a petroleum Geologist drilling wells in the Wolfcamp, the USGS report means
nothing. They periodically review basins to assess how much petroleum is there, we have
been drilling Horizontal wells in the Wolfcamp for almost a decade, and vertical wells
for many decades.
Right now there are as many rigs running drilling this rock
formation as there are in the rest of the country combined, so it is already baked in to
the US production data. This is not like a Saudi Arabia field with a low drill and
complete and development cost, it will take many billions of drilling capital to get a
small percentage of the oil in place. The big deal is that the area is fairly resilient
to low oil prices and will cushion the drop in US production due to lack of investment
in other basins.
Thank you, JG -- Straight from the horses mouth, respectfully.
The USGS lost all
credibility with me as to estimating TRR in the Monterrey Shale in California. It
baffles me, after five years of publically discussing unconventional shale oil
resources, that modelers, internet analysts and predictors completely ignore
economics, debt and finances. Extracting oil is a business; it must make money to
succeed. If it does not succeed, all bets are off regarding predictions.
The Monterrey shale estimate was by the EIA not the USGS. The EIA had a private
consultant do the analysis and it was mostly based on investor presentations, very little
geological analysis.
It would be better if the USGS did an economic analysis as they do with coal for the
Powder River Basin. They could develop a supply curve based on current costs, but they
don't.
Do you have any idea of the capital cost of the wells (ballpark guess) for a horizontal
multifracked well in the Wolfcamp? Would $7 million be about right (a WAG by me)?
On ignoring economics, I show my oil price assumptions. Other financial assumptions for
the Bakken are $8 million for capital cost of the well (2016$). OPEX=$9/b, other
costs=$5/b, royalty and taxes=29% of gross revenue, $10/b transport cost, and a real
discount rate of 7% (10% nominal discount rate assuming 3% inflation).
I do a DCF based on my assumed real oil price curve. Brent oil price rises to $77/b
(2016$) by June 2017 and continue to rise at 17% per year until Oct 2020 when the oil price
reaches $130/b, it is assumed that average oil prices remain at that level until Dec 2060.
The last well is drilled in Dec 2035 and stops producing 25 years later in Dec 2060.
EUR of wells today is assumed to be 321 kb and EUR falls to 160 kb by 2035. The last
well drilled only makes $243,000 over the 7% real rate of return, so the 9 Gb scenario is
probably too optimistic, it is assumed that any gas sales are used to offset OPEX and other
costs, though no natural gas price assumptions have been made to simplify the analysis.
This analysis is based on the analyses that Rune Likvern has done in the past, though
his analyses are far superior to my own.
Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make
the Rich Richer
By Dean Baker
Introduction: Trading in Myths
In winter 2016, near the peak of Bernie Sanders' bid for the Democratic presidential
nomination, a new line became popular among the nation's policy elite: Bernie Sanders is
the enemy of the world's poor. Their argument was that Sanders, by pushing trade policies
to help U.S. workers, specifically manufacturing workers, risked undermining the well-being
of the world's poor because exporting manufactured goods to the United States and other
wealthy countries is their path out of poverty. The role model was China, which by
exporting has largely eliminated extreme poverty and drastically reduced poverty among its
population. Sanders and his supporters would block the rest of the developing world from
following the same course.
This line, in its Sanders-bashing permutation, appeared early on in Vox, the
millennial-oriented media upstart, and was quickly picked up elsewhere (Beauchamp 2016).
After all, it was pretty irresistible. The ally of the downtrodden and enemy of the rich
was pushing policies that would condemn much of the world to poverty.
The story made a nice contribution to preserving the status quo, but it was less
valuable if you respect honesty in public debate.
The problem in the logic of this argument should be apparent to anyone who has taken an
introductory economics course. It assumes that the basic problem of manufacturing workers
in the developing world is the need for someone who will buy their stuff. If people in the
United States don't buy it, then the workers will be out on the street and growth in the
developing world will grind to a halt. In this story, the problem is that we don't have
enough people in the world to buy stuff. In other words, there is a shortage of demand. But
is it really true that no one else in the world would buy the stuff produced by
manufacturing workers in the developing world if they couldn't sell it to consumers in the
United States? Suppose people in the developing world bought the stuff they produced
raising their living standards by raising their own consumption.
That is how the economics is supposed to work. In the standard theory, general shortages
of demand are not a problem. Economists have traditionally assumed that economies tended
toward full employment. The basic economic constraint was a lack of supply. The problem was
that we couldn't produce enough goods and services, not that we were producing too much and
couldn't find anyone to buy them. In fact, this is why all the standard models used to
analyze trade agreements like the Trans-Pacific Partnership assume trade doesn't affect
total employment. Economies adjust so that shortages of demand are not a problem.
In this standard story (and the Sanders critics are people who care about textbook
economics), capital flows from slow-growing rich countries, where it is relatively
plentiful and so gets a low rate of return, to fast-growing poor countries, where it is
scarce and gets a high rate of return.
[Figure 1-1] Theoretical and actual capital flows.
So the United States, Japan, and the European Union should be running large trade
surpluses, which is what an outflow of capital means. Rich countries like ours should be
lending money to developing countries, providing them with the means to build up their
capital stock and infrastructure while they use their own resources to meet their people's
basic needs.
This wasn't just theory. That story accurately described much of the developing world,
especially Asia, through the 1990s. Countries like Indonesia and Malaysia were experiencing
rapid annual growth of 7.8 percent and 9.6 percent, respectively, even as they ran large
trade deficits, just over 2 percent of GDP each year in Indonesia and almost 5 percent in
Malaysia.
These trade deficits probably were excessive, and a crisis of confidence hit East Asia
and much of the developing world in the summer of 1997. The inflow of capital from rich
countries slowed or reversed, making it impossible for the developing countries to sustain
the fixed exchange rates most had at the time. One after another, they were forced to
abandon their fixed exchange rates and turn to the International Monetary Fund (IMF) for
help.
Rather than promulgating policies that would allow developing countries to continue the
textbook development path of growth driven by importing capital and running trade deficits,
the IMF made debt repayment a top priority. The bailout, under the direction of the Clinton
administration Treasury Department, required developing countries to switch to large trade
surpluses (Radelet and Sachs 2000, O'Neil 1999).
The countries of East Asia would be far richer today had they been allowed to continue
on the growth path of the early and mid-1990s, when they had large trade deficits. Four of
the five would be more than twice as rich, and the fifth, Vietnam, would be almost 50
percent richer. South Korea and Malaysia would have higher per capita incomes today than
the United States.
[Figure 1-2] Per capita income of East Asian countries, actual vs. continuing on 1990s
growth path.
In the wake of the East Asia bailout, countries throughout the developing world decided
they had to build up reserves of foreign exchange, primarily dollars, in order to avoid
ever facing the same harsh bailout terms as the countries of East Asia. Building up
reserves meant running large trade surpluses, and it is no coincidence that the U.S. trade
deficit has exploded, rising from just over 1 percent of GDP in 1996 to almost 6 percent in
2005. The rise has coincided with the loss of more than 3 million manufacturing jobs,
roughly 20 percent of employment in the sector.
There was no reason the textbook growth pattern of the 1990s could not have continued.
It wasn't the laws of economics that forced developing countries to take a different path,
it was the failed bailout and the international financial system. It would seem that the
enemy of the world's poor is not Bernie Sanders but rather the engineers of our current
globalization policies.
There is a further point in this story that is generally missed: it is not only the
volume of trade flows that is determined by policy, but also the content. A major push in
recent trade deals has been to require stronger and longer patent and copyright protection.
Paying the fees imposed by these terms, especially for prescription drugs, is a huge burden
on the developing world. Bill Clinton would have much less need to fly around the world for
the Clinton Foundation had he not inserted the TRIPS (Trade Related Aspects of Intellectual
Property Rights) provisions in the World Trade Organization (WTO) that require developing
countries to adopt U.S.-style patent protections. Generic drugs are almost always cheap -
patent protection makes drugs expensive. The cancer and hepatitis drugs that sell for tens
or hundreds of thousands of dollars a year would sell for a few hundred dollars in a free
market. Cheap drugs would be more widely available had the developed world not forced TRIPS
on the developing world.
Of course, we have to pay for the research to develop new drugs or any innovation. We
also have to compensate creative workers who produce music, movies, and books. But there
are efficient alternatives to patents and copyrights, and the efforts by the elites in the
United States and other wealthy countries to impose these relics on the developing world is
just a mechanism for redistributing income from the world's poor to Pfizer, Microsoft, and
Disney. Stronger and longer patent and copyright protection is not a necessary feature of a
21st century economy.
In textbook trade theory, if a country has a larger trade surplus on payments for
royalties and patent licensing fees, it will have a larger trade deficit in manufactured
goods and other areas. The reason is that, in theory, the trade balance is fixed by
national savings and investment, not by the ability of a country to export in a particular
area. If the trade deficit is effectively fixed by these macroeconomic factors, then more
exports in one area mean fewer exports in other areas. Put another way, income gains for
Pfizer and Disney translate into lost jobs for workers in the steel and auto industries....
It includes this interesting piece on international trade:
"I'll start with my favorite, the complaint that the trade policy advocating by Warren
and Sanders would hurt the poor in the developing world, or to use their words:
"And their ostensible protection of American workers leaves no room to consider the welfare
of poor people elsewhere in the world."
I like this one because it turns standard economic theory on its head to advance the
interests of the rich and powerful. In the economic textbooks, rich countries like the
United States are supposed to be exporting capital to the developing world. This provides
them the means to build up their capital stock and infrastructure, while maintaining the
living standards of their populations. This is the standard economic story where the
problem is scarcity.
But to justify trade policies that have harmed tens of millions of U.S. workers, either
by costing them jobs or depressing their wages, the Post discards standard economics and
tells us the problem facing people in the developing world is that there is too much stuff.
If we didn't buy the goods produced in the developing world then there would just be a
massive glut of unsold products.
In the standard theory the people in the developing world buy their own stuff, with rich
countries like the U.S. providing the financing. It actually did work this way in the
1990s, up until the East Asian financial crisis in 1997. In that period, countries like
Malaysia, Vietnam, and Indonesia were growing very rapidly while running large trade
deficits. This pattern of growth was ended by the terms of the bailout imposed on these
countries by the U.S. Treasury Department through the International Monetary Fund.
The harsh terms of the bailout forced these and other developing countries to reverse
the standard textbook path and start running large trade surpluses. This post-bailout
period was associated with slower growth for these countries. In other words, the poor of
the developing world suffered from the pattern of trade the Post advocates. If they had
continued on the pre-bailout path they would be much richer today. In fact, South Korea and
Malaysia would be richer than the United States if they had maintained their pre-bailout
growth rate over the last two decades. (This is the topic of the introduction to my new
book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make
the Rich Richer, it's free.)"
Not sure that I fully agree with him, but I do agree that trade imbalances and
mercantilism is a large part of the problem.
The Washington Post editorial page decided to lecture readers * on the meaning of
progressivism. Okay, that is nowhere near as bad as a Trump presidency, but really, did we
need this?
The editorial gives us a potpourri of neo-liberal (yes, the term is appropriate here)
platitudes, all of which we have heard many times before and are best half true. For
framing, the villains are Bernie Sanders and Elizabeth Warren who it tells us "are
embracing principles that are not genuinely progressive."
I'll start with my favorite, the complaint that the trade policy advocating by Warren
and Sanders would hurt the poor in the developing world, or to use their words:
"And their ostensible protection of American workers leaves no room to consider the
welfare of poor people elsewhere in the world."
I like this one because it turns standard economic theory on its head to advance the
interests of the rich and powerful. In the economic textbooks, rich countries like the
United States are supposed to be exporting capital to the developing world. This provides
them the means to build up their capital stock and infrastructure, while maintaining the
living standards of their populations. This is the standard economic story where the
problem is scarcity.
But to justify trade policies that have harmed tens of millions of U.S. workers, either
by costing them jobs or depressing their wages, the Post discards standard economics and
tells us the problem facing people in the developing world is that there is too much stuff.
If we didn't buy the goods produced in the developing world then there would just be a
massive glut of unsold products.
In the standard theory the people in the developing world buy their own stuff, with rich
countries like the U.S. providing the financing. It actually did work this way in the
1990s, up until the East Asian financial crisis in 1997. In that period, countries like
Malaysia, Vietnam, and Indonesia were growing very rapidly while running large trade
deficits. This pattern of growth was ended by the terms of the bailout imposed on these
countries by the U.S. Treasury Department through the International Monetary Fund.
The harsh terms of the bailout forced these and other developing countries to reverse
the standard textbook path and start running large trade surpluses. This post-bailout
period was associated with slower growth for these countries. In other words, the poor of
the developing world suffered from the pattern of trade the Post advocates. If they had
continued on the pre-bailout path they would be much richer today. In fact, South Korea and
Malaysia would be richer than the United States if they had maintained their pre-bailout
growth rate over the last two decades. (This is the topic of the introduction to my new
book, "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to
Make the Rich Richer," ** it's free.)
It is also important to note that the Post is only bothered by forms of protection that
might help working class people. The United States prohibits foreign doctors from
practicing in the United States unless they complete a U.S. residency program. (The total
number of slots are tightly restricted with only a small fraction open to foreign trained
doctors.) This is a classic protectionist measure. No serious person can believe that the
only way for a person to be a competent doctor is to complete a U.S. residency program. It
costs the United States around $100 billion a year ($700 per family) in higher medical
expenses. Yet, we never hear a word about this or other barriers that protect the most
highly paid professionals from the same sort of international competition faced by
steelworkers and textile workers.
Moving on, we get yet another Post tirade on Social Security.
"You can expand benefits for everyone, as Ms. Warren favors. Prosperous retirees who
live mostly off their well-padded 401(k)s will appreciate what to them will feel like a
small bonus, if they notice it. But spreading wealth that way will make it harder to find
the resources for the vulnerable elderly who truly depend on Social Security.
"But demographics - the aging of the population - cannot be wished away. In the 1960s,
about five taxpayers were helping to support each Social Security recipient, and the
economy was growing about 6 percent annually. Today there are fewer than three workers for
each pensioner, and the growth rate even following the 2008 recession has averaged about 2
percent . On current trends, 10 years from now the federal government will be spending
almost all its money on Medicare, Social Security and other entitlements and on interest
payments on the debt, leaving less and less for schools, housing and job training. There is
nothing progressive about that."
There are all sorts of misleading or wrong claims here. First, the economy did not grow
"about 6 percent annually" in the 1960s. There were three years in which growth did exceed
6.0 percent, and it was a very prosperous decade, but growth only averaged 4.6 percent from
1960 to 1970.
I suppose we should be happy that the Post is at least getting closer to the mark. A
2007 editorial *** praising The North American Free Trade Agreement told readers that
Mexico's GDP "has more than quadrupled since 1987." The International Monetary Fund data
**** put the gain at 83 percent. So by comparison, they are doing pretty good with the 6
percent growth number for the sixties.
But getting to the demographics, we did go from more than five workers for every retiree
to less than three today, and this number is projected to fall further to around 2.0
workers per retiree in the next fifteen years. This raises the obvious question, so what?
The economy did not collapse even as we saw the fall from 5 workers per retiree to less
than 3, so something really really bad happens when it falls further? We did raise taxes to
cover the additional cost and we will probably have to raise taxes in the future.
We get that the Post doesn't like tax increases (no one does), but this hardly seems
like the end of the world. The Social Security Trustees project ***** that real wages will
rise on average by more than 34 percent over the next two decades. Suppose we took back
510 percent of these projected wage gains through tax increases (still leaving workers
with wages that are more than 30 percent higher than they are today), what is the big
problem?
Of course most workers have not seen their wages rise in step with the economy's growth
over the last four decades. This is a huge issue which is the sort of thing that
progressives should be and are focusing on. But the Post would rather distract us with the
possibility that at some point in the future we may be paying a somewhat higher Social
Security tax.
The Post's route for savings is also classic misdirection. It tells how about
high-living seniors who get so much money from their 401(k)s they don't even notice their
Social Security checks. Only a bit more than 4.0 percent of the over 65 population has
non-Social Security income of more than $80,000 a year. If the point is to have substantial
savings from means-testing it would be necessary to hit people with incomes around $40,000
a year or even lower. That is not what most people consider wealthy.
We could have substantial savings on Medicare by pushing down the pay of doctors and
reducing the prices of drugs and medical equipment. The latter could be done by
substituting public financing for research and development for government granted patent
monopolies (also discussed in Rigged). These items would almost invariably be cheap in a
free market. But the Post seems uninterested in ways to save money that could affect the
incomes of the rich.
One can quibble with whether the current benefits for middle income people are right or
should be somewhat higher or lower, but it is ridiculous to argue that raising them $50 a
month, as proposed by Senator Warren, will break the bank.
Then we have the issue of free college. The Post raises the issue, pushed by Senator
Sanders in his presidential campaign, and then tells readers:
"Our answer - we would argue, the progressive answer - is that there are people in
society with far greater needs than that upper-middle-class family in Fairfax County that
would be relieved of its tuition burden at the College of William & Mary if Mr. Sanders got
his wish."
There are two points to be made here. First there is extensive research ****** showing
that many children from low- and moderate-income families hugely over-estimate the cost of
college, failing to realize that they would be eligible for financial aid that would make
it free or nearly free. This means that the current structure is preventing many relatively
disadvantaged children from attending college. Arguably better education on the
opportunities to get aid would solve this problem, but the problem has existed for a long
time and better education has not done much to change the picture thus far.
The second point is that the process of determining eligibility for aid is itself
costly. Many children have divorced parents, with a non-custodial parent often not anxious
to pay for their children's college. Perhaps it is appropriate that they should pay, but
forcing payment is not an easy task and it doesn't make sense to make the children in such
situations suffer.
In many ways, the free college solution is likely to be the easiest, with the tax coming
out of the income of higher earners, the vast majority of whom will be the beneficiaries of
this policy. There are ways to save on paying for college. My favorite is limiting the pay
of anyone at a public school to the salary of the president of the United States ($400,000
a year). We can also deny the privilege of tax exempt status to private universities or
other non-profits that don't accept a similar salary cap. These folks can pay their top
executives whatever they want, but they shouldn't ask the taxpayers to subsidize their
exorbitant pay packages.
There is one final issue in the column worth noting. At one point it makes a pitch for
the virtues of economic growth then tells readers:
"It's not in conflict with the goal of redistribution."
At least some of us progressive types are not particularly focused on "redistribution."
The focus of my book and much of my other writing is on the way that the market has been
structured to redistribute income upward, compared with the structures in place in the
quarter century after World War II. Is understandable that people who are basically very
satisfied with this upward redistribution of market income would not want this rigging of
the market even to be discussed, but serious progressives do.
Although I like much of what
Dean Baker, I don't like his term "loser liberalism", nor do I think his de-emphasis on
redistribution useful. Au contraire, I think talking about redistribution is absolutely
essential if we are to move to sustainable world. We can no longer be certain that per
person GDP growth will be sufficient to be able to ignore distribution or to rely on
"predistribution".
The End of Loser Liberalism: Making Markets Progressive
By Dean Baker
Upward Redistribution of Income: It Didn't Just Happen
Money does not fall up. Yet the United States has experienced a massive upward
redistribution of income over the last three decades, leaving the bulk of the workforce
with little to show from the economic growth since 1980. This upward redistribution was not
the result of the natural workings of the market. Rather, it was the result of deliberate
policy, most of which had the support of the leadership of both the Republican and
Democratic parties.
Unfortunately, the public and even experienced progressive political figures are not
well informed about the key policies responsible for this upward redistribution, even
though they are not exactly secrets. The policies are so well established as conventional
economic policy that we tend to think of them as incontrovertibly virtuous things, but each
has a dark side. An anti-inflation policy by the Federal Reserve Board, which relies on
high interest rates, slows growth and throws people out of work. Major trade deals hurt
manufacturing workers by putting them in direct competition with low-paid workers in the
developing world. A high dollar makes U.S. goods uncompetitive in world markets.
Almost any economist would acknowledge these facts, but few economists have explored
their implications and explained them to the general public. As a result, most of us have
little understanding of the economic policies that have the largest impact on our jobs, our
homes, and our lives. Instead, public debate and the most hotly contested legislation in
Congress tend to be about issues that will have relatively little impact.
This lack of focus on crucial economic issues is a serious problem from the standpoint
of advancing a progressive agenda....
Years of low interest rates and quantitative easing have not restored
growth to developed countries, and many observers lately have been calling on central banks to
inject stimulus into economies directly. But do the rewards of "helicopter money" outweigh the
risks?
ZURICH The world has been on pins and needles since Donald Trump's upset victory over
Hillary Clinton in the United States' presidential election last week. No one including,
perhaps, the president-elect himself quite knows what shape the next US administration will
take, or what its policy priorities will be.
Compounding this uncertainty is the fact that, around the world, geopolitical tensions are
rising, with developed economies continuing to experience tepid growth, even after years of
record-low interest rates. For Trump to stimulate enough activity in the US economy to satisfy
his zealous base, he will have to find the right balance between fiscal measures and
monetary-policy tools.
Whether Trump continues the post-1945 US tradition of international leadership, or instead
chooses an "America first" approach, he will not be alone in his quest for growth: Japan and
eurozone countries are also struggling to bring about sustainable recoveries and meet central
banks' inflation targets. Project Syndicate commentators have been at the forefront of the
ongoing debate about what policymakers can do to achieve these goals. In particular, while Trump
and policymakers elsewhere are embracing fiscal activism, how far they are willing or able to go
remains uncertain, raising the question of what more central banks could do to stimulate demand
and boost growth.
Spinning in Circles
The recent shift toward fiscal expansion reflects widespread agreement that policymakers are
running out of stimulus options. Central banks can no longer rely on "forward guidance," such as
half-promises that interest rates will remain low indefinitely. And quantitative easing (QE) is
quickly losing its potency, perhaps because it is inherently more effective as a crisis-response
mechanism than as a long-term fix.
"... Apparently lax and/or incompetent regulation of systemically important banks by bureaucrats, central bankers, and politicians may not be just a recent American phenomenon. ..."
"... He related how he was not only ignored by his bank, the Irish regulator but also all the major political parties. He then pointed out that the Irish regulator claims that it always and it is the law after all informs the regulator of the home country of banks which have subsidiaries in Ireland, about any serious problems. ..."
"... Mr Sugarman suggested Mr Draghi should be asked point-blank of he did or if he did not know . If he did not then the Irish regulator was at least incompetent, and may have lied, misled and perhaps even broken Irish laws. If he was told and did know, then Mr Draghi has serious questions to answer regarding his own dereliction of duty. ..."
Apparently lax and/or incompetent regulation of systemically important banks by bureaucrats, central
bankers, and politicians may not be just a recent American phenomenon.
As we read this, it could imperil the soundness of the financial system in Europe as well, as
is still apparently the case with The Banks in the states, despite assurances to the contrary.
Golem XIV asks some very good questions in the article below, recently posted on his blog
here.
Yesterday a very high-powered panel of international banking whistleblowers met and told their
stories in the European parliament . The questions raised were important. Among them was the Irish
Whistleblower, Jonathan Sugarman, who when UniCredit Ireland was breaking the law in very serious
ways reported it to the Irish regulator.
He related how he was not only ignored by his bank, the Irish regulator but also all the major
political parties. He then pointed out that the Irish regulator claims that it always and it
is the law after all informs the regulator of the home country of banks which have subsidiaries
in Ireland, about any serious problems.
In the case of UniCredit that would mean the Italian Central bank would have been told that
Italy's largest Bank was in serious breach of Irish law in ways that could endanger the whole
banking system. The head of the Italian Central Bank at the time was a certain Mr Mario Draghi.
Mr Sugarman suggested Mr Draghi should be asked point-blank of he did or if he did not know
. If he did not then the Irish regulator was at least incompetent, and may have lied, misled
and perhaps even broken Irish laws. If he was told and did know, then Mr Draghi has serious questions to answer regarding his own
dereliction of duty.
Surely not I hear you say. Well perhaps someone might ask him? Or is he above the law?
What is the Democratic Party's former constituency of labor and progressive reformers to do?
Are they to stand by and let the party be captured in Hillary's wake by Robert Rubin's Goldman
Sachs-Citigroup gang that backed her and Obama?
The 2016 election sounded the death knell for the identity politics. Its aim was to persuade
voters not to think of their identity in economic terms, but to think of themselves as women or
as racial and ethnic groups first and foremost, not as having common economic interests. This
strategy to distract voters from economic policies has obviously failed...
This election showed that voters have a sense of when they're being lied to. After eight years of
Obama's demagogy, pretending to support the people but delivering his constituency to his
financial backers on Wall Street. 'Identity politics' has given way to the stronger force of
economic distress. Mobilizing identity politics behind a Wall Street program will no longer
work."
President Barack Obama said Wednesday that America's election of Donald Trump and the U.K.'s
vote to leave the European Union reflect a political uprising in the West over economic
inequities spawned by leaders' mishandling of globalization.
"... Already, motor-vehicle manufacturers ship an automotive transmission back and forth across the US-Mexican border several times in the course of production. At some point, unpacking that production process still further will reach the point of diminishing returns. ..."
"... The story for cross-border flows of financial capital is even more dramatic. Gross capital flows the sum of inflows and outflows are not just growing more slowly; they are down significantly in absolute terms from 2009 levels. ..."
"... ... cross-border bank lending and borrowing that have fallen. Foreign direct investment financial flows to build foreign factories and acquire foreign companies remains at pre-crisis levels. ..."
"... This difference reflects regulation. Having concluded, rightly, that cross-border bank lending is especially risky, regulators clamped down on banks' international operations. ..."
Does Donald Trump's election as United States president mean that globalization is dead, or are
reports of the process' demise greatly exaggerated? If globalization is only partly incapacitated,
not terminally ill, should we worry? How much will slower trade growth, now in the offing, matter
for the global economy?
World trade growth would be slowing down, even without Trump in office. Its growth was already
flat in the first quarter of 2016, and it fell
by nearly 1% in the second quarter. This continues a prior trend: since 2010, global trade has
grown at an annual rate of barely 2%. Together with the fact that worldwide production of goods and
services has been rising by more than 3%, this means that the trade-to-GDP ratio has been falling,
in contrast to its steady upward march in earlier years.
... the resurgent protectionism manifest in popular opposition to the Trans-Pacific Partnership
(TPP) and the Transatlantic Trade and Investment Partnership (TTIP),
Causality in economics may be elusive, but in this case it is clear. So far, slower trade growth
has been the result of slower GDP growth, not the other way around.
This is particularly evident in the case of investment spending, which has
fallen sharply since
the global financial crisis. Investment spending is trade-intensive, because countries rely disproportionately
on a relatively small handful of producers, like Germany, for technologically sophisticated capital
goods.
In addition, slower trade growth reflects China's economic deceleration. Until 2011 China was
growing at double-digit rates, and Chinese exports and imports were growing even faster. China's
growth has now slowed by a third, leading to slower growth of Chinese trade.
China's growth miracle, benefiting a fifth of the earth's population, is the most important economic
event of the last quarter-century. But it can happen only once. And now that the phase of catch-up
growth is over for China, this engine of global trade will slow.
The other engine of world trade has been global supply chains. Trade in parts and components has
benefited from falling transport costs, reflecting containerization and related advances in logistics.
But efficiency in shipping is unlikely to continue to improve faster than efficiency in the production
of what is being shipped. Already, motor-vehicle manufacturers ship an automotive transmission
back and forth across the US-Mexican border several times in the course of production. At some point,
unpacking that production process still further will reach the point of diminishing returns.
The story for cross-border flows of financial capital is even more dramatic. Gross capital
flows the sum of inflows and outflows are not just growing more slowly; they are down significantly
in absolute terms from 2009 levels.
... cross-border bank lending and borrowing that have fallen. Foreign direct investment
financial flows to build foreign factories and acquire foreign companies remains at pre-crisis
levels.
This difference reflects regulation. Having concluded, rightly, that cross-border bank lending
is especially risky, regulators clamped down on banks' international operations.
In response, many banks curtailed their cross-border business. But, rather than alarming anyone,
this should be seen as reassuring, because the riskiest forms of international finance have been
curtailed without disrupting more stable and productive forms of foreign investment.
We now face the prospect of the US government revoking the Dodd-Frank Act and rolling back the
financial reforms of recent years. Less stringent financial regulation may make for the recovery
of international capital flows. But we should be careful what we wish for.
"... "Nearly half of young Americans start their working lives with student debt, and 43 million Americans carry student loans. A new study by the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business found that many borrowers are struggling to make student loan payments and regret their borrowing. ..."
"... GFLEC's newly published policy brief reports that most borrowers did not fully understand what they were taking on when they obtained student loans. Additionally, 54 percent of student loan holders did not try to figure out what their monthly payments would be before taking out loans. And 53 percent said that if they could go back and redo the process of taking out loans, they would do things differently. " ..."
Released earlier this week from George Washington University School of Business: "Study Finds
1 in 3 Student Loan Holders With Payments Due Are Late With Payments and More Than Half Regret
Their Borrowing"
"Nearly half of young Americans start their working lives with student debt, and 43 million
Americans carry student loans. A new study by the Global Financial Literacy Excellence Center
(GFLEC) at the George Washington University School of Business found that many borrowers are struggling
to make student loan payments and regret their borrowing.
GFLEC's newly published policy brief reports that most borrowers did not fully understand what
they were taking on when they obtained student loans. Additionally, 54 percent of student loan
holders did not try to figure out what their monthly payments would be before taking out loans.
And 53 percent said that if they could go back and redo the process of taking out loans, they
would do things differently. "
Odd. I was looking at the comment by Bannon about Spanish young adult unemployment (a serious
problem, as he says) and thinking, well, at least we don't have anything like that here.
No, our young adults aren't unemployed, are they? They are simply working to hand over major
parts of their future to their debt bosses.
And it really is so much better that way. After all, if ours were unemployed, they might take
to the streets like the Spaniards are doing.
"... For over a decade now, Chicago has been the epicenter of the fashionable trend of "privatization"-the transfer of the ownership or operation of resources that belong to all of us, like schools, roads and government services, to companies that use them to turn a profit. Chicago's privatization mania began during Mayor Richard M. Daley's administration, which ran from 1989 to 2011. Under his successor, Rahm Emanuel, the trend has continued apace. For Rahm's investment banker buddies, the trend has been a boon. For citizens? Not so much. ..."
"... the English word "privatization" derives from a coinage, Reprivatisierung, formulated in the 1930s to describe the Third Reich's policy of winning businessmen's loyalty by handing over state property to them. ..."
"... As president, Bill Clinton greatly expanded a privatization program begun under the first President Bush's Department of Housing and Urban Development. "Hope VI" aimed to replace public-housing high-rises with mixed-income houses, duplexes and row houses built and managed by private firms. ..."
"... The fan was Barack Obama, then a young state senator. Four years later, he cosponsored a bipartisan bill to increase subsidies for private developers and financiers to build or revamp low-income housing. ..."
"... However, the rush to outsource responsibility for housing the poor became a textbook example of one peril of privatization: Companies frequently get paid whether they deliver the goods or not (one of the reasons investors like privatization deals). For example, in 2004, city inspectors found more than 1,800 code violations at Lawndale Restoration, the largest privately owned, publicly subsidized apartment project in Chicago. Guaranteed a steady revenue stream whether they did right by the tenants or not-from 1997 to 2003, the project generated $4.4 million in management fees and $14.6 million in salaries and wages-the developers were apparently satisfied to just let the place rot. ..."
PGL on Chicago's parking meters. Yes Democratic Mayor Daley made a bad deal. If Trump does invest in infrastructure is this the kind of thing he'll be doing, selling off public
assets and leasing them back again, aka privatization?
Seems like two different things. Here's an In These Time article from January 2015 by the smart Rick Perlstein.
Welcome to Rahm Emanuel's Chicago, the privatized metropolis of the future.
BY RICK PERLSTEIN
In June of 2013, Chicago Mayor Rahm Emanuel made a new appointment to the city's seven-member
school board to replace billionaire heiress Penny Pritzker, who'd decamped to run President Barack
Obama's Department of Commerce. The appointee, Deborah H. Quazzo, is a founder of an investment firm
called GSV Advisors, a business whose goal-her cofounder has been paraphrased by Reuters as saying-is
to drum up venture capital for "an education revolution in which public schools outsource to private
vendors such critical tasks as teaching math, educating disabled students, even writing report cards."
GSV Advisors has a sister firm, GSV Capital, that holds ownership stakes in education technology
companies like "Knewton," which sells software that replaces the functions of flesh-and-blood teachers.
Since joining the school board, Quazzo has invested her own money in companies that sell curricular
materials to public schools in 11 states on a subscription basis.
In other words, a key decision-maker for Chicago's public schools makes money when school boards
decide to sell off the functions of public schools.
She's not alone. For over a decade now, Chicago has been the epicenter of the fashionable
trend of "privatization"-the transfer of the ownership or operation of resources that belong to all
of us, like schools, roads and government services, to companies that use them to turn a profit.
Chicago's privatization mania began during Mayor Richard M. Daley's administration, which ran from
1989 to 2011. Under his successor, Rahm Emanuel, the trend has continued apace. For Rahm's investment
banker buddies, the trend has been a boon. For citizens? Not so much.
They say that the first person in any political argument who stoops to invoking Nazi Germany automatically
loses. But you can look it up: According to a 2006 article in the Journal of Economic Perspectives,
the English word "privatization" derives from a coinage, Reprivatisierung, formulated in the
1930s to describe the Third Reich's policy of winning businessmen's loyalty by handing over state
property to them.
In the American context, the idea also began on the Right (to be fair, entirely independent of
the Nazis)-and promptly went nowhere for decades. In 1963, when Republican presidential candidate
Barry Goldwater mused "I think we ought to sell the TVA"-referring to the Tennessee Valley Authority,
the giant complex of New Deal dams that delivered electricity for the first time to vast swaths of
the rural Southeast-it helped seal his campaign's doom. Things only really took off after Prime Minister
Margaret Thatcher's sale of U.K. state assets like British Petroleum and Rolls Royce in the 1980s
made the idea fashionable among elites-including a rightward tending Democratic Party.
As president, Bill Clinton greatly expanded a privatization program begun under the first
President Bush's Department of Housing and Urban Development. "Hope VI" aimed to replace public-housing
high-rises with mixed-income houses, duplexes and row houses built and managed by private firms.
Chicago led the way. In 1999, Mayor Richard M. Daley, a Democrat, announced his intention to tear
down the public-housing high-rises his father, Mayor Richard J. Daley, had built in the 1950s and
1960s. For this "Plan for Transformation," Chicago received the largest Hope VI grant of any city
in the nation. There was a ration of idealism and intellectual energy behind it: Blighted neighborhoods
would be renewed and their "culture of poverty" would be broken, all vouchsafed by the honorable
desire of public-spirited entrepreneurs to make a profit. That is the promise of privatization in
a nutshell: that the profit motive can serve not just those making the profits, but society as a
whole, by bypassing inefficient government bureaucracies that thrive whether they deliver services
effectively or not, and empower grubby, corrupt politicians and their pals to dip their hands in
the pie of guaranteed government money.
As one of the movement's fans explained in 1997, his experience with nascent attempts to pay private
real estate developers to replace public housing was an "example of smart policy."
"The developers were thinking in market terms and operating under the rules of the marketplace,"
he said. "But at the same time, we had government supporting and subsidizing those efforts."
The fan was Barack Obama, then a young state senator. Four years later, he cosponsored a bipartisan
bill to increase subsidies for private developers and financiers to build or revamp low-income housing.
However, the rush to outsource responsibility for housing the poor became a textbook example
of one peril of privatization: Companies frequently get paid whether they deliver the goods or not
(one of the reasons investors like privatization deals). For example, in 2004, city inspectors found
more than 1,800 code violations at Lawndale Restoration, the largest privately owned, publicly subsidized
apartment project in Chicago. Guaranteed a steady revenue stream whether they did right by the tenants
or not-from 1997 to 2003, the project generated $4.4 million in management fees and $14.6 million
in salaries and wages-the developers were apparently satisfied to just let the place rot.
Meanwhile, the $1.6 billion Plan for Transformation drags on, six years past deadline and still
2,500 units from completion, while thousands of families languish on the Chicago Housing Authority's
waitlist.
Be that as it may, the Chicago experience looks like a laboratory for a new White House
pilot initiative, the Rental Assistance Demonstration Program (RAD), which is set to turn over some
60,000 units to private management next year. Lack of success never seems to be an impediment where
privatization is concerned.
"... It is frustrating that Piketty sticks to the "if only we gave the right incentives to this system" approach for combating both hyper-globalization and global warming. THIS DOES NOT WORK. The reason we are in this mess today is not because there weren't enough well-intentioned people running the system it is that the system deliberately selects against ..."
"... But then again, he titled his book "Capital" without ever having read Marx. ..."
"... This is not to say that the movement to raise awareness about TPP and its ilk was not useful the point is that there is no useful feedback mechanism between the political elite and the electorate... The link between the state and civil society is fundamentally broken. ..."
"... Sometimes you just need the right incentive. I propose this one: the opportunity to stay out of prison! ..."
It is frustrating that Piketty sticks to the "if only we gave the right incentives to this
system" approach for combating both hyper-globalization and global warming. THIS DOES NOT WORK.
The reason we are in this mess today is not because there weren't enough well-intentioned people
running the system it is that the system deliberately selects against such people.
He laments the inefficacy of the Paris Accord and CETA and suggests instead to create more
institutions? More bureaucratic positions and trade clauses?
And who exactly will undertake such
a thing, the corporate lobbyists and billionaires? Or the civil society movements that had such
an impact on elites that it required a Trump victory to finally dump the TPP?*
But then again, he titled his book "Capital" without ever having read Marx.
*This is not to say that the movement to raise awareness about TPP and its ilk was not
useful the point is that there is no useful feedback mechanism between the political elite
and the electorate... The link between the state and civil society is fundamentally
broken.
I hate/have to say this but it is very typical in the French spirit of things to propose a
new administrative entity to address any perceived problem instead of the Anglo-Saxon approach
of looking at which entity caused the problem and needs to be removed. Call it the negative liberty/positive
liberty dialectic if you like.
It's a culture issue. You fix culture by removing the bad apples (prosecution) and making the
incentives survivable for decent people (because it is more fun, at the end of the day, to be
a good person).
"... For over a decade now, Chicago has been the epicenter of the fashionable trend of "privatization"-the transfer of the ownership or operation of resources that belong to all of us, like schools, roads and government services, to companies that use them to turn a profit. Chicago's privatization mania began during Mayor Richard M. Daley's administration, which ran from 1989 to 2011. Under his successor, Rahm Emanuel, the trend has continued apace. For Rahm's investment banker buddies, the trend has been a boon. For citizens? Not so much. ..."
"... the English word "privatization" derives from a coinage, Reprivatisierung, formulated in the 1930s to describe the Third Reich's policy of winning businessmen's loyalty by handing over state property to them. ..."
"... As president, Bill Clinton greatly expanded a privatization program begun under the first President Bush's Department of Housing and Urban Development. "Hope VI" aimed to replace public-housing high-rises with mixed-income houses, duplexes and row houses built and managed by private firms. ..."
"... The fan was Barack Obama, then a young state senator. Four years later, he cosponsored a bipartisan bill to increase subsidies for private developers and financiers to build or revamp low-income housing. ..."
"... However, the rush to outsource responsibility for housing the poor became a textbook example of one peril of privatization: Companies frequently get paid whether they deliver the goods or not (one of the reasons investors like privatization deals). For example, in 2004, city inspectors found more than 1,800 code violations at Lawndale Restoration, the largest privately owned, publicly subsidized apartment project in Chicago. Guaranteed a steady revenue stream whether they did right by the tenants or not-from 1997 to 2003, the project generated $4.4 million in management fees and $14.6 million in salaries and wages-the developers were apparently satisfied to just let the place rot. ..."
PGL on Chicago's parking meters. Yes Democratic Mayor Daley made a bad deal. If Trump does invest in infrastructure is this the kind of thing he'll be doing, selling off public
assets and leasing them back again, aka privatization?
Seems like two different things. Here's an In These Time article from January 2015 by the smart Rick Perlstein.
Welcome to Rahm Emanuel's Chicago, the privatized metropolis of the future.
BY RICK PERLSTEIN
In June of 2013, Chicago Mayor Rahm Emanuel made a new appointment to the city's seven-member
school board to replace billionaire heiress Penny Pritzker, who'd decamped to run President Barack
Obama's Department of Commerce. The appointee, Deborah H. Quazzo, is a founder of an investment firm
called GSV Advisors, a business whose goal-her cofounder has been paraphrased by Reuters as saying-is
to drum up venture capital for "an education revolution in which public schools outsource to private
vendors such critical tasks as teaching math, educating disabled students, even writing report cards."
GSV Advisors has a sister firm, GSV Capital, that holds ownership stakes in education technology
companies like "Knewton," which sells software that replaces the functions of flesh-and-blood teachers.
Since joining the school board, Quazzo has invested her own money in companies that sell curricular
materials to public schools in 11 states on a subscription basis.
In other words, a key decision-maker for Chicago's public schools makes money when school boards
decide to sell off the functions of public schools.
She's not alone. For over a decade now, Chicago has been the epicenter of the fashionable
trend of "privatization"-the transfer of the ownership or operation of resources that belong to all
of us, like schools, roads and government services, to companies that use them to turn a profit.
Chicago's privatization mania began during Mayor Richard M. Daley's administration, which ran from
1989 to 2011. Under his successor, Rahm Emanuel, the trend has continued apace. For Rahm's investment
banker buddies, the trend has been a boon. For citizens? Not so much.
They say that the first person in any political argument who stoops to invoking Nazi Germany automatically
loses. But you can look it up: According to a 2006 article in the Journal of Economic Perspectives,
the English word "privatization" derives from a coinage, Reprivatisierung, formulated in the
1930s to describe the Third Reich's policy of winning businessmen's loyalty by handing over state
property to them.
In the American context, the idea also began on the Right (to be fair, entirely independent of
the Nazis)-and promptly went nowhere for decades. In 1963, when Republican presidential candidate
Barry Goldwater mused "I think we ought to sell the TVA"-referring to the Tennessee Valley Authority,
the giant complex of New Deal dams that delivered electricity for the first time to vast swaths of
the rural Southeast-it helped seal his campaign's doom. Things only really took off after Prime Minister
Margaret Thatcher's sale of U.K. state assets like British Petroleum and Rolls Royce in the 1980s
made the idea fashionable among elites-including a rightward tending Democratic Party.
As president, Bill Clinton greatly expanded a privatization program begun under the first
President Bush's Department of Housing and Urban Development. "Hope VI" aimed to replace public-housing
high-rises with mixed-income houses, duplexes and row houses built and managed by private firms.
Chicago led the way. In 1999, Mayor Richard M. Daley, a Democrat, announced his intention to tear
down the public-housing high-rises his father, Mayor Richard J. Daley, had built in the 1950s and
1960s. For this "Plan for Transformation," Chicago received the largest Hope VI grant of any city
in the nation. There was a ration of idealism and intellectual energy behind it: Blighted neighborhoods
would be renewed and their "culture of poverty" would be broken, all vouchsafed by the honorable
desire of public-spirited entrepreneurs to make a profit. That is the promise of privatization in
a nutshell: that the profit motive can serve not just those making the profits, but society as a
whole, by bypassing inefficient government bureaucracies that thrive whether they deliver services
effectively or not, and empower grubby, corrupt politicians and their pals to dip their hands in
the pie of guaranteed government money.
As one of the movement's fans explained in 1997, his experience with nascent attempts to pay private
real estate developers to replace public housing was an "example of smart policy."
"The developers were thinking in market terms and operating under the rules of the marketplace,"
he said. "But at the same time, we had government supporting and subsidizing those efforts."
The fan was Barack Obama, then a young state senator. Four years later, he cosponsored a bipartisan
bill to increase subsidies for private developers and financiers to build or revamp low-income housing.
However, the rush to outsource responsibility for housing the poor became a textbook example
of one peril of privatization: Companies frequently get paid whether they deliver the goods or not
(one of the reasons investors like privatization deals). For example, in 2004, city inspectors found
more than 1,800 code violations at Lawndale Restoration, the largest privately owned, publicly subsidized
apartment project in Chicago. Guaranteed a steady revenue stream whether they did right by the tenants
or not-from 1997 to 2003, the project generated $4.4 million in management fees and $14.6 million
in salaries and wages-the developers were apparently satisfied to just let the place rot.
Meanwhile, the $1.6 billion Plan for Transformation drags on, six years past deadline and still
2,500 units from completion, while thousands of families languish on the Chicago Housing Authority's
waitlist.
Be that as it may, the Chicago experience looks like a laboratory for a new White House
pilot initiative, the Rental Assistance Demonstration Program (RAD), which is set to turn over some
60,000 units to private management next year. Lack of success never seems to be an impediment where
privatization is concerned.
Does Finance care about bigotry?
Finance has a history of recognizing bigotry and promoting it if it makes loans more predictable.
Home values could drop if too many blacks moved to a neighborhood so finance created red-lining
to protect their investments while promoting bigotry.
Finance is all in favor of tearing down minority neighborhoods or funding polluters in those neighborhoods
to protect investments in gated communities and white sundown towns.
Finance is often part of the problem, not the solution.
All of what you say is true but I have some contrarian/devil's advocate thoughts.
Some finance people are smart and have an enlightened self-interest. Think of Robert Rubin,
George Soros or Warren Buffet. They often back Democrats. Think of Chuck Schumer. Think of Hillary
Clinton's speeches to the banks.
Finance often knocks down walls and will back whatever makes a profit. Often though as you
say it conforms to prejudice and past practices, like red-lining.
I think of the lines from the Communist Manifesto:
"The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal,
idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his
"natural superiors", and has left remaining no other nexus between man and man than naked self-interest,
than callous "cash payment". It has drowned the most heavenly ecstasies of religious fervour,
of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation.
It has resolved personal worth into exchange value, and in place of the numberless indefeasible
chartered freedoms, has set up that single, unconscionable freedom - Free Trade. In one word,
for exploitation, veiled by religious and political illusions, it has substituted naked, shameless,
direct, brutal exploitation.
The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to
with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of
science, into its paid wage labourers."
But the cash nexus isn't enough spiritually or emotionally and when living standards stagnate
or decline, anxious people retreat into tribalism.
When I first glances at your question I immediately answered your query like you everyone here
did, 'no, finance does not care about bigotry except to the degree finance can profit from it.'
Then I realized there are too many assumptions contained in your question for me to respond
b/c I was thinking inside the box and not taking in all that impacts Finance and bigotry.
Your question assumes "Finance" is Private and for profit. But that is not true is it, since
there is Public, NGO, Charity, Socialistic, Communistic, et. al., Finance.
And, then there is the problem with the word "bigotry."
Your post makes clear to me that you are referring to American bigotry in housing, but that
means you ignore that "bigotry" exists largely from ones individual perspective, which we know
depends upon from where one sees it.
What I mean by that is Russia, China, Syria, Turkey, Iran, etc., all see and proclaim bigotry
in the USA but deny bigotry in their own countries.
If your point is simply that America Finance discriminates against people of color in Housing
or that such discrimination perpetuates bigotry then no one can disagree with you, imo, however,
your implication that that is done to perpetuate bigotry and racism is probably false since Finance
is amoral, looking to secure profit, and not out to discriminate against a particular group such
as people of color as long as they can profit.
"... "He spoke of the need to reform our trade deals so they aren't raw deals for the American people," she said. "He said he will not cut Social Security benefits. He talked about the need to address the rising cost of college and about helping working parents struggling with the high cost of child care. He spoke of the urgency of rebuilding our crumbling infrastructure and putting people back to work. He spoke to the very real sense of millions of Americans that their government and their economy has abandoned them. And he promised to rebuild our economy for working people." ..."
"... And economic populists really care about race gender etc, we just think that focusing on social justice as a priority over economic equality inevitably leads to Trump or someone like him. ..."
"... I don't know who Clinton might represent more than American feminists, and they, or at least the ones over thirty with power and wealth, certainly seemed to feel possessive and empowered by her campaign and possible election. ..."
"... And white American feminists could not even get 50% of white working class women nationwide, and I suspect the numbers are even worse in the Upper Midwest swing states. In comparison, African-Americans delivered as always, 90% of their vote, across all classes and educational levels. Latinos delivered somewhere around 60-70%. ..."
"... You seem to have just ignored what Val, small, Helen, faustusnotes have been saying and inserted a straw man into the conversation. No you don't have to be a Marxist to worry about social discrimination, but being sensitive to social discrimination does make you sensitive to injustice in general. Who exactly are these people you are talking about? ..."
"... Over the past decade, a small but growing movement has realized that the Rube Goldberg neoliberalism of Obamacareand many other parts of modern Democratic policyis not sustainable. I've come to that conclusion painfully and slowly. I've taught the law for six years, and each year I get better at explaining how its many parts work, and fit together." ..."
"... I offered in an earlier comment, that the left looks askance at identity politics because of the recuperation of these gender emancipation, anti-racism and anti-colonial struggles by capital and the state. engels, above has offered Nancy Fraser linked here. ..."
"... I have no argument with the notion that Clinton was an imperfect candidate. Almost all candidates are (even a top-notch one like Obama) ..."
The idea that people who are against capitalism (or neoliberalism, if you want) are also not
generally against patriarchy and racist colonialism ( as a system ) is obviously false.
On the contrary it's people who are 'into' identity politics who generally are not against
these things (again, as a system). People who are into identity politics are against racism and
sexism, sure, but seem to have little if any idea as to why these ideas came into being and what
social purposes they serve: they seem to think they are just arbitrary lifestyle choices, like
not liking people with red hair, or preferring The Beatles to the Rolling Stones or something.
And if this is true, all we have to do is 'persuade' people not to 'be racist' or 'be sexist'
and then the problem goes away. Hence dehistoricised (and, let's face it, depoliticised) 'political
correctness'. which seems to insist that as long as you don't, personally , call any African-American
the N word and don't use the C word when talking about women, all problems of racism and sexism
will be solved.
The inability to look at History, and social structures, and the history of social structures,
and the purpose of these structures as a pattern of domination, inevitably leads to Clintonism
(or, in the UK, Blairism), which, essentially, equals 'neoliberalism plus don't use the N word'.
I'm not going to argue directly with people because some people are obviously a bit angry about
this but the question is not whether or not sexism or homophobia are good things (they obviously
aren't): the question is whether or not fighting against these things are necessarily left-wing,
and the answer is: depends on how you do it. For example, in both cases we have seen right-wing
feminism ('spice girls feminism') and right wing gay rights (cf Peter Thiel, Milo Yiannopoulos)
which sees 'breaking the glass ceiling' for women and gays as being the key point of the struggle.
I know Americans got terribly excised about having the first American female President and that's
understandable for its symbolic value, but here in the UK we now have our second female Prime
Minister.
So what? Who gives a shit? What's changed (not least, what's changed for women?)?. Nothing.
Eventually you are going to get your first female President. You will probably even someday
get your first gay President. Both of them may be Republicans. Think about that.
What's wrong with -(from the NYT):
'Democrats, who lost the White House and made only nominal gains in the House and Senate, face
a profound decision after last week's stunning defeat: Make common cause where they can with Mr.
Trump to try to win back the white, working-class voters he took from them
while always reminding the people that F face von Clownstick actually is a Fascistic Racist
Birther.
and at the same time (from E. Warren):
"He spoke of the need to reform our trade deals so they aren't raw deals for the American
people," she said. "He said he will not cut Social Security benefits. He talked about the need
to address the rising cost of college and about helping working parents struggling with the
high cost of child care. He spoke of the urgency of rebuilding our crumbling infrastructure
and putting people back to work. He spoke to the very real sense of millions of Americans that
their government and their economy has abandoned them. And he promised to rebuild our economy
for working people."
Straw man much, hidari? Just to pick a random example of someone who thinks these things are important,
Ursula le guin Sure she's never made any state,nets about systematic oppression, and economic
systems? The problem you have when you try to claim that these ideas "cameo to being" through
social and structural factors is that you're wrong.
Everyone knows rape is as old as sex, the idea it's a product of a distorted economic system
is a fiction produced by Beardy white dudes to shut the girls up until after the revolution.
Which is exactly what you "reformers" of liberalism, who think it has lost its way in the maze
of identity politics, want to do. Look at the response of people like rich puchalsky to BLM
trying to pretend it's equivalent to the system of police violence directed against occupy, as
if violence against white people for protesting is the same as e murder of black people simply
for being in public.
It's facile, it's shallow and it's a desperate attempt to stop the Democratic Party being forced
to respond to issues outside the concerns of white rust belt men it's no coincidence that this
uprising g of shallow complaints against identity politics from the hard left occurs at the same
time we see a rust belt reaction against the new left. And the reaction from the hard left will
be as destructive for the dems as the rust belt reaction is for the country.
nastywoman 11.17.16 at 8:04 am
and what a 'feast' for historians this whole 'deal' must be?
as there are all kind of fascinating thought experiment around this man who orders so loudly and
in fureign language a Pizza on you-tube.
And wasn't it time that our fellow Americans find out that Adolf Hitler not only ordered Pizza
or complained about his I-Phone NO! that he also is very upset that Trump also won the erection?
And there are endless possibilities for histerical conferences about who is the 'Cuter Fascist
or what Neo Nazis in germany sometimes like to discuss: What if Hitler only would have done 'good'
fascistic things?
Wouldn't he be the role model for all of US?
Or as there are so many other funny hypotheticals
1) And economic populists really care about race gender etc, we just think that focusing on social
justice as a priority over economic equality inevitably leads to Trump or someone like him.
2) I don't know who Clinton might represent more than American feminists, and they, or at least
the ones over thirty with power and wealth, certainly seemed to feel possessive and empowered
by her campaign and possible election.
And white American feminists could not even get 50% of white working class women nationwide,
and I suspect the numbers are even worse in the Upper Midwest swing states. In comparison, African-Americans
delivered as always, 90% of their vote, across all classes and educational levels. Latinos delivered
somewhere around 60-70%.
American feminism has catastrophically, an understatement, failed over the last couple
generations, and class had very much to do with it, upper middle class advanced degreed liberal
women largely followed Clinton's model, leaned in, and went for the bucks rather than reaching
ou to their non-college sisters in the Midwest. Kinda like Mao staying in Shanghai, or Lenin in
Zurich and expecting the Feminist Revolution to happen in the countryside while they profit.
Feminism, also playing to its base of upper middle class women, has also shifted its focus
from economic and labor force issues, to a range of social and sexuality issues that are of
less concern to most women. Personally, I feel betrayed. The male-female wage gap has not narrow
appreciably since the 1990s, glass ceilings are still in place and, for me most importantly,
horizontal sex segregation in the market for jobs that don't require a college degree, where
roughly 2/3 of American women compete, is unabated. I looked at the most recent BLS stats for
occupations by gender recently. Of the two aggregated categories of occupations that would
be characterized as 'blue collar' work, women represent a little over 2 and 3 percent respectively.
For specific occupations under those categories more than half (eyeballing) don't even include
a sufficient number of women to report.
Again, it isn't hard to see why. Upper middle class women can easily imagine themselves, or
their daughters, needing abortions. The possibility that that option would not be available is
a real fear. They do not worry that they or their daughters would be stuck for most of their adult
lives cashiering at Walmart, working in a call center, or doing any of the other boring, dead-end
pink-collar work which are the only options most women have. And they don't even think of blue-collar
work.
Which Marxists always have expected and why we strongly prefer that the UMC and bourgeois be
kept out of the Party. It's called opportunism and is connected to reformism, IOW, wanting to
keep the system, just replace the old bosses with your owm.
You backed the war-mongering plutocrat and handed the world to fascism. Can you show responsibility
and humility for even a week?
You seem to have just ignored what Val, small, Helen, faustusnotes have been saying and inserted
a straw man into the conversation. No you don't have to be a Marxist to worry about social discrimination,
but being sensitive to social discrimination does make you sensitive to injustice in general.
Who exactly are these people you are talking about?
reason 11.17.16 at 8:43 am
Of course Hidari might have had a point if he was making an argument
about campaign strategy and emphasis, but he seems to be saying more that that, or are I wrong?
Over the past decade, a small but growing movement has realized that the
Rube Goldberg neoliberalism of Obamacareand many other parts of modern Democratic policyis not
sustainable. I've come to that conclusion painfully and slowly. I've taught the law for six years,
and each year I get better at explaining how its many parts work, and fit together."
basil 11.17.16 at 9:09 am
I offered in an earlier comment, that the left looks askance at identity
politics because of the recuperation of these gender emancipation, anti-racism and anti-colonial
struggles by capital and the state.
engels, above has offered Nancy Fraser linked here.
CT's really weird on identity. Whose work are we thinking through? 'Gender'and 'Race' are political
constructions that are most explicitly economic in nature. There were no black people before racism
made certain bodies available for the inhumanity of enslavement, and thus the enrichment of the slaver
class. Commentators oughtn't, I don't think, write as if there are actually existing black and white
people. As Dorothy Roberts Fatal Invention: How Science, Politics, and Big Business Re-Create Race
in the 21st Century (and Paul Gilroy Against Race: Imagining Political Culture beyond the Color
Line, and Karen and Barbara Fields Racecraft: The Soul of Inequality in American Life, etc put
it, it is racism that creates and naturalises race. Of course liberalism's logics of governance,
the necessity of making bodies available for control and exploitation constantly reproduce and entrench
race (and gender).
I offered that racialised people, particularly those gendered as women/queer, the ones who have
been refused whiteness, are also super suspicious of these deployments of identity politics, especially
by non-subjugated persons who've a political project for which they are weaponising subordinated
identities. It really is abusive and exploitative.
We must listen better. As the racialised and gendered are pointing out, it is incredible that
it has taken the threat of Trump, and now their ascension for liberals to tune in to the violence
waged against racialised, gendered, queer lives and bodies by White Supremacy. History will remember
that #BLM (like the record deportations, the Clintons' actual-existing-but-to-liberals invisible
border wall, the Obamacare farce in the OP, de Blasio's undocumented persons list, Rahm in Chicago,
the employment of David Brock, Melania's nudes, the crushing poverty of racialised women, the exploitation
of those violated by Trump, the re-invasion and desecration of Native American territory) happened
under a liberal presidency. That liberal presidency responded to BLM with a Blue Lives Matter law.
This is evidence of liberalism's inherently violent attitude towards those it pretends to care about.
All this preceded Trump.
If you are for gender emancipation or anti-race/racism, be against these all the time, not just
to tar your temporary electoral foes. Be feminist when dancing Yemenis gendered as women some of
the poorest, most vulnerable humans are droned at weddings. Be feminist when Mexico's farmers gendered
as women are dying at NAFTA's hand. Be feminist when poor racialised queer teens are dying in the
streets as you celebrate the right of wealthy gays to marry. Be feminist and reject people who've
got multiple sexual violence accusations against them and those who help them cover these up and
shame the victims. Be feminist and anti-racist and reject people who glory in making war on poor
defenceless people. Be feminist and anti-racist and reject white nationalists gendered female who
call racialised groups 'super-predators' to court racists. Reject people who say of public welfare
improvements it will never, ever happen, this is not Denmark. The people who need those services
the most are vulnerable humans, racialised and gendered as women. Never say that politicians who
put poor migrants in cages on isolated islands are nice people. They absolutely aren't. Some of this
is really easy.
These puerile rhetorical gestures reveal the people for whom 2:30 a.m. on Wednesday was simply
a glass ceiling left unbroken by a woman who launched a massive Yemeni bombing campaign. Perhaps
as a mechanic of coping, it has become incredibly sexy for a certain class of liberals to dodge
any responsibility for the lives they, too, have compromised. They aren't the same ones who have
to worry about who will be the first person to call them a terrorist faggot ..For the rest of
us, the victory of this fascist is a confirmation of the biases we have known all along, no matter
public liberal consciousness's inabilities to wrangle them into submission."
and just a suggestion I have learned from touring the rust belt waaay before it was as 'fashionable'
as it is right now.
While we in some hotel room in Scranton fought our Ideological fights -(we had a French Camera
Assistant who insisted that America one day will elect 'a Fascist like Hitler')
the mechanic we had scheduled to interview about his Camaro SS for the next day had exchanged
all the spark plucks of his car.
bob mcmanus above, I really think social justice and economic justice are bound together, and that Universal Healthcare,
for example, as a fundamental right is a basic feminist and anti-racist goal. Most particularly because
the vulnerability of these groups, their economic hardship, their very capacity to live, to survive
is at stake in a marketised health care system.
Racialised outcomes for ACA.
Similarly with marketised higher education and skills training. How cynical that HRC used HBCUs
to argue that racialised people would suffer from free public tertiary education!
Dorothy Roberts' work for example has interesting perspectives on how race is created in part
through the differentiated access to healthcare. They discuss how this plays out for both maternal
and child mortality, and for breast cancer survival. 'Oh, the evidence shows that racialised women
are more vulnerable to x condition'. Exactly, because a racist and marketised system denies them
necessary healthcare.
A funny thing about the new comment moderation regime is that you can get two people posting in
rapid succession saying pretty much opposite things like me then Hidari. It seems as if (although
again it's not very clear) Hidari is suggesting capitalism created sexism and racism? Or something
like that? I'm definitely on better ground there though: patriarchy and sexism predate capitalism.
In fairness though, I think I understand what Hidari and engels are getting at. I know lots
of young people, women and people of colour, who probably fit their description in a way. They
are young, smart, probably a bit naive, and at least some of them probably from privileged backgrounds.
They appear driven by desire to succeed in a hierarchical academic system that still tends to
be dominated by white men at the upper levels, and they don't seem to question the system much,
at least not openly.
But can I just mention, some of our hosts here are actually fairly high up in that system.
Why aren't they being attacked as liberals or proponents of "identity politics"? Why is it only
when women or people of colour try to succeed in that very same academic system that it becomes
so wrong?
Another Nick, yes I can comment on that. I think it's fascinating that the old beardy leftists
and berniebros are fixated on Lena Dunham. Who else is fixated on Lena Dunham? The right bloggers,
who are inflamed with rage at everything she does. Who else is fixated on identity politics? The
right bloggers, who present it as everything wrong with the modern left, PC gone mad, censorship
etc. You guys should get together and have a party you're made for each other.
Also, the Democrats don't have a "celebrity campaign mascot." So what are you actually talking
about?
basil @ 64
basil what in any conceivable world makes you think that feminists on CT don't know about the
issues you're talking about? I work in a school of public health and my entire work consists of
trying to address those sorts of issues, plus ecological sustainability.
Seriously this has all gone beyond straw-wo/manning. Some people here are talking to others
who exist only in their minds or something. The world's gone mad.
engels 11.17.16 at 12:06 pm
Umm Val and FaustusNoted, which part of-
identity politics isn't the same thing as feminism, anti-racism, LGBT politics, etc. They're
all needed now more than ever.
-was unclear to you?
I DON'T want to live in a world in which 'patriarchy and racism' are okay, I want to live in a
world in which America has a real Left, which represents the working class (black, white, gay, straight,
female, male-like other countries do to a greater lesser degree), and which is the only thing that
has a shot at stopping its descent into outright fascism.
it often gets thrown around as a kind of all-encompassing epithet
Point taken-but there's really nothing I can do to stop other people misusing terms (until
the Dictatorship of the Prolerariat anyway :) )
Cranky Observer 11.17.16 at 12:27 pm
= = = faustnotes @ 4:14 am The reason these conservative Dems come from those states is
that those states don't support radical welfare provisions they don't want other people getting
a free lunch, and value personal responsibility over welfarism. = = =
As long as you don't count enormous agricultural, highway, postal service, and military base subsidies
as any form of "welfare", sure. And that's not even counting the colossal expenditures on military
force and bribes in the Middle East to keep the diesel-fuel-to-corn unroofed chemical factory (i.e.
farming) industry running profitably. Apparently the Republicans who hate the US Postal Service with
a vengeance, for example, are unaware that in 40% of the land area of the United States FedEx, UPS,
etc turn over the 'last hundred mile' delivery to the USPS.
Ps I'm kind of surprised this thread has been allowed to go on so long but I'm going to bow out
now-feel free to continue trying to smear me behind my back
bob mcmanus 11.17.16 at 12:35 pm
Would a real leftist let her daughter marry a hedge-fund trader?
I suppose they are a step above serial killers and child molesters, but c'mon. Quotes from Wiki,
rearranged in chronological order.
Beginning in the early 1990s, Mezvinsky used a wide variety of 419 scams. According to a federal
prosecutor, Mezvinsky conned using "just about every different kind of African-based scam we've ever
seen."[11] The scams promise that the victim will receive large profits, but first a small down payment
is required. To raise the funds needed to front the money for the fraudulent investment schemes he
was being offered, Mezvinsky tapped his network of former political contacts, dropping the name of
the Clinton family to convince unwitting marks to give him money.[12]
In March 2001, Mezvinsky was indicted and later pleaded guilty to 31 of 69 felony charges of bank
fraud, mail fraud, and wire fraud
"In July 2010, Mezvinsky married Chelsea Clinton in an interfaith ceremony in Rhinebeck, New York.[12]
The senior Clintons and Mezvinskys were friends in the 1990s ; their children met on a Renaissance
Weekend retreat in Hilton Head Island, South Carolina."
Subsequent to his graduations, he worked for eight years as an investment banker at Goldman Sachs
before leaving to join a private equity firm, but later quit. In 2011, he co-founded a Manhattan-based
hedge fund firm, Eaglevale Partners, with two longtime partners, Bennett Grau and Mark Mallon.[1][8]
In May 2016, The New York Times reported that the Eaglevale Hellenic Opportunity Fund is said to
have lost nearly 90 percent of its value, [which equated to a 90% loss to investors] and sources
say it will be shutting down.[9][10] Emails discovered as part of Wikileaks' release of the "Podesta
emails" seemed to indicate that Mezvinsky had used his ties to the Clinton family to obtain investors
for his hedge fund through Clinton Foundation events.
Marcotte, Sady Doyle, Valenti, the Clinton operatives knew this stuff.
Prioritizing women's liberation over economic populism, just a little bit, doesn't quite cover
it. Buying fully into the most rapacious aspects of predatory capitalism is more lie it.
If Clinton is your champion, and I am still seeing sads at Jezebel, you have zero credilibity
on economic issues. She's one of the worst crooks to ever run for President. And we will see how
Obama fares on his immediate switch from President to his ambition to be a venture capitalist for
Silicon Valley. I'll bet Obama gets very very lucky!
Val @49 &
"they (at some confused and probably not fully conscious level) do seem to assume that violence
and oppression of women and people of colour never used to happen when white men (including white
working class men) had 'good jobs' .. patriarchy and racism predate neoliberalism by centuries."
"patriarchy and sexism predate capitalism."
I think this framing is misleading, because you're historically comparing forms of oppression
with economic systems, rather than varieties of one or the other.
Wouldn't the more relevant comparison be something like: patriarchy and sexism are coeval with
classism and economic inequality?
What concretely are racism and sexism, after all, but ideologies dependent upon power inequalities,
and what are those but inequalities of social position (man, father) and wealth and ownership
that make possible that power difference? How could sexism or racism have existed without class
or inequality?
novakant 11.17.16 at 1:32 pm
I have no argument with the notion that Clinton was an imperfect candidate. Almost all
candidates are (even a top-notch one like Obama)
Strawman (I have heard a lot of times before):
nobody criticizes Clinton for being imperfect, people criticize her for being a terrible, terrible
candidate and the DNC establishment for supporting this terrible, terrible candidate: she lost
against TRUMP for goodness' sake.
bob mcmanus: "In March 2001, Mezvinsky was indicted and later pleaded guilty to 31 of 69 felony
charges of bank fraud, mail fraud, and wire fraud "
Well, either I'm shocked to discover that Clinton was involved in her daughter's husband's
father's crimes some 20 years ago, or you've demonstrated that Clinton's daughter married a man
whose father was a crook. I'm guessing the latter, though I'm left wondering WTF that has to do
with Clinton's character.
engels 11.17.16 at 2:03 pm
One more:
"we cannot ignore the fact that the vast majority of white men and a majority of white women,
across class lines, voted for a platform and a message of white supremacy, Islamophobia, misogyny,
xenophobia, homophobia, anti-Semitism, anti-science, anti-Earth, militarism, torture, and policies
that blatantly maintain income inequality. The vast majority of people of color voted against
Trump, with black women registering the highest voting percentage for Clinton of any other demographic
(93 percent). It is an astounding number when we consider that her husband's administration oversaw
the virtual destruction of the social safety net by turning welfare into workfare, cutting food
stamps, preventing undocumented workers from receiving benefits, and denying former drug felons
and users access to public housing; a dramatic expansion of the border patrol, immigrant detention
centers, and the fence on Mexico's border; a crime bill that escalated the war on drugs and accelerated
mass incarceration; as well as NAFTA and legislation deregulating financial institutions.
"Still, had Trump received only a third of the votes he did and been defeated, we still would
have had ample reason to worry about our future.
"I am not suggesting that white racism alone explains Trump's victory. Nor am I dismissing
the white working class's very real economic grievances. It is not a matter of disaffection versus
racism or sexism versus fear. Rather, racism, class anxieties, and prevailing gender ideologies
operate together, inseparably, or as Kimberlι Crenshaw would say, intersectionally."
https://bostonreview.net/forum/after-trump/robin-d-g-kelley-trump-says-go-back-we-say-fight-back
Bob, a real feminist would not tell her daughter who to marry.
You claim to be an intersectional feminist but you say things like this, and you blamed feminists
for white dudes voting for trump. Are you a parody account?
Michael Sullivan 11.17.16 at 2:41 pm
Mclaren @ 25 "As for 63.7% home ownership stats in 2016, vast numbers of those "owned" homes
were snapped up by giant banks and other financial entities like hedge funds which then rented
those homes out. So the home ownership stats in 2016 are extremely deceptive."
There may be ways in which the home ownership statistic is deceptive or fuzzy, but it's hard
for me to imagine this being one of them.
The definition you seem to imply for home ownership (somebody somewhere owns the home) would
result in by definition 100% home ownership every year.
I'm pretty sure that the measure is designed to look at whether one of the people who live
in a home actually owns it. Ok, let's stuff the pretty sure, etc. and use our friend google. So
turns out that the rate in question is the percentage of households where one of the people in
the household owns the apartment/house. If some banker or landlord buys a foreclosure and then
rents the house out, that will be captured in the homeownership rate.
Where that rate may understate issues is that it doesn't consider how many people are in a
household. So if lots of people are moving into their parent's basements, or renting rooms to/from
unrelated people in their houses, those people won't be counted as renters or homeowners, since
the rate tracks households, not people. Where that will be captured is in something called the
headship rate, and represents the ratio of households to adults. That number dropped by about
1.5% between the housing bust and the recession, and appears to be recovering or at worst near
bottom (mixed data from two different surveys) as of 2013. So, yes, the drop in home ownership
rate is probably understated (hence the headline of my source article below) somewhat, but not
enormously as you imply, and the difference is NOT foreclosures - unless they are purchased by
another owner occupier, they DO show up in the home ownership rate. The difference is larger average
households: more adults living with other adults.
engels @70, "I DON'T want to live in a world in which 'patriarchy and racism' are okay, I want
to live in a world in which America has a real Left, which represents the working class (black,
white, gay, straight, female, male-like other countries do to a greater lesser degree), and which
is the only thing that has a shot at stopping its descent into outright fascism."
So many prominent people and such a large majority of voters have be so completely wrong, so
many times, on everything, for a year that I really am not confident about making any strong political
claims anymore. However, it has opened me to possibilities I wouldn't have previously considered.
One is this: I'm beginning to wonder (not believe, wonder), if a lot of working class and lower-to-middle
middle class Americans, including a lot of the ones who didn't vote or who switched from Obama
to Trump (not including those who were always on the right) would already be on board, or in the
long run be able of getting on board, with the picture Engels paints at 70.
That possibility seems outrageous because we assume this general group are motivated *primarily*
by resentment against women and people of color. But the more I read news stories that directly
interview themnot the rally goers, but the othersthe more it seems that they will side with
*almost anyone* who they think is on their side, and *against anyone* who they think has contempt
or indifference for them. Put another way: they are driven by equal opportunity resentment to
whatever prejudices serve their resentment, rather than by a deeply engrained, fixed, rigid, kind
of prejudice. (I have in mind a number of recent articles, but one thing that struck me is interviews
with racially diverse factory workers, with Latinos and women, who voted for Trump.)
I also begin to wonder if there is as much, if not more, resistance to wide solidarity among
the left than among this group of voters who aren't really committed to either party. I begin
to think that many on the left are strongly, deeply, viscerally opposed to the middle range working
class, period, and not *just* to the racism and sexism that are all too often found there. I worry
the Democrats' class contempt, their conservative disgust for their social, educational, professional,
and economic inferiors is growingpartly based in reasonable disgust at the horrendous excesses
of the right, but partly class-based, pathological, and subterranean, independent of that reasonable
side.
I say this not to justify Trump voters or non-voters or to vilify Democrats, but actually with
a bit of optimism. For a very long time even many on the far left has looked at the old Marxist
model of wide solidarity among the proletariat with skepticism. But I'm wondering if that skepticism
is still justified. I wonder if what stands in the way of a truly diverse working class movement
is not the right but the left. If they're ready, and we've not been paying attention.
Are we really faced with a working class that rejects diversity? Are we really opposing to
them a professional class that truly accepts diversity? Isn't there a kind of popular solidarity
appearing, in awkward and sometimes ugly ways, that is destroying the presumptions of that opposition?
engels 11.17.16 at 3:32 pm Cornel West:
In short, the abysmal failure of the Democratic party to speak to the arrested mobility and
escalating poverty of working people unleashed a hate-filled populism and protectionism that threaten
to tear apart the fragile fiber of what is left of US democracy. And since the most explosive
fault lines in present-day America are first and foremost racial, then gender, homophobic, ethnic
and religious, we gird ourselves for a frightening future. What is to be done? First we must try
to tell the truth and a condition of truth is to allow suffering to speak. For 40 years, neoliberals
lived in a world of denial and indifference to the suffering of poor and working people and obsessed
with the spectacle of success. Second we must bear witness to justice. We must ground our truth-telling
in a willingness to suffer and sacrifice as we resist domination. Third we must remember courageous
exemplars like Martin Luther King Jr, who provide moral and spiritual inspiration as we build
multiracial alliances to combat poverty and xenophobia, Wall Street crimes and war crimes, global
warming and police abuse and to protect precious rights and liberties .
Val: "It seems as if (although again it's not very clear) Hidari is suggesting capitalism created
sexism and racism? Or something like that? I'm definitely on better ground there though, patriarchy
and sexism predate capitalism."
If Hidari is coming from a more-or-less mainline contemporary Marxist position, this is a misunderstanding
of their argument, which is no more a claim that capitalism "created sexism and racism" than it
would be a claim that capitalism created class antagonism. What's instead being suggested is that
just as capitalism has systematized a specific form of class antagonism (wage laborer vs.
capitalist) as a perceived default whose hegemony and expansion shapes our perception of all other
potential antagonisms as anachronistic exceptions, so it has done the same with specific forms
of sexism and racism, the forms we might call "patriarchy" and "white supremacy". In fact the
argument is typically that antagonisms like white vs. POC and man vs. woman function as normalized
exceptions to the normalized general antagonism of wage laborer vs. capitalist, a space where
the process known since Marx as "primitive accumulation" can take place through the dispossession
of women and POC (up to and including the dispossession of their very bodies) in what might otherwise
be considered flagrant violation of liberal norms.
As theorists like
Rosa Luxemburg and
Silvia Federici
have elaborated, this process of accumulation is absolutely essential to the continued functioning
of capitalism - the implication being that as much as capitalism and its ideologists pretend to
oppose oppressions like racism and sexism, it can never actually destroy these oppressions without
destroying its own social basis in the process. Hence neoliberal "identity politics", in which
changing the composition of the ruling elite (now the politician shaking hands with Netanyahu
on the latest multibillion-dollar arms deal can be a black guy with a Muslim-sounding name! now
the CEO of a company that employs teenaged girls to stitch T-shirts for 12 hours a day can be
a woman!) is ideologically akin to wholesale liberation, functions not as a way to destroy racism
and sexism but as a compromise gambit to preserve them.
Another Nick 11.17.16 at 4:01 pm f
austusnotes, I asked if you could comment on the "identity politics" behind the Dem choice
of Lena Dunham for celebrity campaign mascot. ie. their strategy. What they were planning and
thinking? And how you think it played out for them?
Not a list of your favourite boogeymen.
"So what are you actually talking about?"
I was attempting to discuss the role of identity politics in the Clinton campaign. I asked
about Dunham because she was the most prominent of the celebrities employed by the Clinton campaign
to deploy identity politics. ie. she appeared most frequently in the media on their behalf.
Not seeing much discussion about actual policies there, economic or otherwise. It's really
just an entire interview based on identity politics. With bonus meta-commentary on identity politics.
Lena blames "white women, so unable to see the unity of female identity, so unable to look
past their violent privilege, and so inoculated with hate for themselves," for the election loss.
Why didn't the majority of white women vote for Hillary? Because they "hate themselves".
"... The New Deal did not seek to overthrow the plutocracy, but it did seek to side-step and disable
their dominance. ..."
"... It seems to me that while neoliberalism on the right was much the same old same old, the neoliberal
turn on the left was marked by a measured abandonment of this struggle over the distribution of income
between the classes. In the U.S., the Democrats gradually abandoned their populist commitments. In Europe,
the labour and socialist parties gradually abandoned class struggle. ..."
"... When Obama came in, in 2008 amid the unfolding GFC, one of the most remarkable features of
his economic team was the extent to which it conceded control of policy entirely to the leading money
center banks. Geithner and Bernanke continued in power with Geithner moving from the New York Federal
Reserve (where he served as I recall under a Chair from Goldman Sachs) to Treasury in the Obama Administration,
but Geithner's Treasury was staffed from Goldman Sachs, JP Morgan Chase and Citibank. The crisis served
to concentrate banking assets in the hands of the top five banks, but it seemed also to transfer political
power entirely into their hands as well. Simon Johnson called it a coup. ..."
"... Here's the thing: the globalization and financialization of the economy from roughly 1980 drove
both increasingly extreme distribution of income and de-industrialization. ..."
"... It was characteristic of neoliberalism that the policy, policy intention and policy consequences
were hidden behind a rhetoric of markets and technological inevitability. Matt Stoller has identified
this as the statecraft of neoliberalism: the elimination of political agency and responsibility for
economic performance and outcomes. Globalization and financialization were just "forces" that just happened,
in a meteorological economics. ..."
"... This was not your grandfather's Democratic Party and it was a Democratic Party that could aid
the working class and the Rust Belt only within fairly severe and sometimes sharply conflicting constraints.
..."
"... No one in the Democratic Party had much institutional incentive to connect the dots, and draw
attention to the acute conflicts over the distribution of income and wealth involved in financialization
of the economy (including financialization as a driver of health care costs). And, that makes the political
problem that much harder, because there are no resources for rhetorical and informational clarity or
coherence. ..."
"... If Obama could not get a very big stimulus indeed thru a Democratic Congress long out of power,
Obama wasn't really trying. And, well-chosen spending on pork barrel projects is popular and gets Congressional
critters re-elected. So, again, if the stimulus is small and the Democratic Congress doesn't get re-elected,
Obama isn't really trying. ..."
"... Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because
it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference. ..."
At the center of Great Depression politics was a political struggle over the distribution of
income, a struggle that was only decisively resolved during the War, by the Great Compression.
It was at center of farm policy where policymakers struggled to find ways to support farm incomes.
It was at the center of industrial relations politics, where rapidly expanding unions were seeking
higher industrial wages. It was at the center of banking policy, where predatory financial practices
were under attack. It was at the center of efforts to regulate electric utility rates and establish
public power projects. And, everywhere, the clear subtext was a struggle between rich and poor,
the economic royalists as FDR once called them and everyone else.
FDR, an unmistakeable patrician in manner and pedigree, was leading a not-quite-revolutionary
politics, which was nevertheless hostile to and suspicious of business elites, as a source of
economic pathology. The New Deal did not seek to overthrow the plutocracy, but it did seek
to side-step and disable their dominance.
It seems to me that while neoliberalism on the right was much the same old same old, the
neoliberal turn on the left was marked by a measured abandonment of this struggle over the distribution
of income between the classes. In the U.S., the Democrats gradually abandoned their populist commitments.
In Europe, the labour and socialist parties gradually abandoned class struggle.
In retrospect, though the New Deal did use direct employment as a means of relief to good effect
economically and politically, it never undertook anything like a Keynesian stimulus on a Keynesian
scale - at least until the War.
Where the New Deal witnessed the institution of an elaborate system of financial repression,
accomplished in large part by imposing on the financial sector an explicitly mandated structure,
with types of firms and effective limits on firm size and scope, a series of regulatory reforms
and financial crises beginning with Carter and Reagan served to wipe this structure away.
When Obama came in, in 2008 amid the unfolding GFC, one of the most remarkable features
of his economic team was the extent to which it conceded control of policy entirely to the leading
money center banks. Geithner and Bernanke continued in power with Geithner moving from the New
York Federal Reserve (where he served as I recall under a Chair from Goldman Sachs) to Treasury
in the Obama Administration, but Geithner's Treasury was staffed from Goldman Sachs, JP Morgan
Chase and Citibank. The crisis served to concentrate banking assets in the hands of the top five
banks, but it seemed also to transfer political power entirely into their hands as well. Simon
Johnson called it a coup.
I don't know what considerations guided Obama in choosing the size of the stimulus or its composition
(as spending and tax cuts). Larry Summers was identified at the time as a voice of caution, not
"gambling", but not much is known about his detailed reasoning in severely trimming Christina
Romer's entirely conventional calculations. (One consideration might well have been worldwide
resource shortages, which had made themselves felt in 2007-8 as an inflationary spike in commodity
prices.) I do not see a case for connecting stimulus size policy to the health care reform. At
the time the stimulus was proposed, the Administration had also been considering whether various
big banks and other financial institutions should be nationalized, forced to insolvency or otherwise
restructured as part of a regulatory reform.
Here's the thing: the globalization and financialization of the economy from roughly 1980
drove both increasingly extreme distribution of income and de-industrialization. Accelerating
the financialization of the economy from 1999 on made New York and Washington rich, but the same
economic policies and process were devastating the Rust Belt as de-industrialization. They were
two aspects of the same complex of economic trends and policies. The rise of China as a manufacturing
center was, in critical respects, a financial operation within the context of globalized trade
that made investment in new manufacturing plant in China, as part of globalized supply chains
and global brand management, (arguably artificially) low-risk and high-profit, while reinvestment
in manufacturing in the American mid-west became unattractive, except as a game of extracting
tax subsidies or ripping off workers.
It was characteristic of neoliberalism that the policy, policy intention and policy consequences
were hidden behind a rhetoric of markets and technological inevitability. Matt Stoller has identified
this as the statecraft of neoliberalism: the elimination of political agency and responsibility
for economic performance and outcomes. Globalization and financialization were just "forces" that
just happened, in a meteorological economics.
It is conceding too many good intentions to the Obama Administration to tie an inadequate stimulus
to a Rube Goldberg health care reform as the origin story for the final debacle of Democratic
neoliberal politics. There was a delicate balancing act going on, but they were not balancing
the recovery of the economy in general so much as they were balancing the recovery from insolvency
of a highly inefficient and arguably predatory financial sector, which was also not incidentally
financing the institutional core of the Democratic Party and staffing many key positions in the
Administration and in the regulatory apparatus.
This was not your grandfather's Democratic Party and it was a Democratic Party that could
aid the working class and the Rust Belt only within fairly severe and sometimes sharply conflicting
constraints.
No one in the Democratic Party had much institutional incentive to connect the dots, and
draw attention to the acute conflicts over the distribution of income and wealth involved in financialization
of the economy (including financialization as a driver of health care costs). And, that makes
the political problem that much harder, because there are no resources for rhetorical and informational
clarity or coherence.
The short version of my thinking on the Obama stimulus is this: Keynesian stimulus spending is
a free lunch; it doesn't really matter what you spend money on up to a very generous point, so
it seems ready-made for legislative log-rolling. If Obama could not get a very big stimulus
indeed thru a Democratic Congress long out of power, Obama wasn't really trying. And, well-chosen
spending on pork barrel projects is popular and gets Congressional critters re-elected. So, again,
if the stimulus is small and the Democratic Congress doesn't get re-elected, Obama isn't really
trying.
Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism,
because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference.
Great comment. Simply great. Hat tip to the author !
Notable quotes:
" The New Deal did not seek to overthrow the plutocracy, but it did seek to side-step and
disable their dominance. "
" It seems to me that while neoliberalism on the right was much the same old same old, the
neoliberal turn on the left was marked by a measured abandonment of this struggle over the distribution
of income between the classes. In the U.S., the Democrats gradually abandoned their populist
commitments. In Europe, the labour and socialist parties gradually abandoned class struggle. "
" When Obama came in, in 2008 amid the unfolding GFC, one of the most remarkable features
of his economic team was the extent to which it conceded control of policy entirely to the leading
money center banks. Geithner and Bernanke continued in power with Geithner moving from the
New York Federal Reserve (where he served as I recall under a Chair from Goldman Sachs) to Treasury
in the Obama Administration, but Geithner's Treasury was staffed from Goldman Sachs, JP Morgan
Chase and Citibank. The crisis served to concentrate banking assets in the hands of the top
five banks, but it seemed also to transfer political power entirely into their hands as well.
Simon Johnson called it a coup. "
" Here's the thing: the globalization and financialization of the economy from roughly 1980
drove both increasingly extreme distribution of income and de-industrialization. "
" It was characteristic of neoliberalism that the policy, policy intention and policy consequences
were hidden behind a rhetoric of markets and technological inevitability. Matt Stoller has identified
this as the statecraft of neoliberalism: the elimination of political agency and responsibility
for economic performance and outcomes. Globalization and financialization were just "forces"
that just happened, in a meteorological economics. "
" This was not your grandfather's Democratic Party and it was a Democratic Party that could
aid the working class and the Rust Belt only within fairly severe and sometimes sharply conflicting
constraints. "
" No one in the Democratic Party had much institutional incentive to connect the dots, and
draw attention to the acute conflicts over the distribution of income and wealth involved in financialization
of the economy (including financialization as a driver of health care costs). And, that makes
the political problem that much harder, because there are no resources for rhetorical and informational
clarity or coherence. "
" If Obama could not get a very big stimulus indeed thru a Democratic Congress long out of
power, Obama wasn't really trying. And, well-chosen spending on pork barrel projects is popular
and gets Congressional critters re-elected. So, again, if the stimulus is small and the Democratic
Congress doesn't get re-elected, Obama isn't really trying. "
" Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism,
because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference.
"
"... "Welcome to the world of strategic analysis," Ivan Selin used to tell his team during the Sixties, "where we program weapons that don't work to meet threats that don't exist." Selin, who would spend the following decades as a powerful behind-the-scenes player in the Washington mandarinate, was then the director of the Strategic Forces Division in the Pentagon's Office of Systems Analysis. "I was a twenty-eight-year-old wiseass when I started saying that," he told me, reminiscing about those days. "I thought the issues we were dealing with were so serious, they could use a little levity." ..."
"Welcome to the world of strategic analysis," Ivan Selin used to tell his team during the
Sixties, "where we program weapons that don't work to meet threats that don't exist." Selin, who
would spend the following decades as a powerful behind-the-scenes player in the Washington mandarinate,
was then the director of the Strategic Forces Division in the Pentagon's Office of Systems Analysis.
"I was a twenty-eight-year-old wiseass when I started saying that," he told me, reminiscing about
those days. "I thought the issues we were dealing with were so serious, they could use a little
levity."
####
While I do have some quibbles with the piece (RuAF pilots are getting much more than 90 hours
a year flight time & equipment is overrated and unaffordable in any decent numbers), it is pretty
solid.
"... I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. ..."
"... I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn't know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil ..."
"... Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years after the Great Recession, Americans' finances remain precarious as ever. ..."
"... These difficulties span all incomes, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill. ..."
"... Even for the country's wealthiest 20 percent - households making more than $100,000 a year - 38 percent say they would have at least some difficulty coming up with $1,000 ..."
"... Chronicle for Higher Education: ..."
"... Meanwhile, 91% of all the profits generated by the U.S. economy from 2009 through 2012 went to the top 1%. As just one example, the annual bonuses (not salaries, just the bonuses) of all Wall Street financial traders last year amounted to 28 billion dollars while the total income of all minimum wage workers in America came to 14 billion dollars. ..."
"... "Between 2009 and 2012, according to updated data from Emmanuel Saez, overall income per family grew 6.9 percent. The gains weren't shared evenly, however. The top 1 percent saw their real income grow by 34.7 percent while the bottom 99 percent only saw a 0.8 percent gain, meaning that the 1 percent captured 91 percent of all real income. ..."
"... Adjusting for inflation and excluding anything made from capital gains investments like stocks, however, shows that even that small gains for all but the richest disappears. According to Justin Wolfers, adjusted average income for the 1 percent without capital gains rose from $871,100 to $968,000 in that time period. For everyone else, average income actually fell from $44,000 to $43,900. Calculated this way, the 1 percent has captured all of the income gains." ..."
"... There actually is a logic at work in the Rust Belt voters for voted for Trump. I don't think it's good logic, but it makes sense in its own warped way. The calculation the Trump voters seem to be making in the Rust Belt is that it's better to have a job and no health insurance and no medicare and no social security, than no job but the ACA (with $7,000 deductibles you can't afford to pay for anyway) plus medicare (since most of these voters are healthy, they figure they'll never get sick) plus social security (most of these voters are not 65 or older, and probably think they'll never age - or perhaps don't believe that social security will be solvent when they do need it). ..."
"... It's the same twisted logic that goes on with protectionism. Rust Belt workers figure that it's better to have a job and not be able to afford a Chinese-made laptop than not to have a job but plenty of cheap foreign-made widgets you could buy if you had any money (which you don't). That logic doesn't parse if you run through the economics (because protectionism will destroy the very jobs they think they're saving), but it can be sold as a tweet in a political campaign. ..."
"... The claim "Trump's coalition is composed of overt racists and people who are indifferent to overt racism" is incomplete. Trump's coalition actually consists of 3 parts and it's highly unstable: [1] racists, [2] plutocrats, [3] working class people slammed hard by globalization for whom Democrats have done little or nothing. ..."
"... The good news is that Trump's coalition is unstable. The plutocrats and Rust Belters are natural enemies. ..."
"... Listen to Steve Bannon, a classic stormfront type - he says he wants to blow up both the Democratic and the Republican party. He calls himself a "Leninist" in a recent interview and vows to wreck all elite U.S. institutions (universities, giant multinationals), not just the Democratic party. ..."
"... Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism, because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference. ..."
Eric places the blame for this loss squarely on economics, which, it seems to me, gets the analysis
exactly right. And the statistics back up his analysis, I believe.
It's disturbing and saddening to watch other left-wing websites ignore those statistics and
charge off the cliff into the abyss, screaming that this election was all about racism/misogyny/homophobia/[fill
in the blank with identity politics demonology of your choice]. First, the "it's all racism" analysis
conveniently lets the current Democratic leadership off the hook. They didn't do anything wrong,
it was those "deplorables" (half the country!) who are to blame. Second, the identity politics
blame-shifting completely overlooks and short-circuits any real action to fix the economy by Democratic
policymakers or Democratic politicians or the Democratic party leadership. That's particularly
convenient for the Democratic leadership because these top-four-percenter professionals "promise
anything and change nothing" while jetting between Davos and Martha's Vineyard, ignoring the peons
who don't make $100,000 or more a year because the peons all live in flyover country.
"Trump supporters were on average affluent, but they are always Republican and aren't numerous
enough to deliver the presidency (538 has changed their view in the wake of the election result).
Some point out that looking at support by income doesn't show much distinctive support for Trump
among the "poor", but that's beside the point too, as it submerges a regional phenomenon in a
national average, just as exit polls do. (..)
"When commentators like Michael Moore and Thomas Frank pointed out that there was possibility
for Trump in the Rust Belt they were mostly ignored or, even more improbably, accused of being
apologists for racism and misogyny. But that is what Trump did, and he won. Moreover, he won with
an amateurish campaign against a well-funded and politically sophisticated opponent simply because
he planted his flag where others wouldn't.
"Because of the obsession with exit polls, post-election analysis has not come to grips with
the regional nature of the Trump phenomenon. Exit polls divide the general electorate based on
individual attributes: race, gender, income, education, and so on, making regional distinctions
invisible. Moreover, America doesn't decide the presidential election that way. It decides it
based on the electoral college, which potentially makes the characteristics of individual states
decisive. We should be looking at maps, not exit polls for the explanation. Low black turnout
in California or high Latino turnout in Texas do not matter in the slightest in determining the
election, but exit polls don't help us see that. Exit polls deliver a bunch of non-explanatory
facts, in this election more than other recent ones." http://blogs.lse.ac.uk/usappblog/2016/11/11/23174/
"Donald Trump performed best on Tuesday in places where the economy is in worse shape, and
especially in places where jobs are most at risk in the future.
"Trump, who in his campaign pledged to be a voice for `forgotten Americans,' beat Hillary Clinton
in counties with slower job growth and lower wages. And he far outperformed her in counties where
more jobs are threatened by automation or offshoring, a sign that he found support not just among
workers who are struggling now but among those concerned for their economic future."
Meanwhile, the neoliberal Democrats made claims about the economy that at best wildly oversold
the non-recovery from the 2009 global financial meltdown, and at worst flat-out misrepresented
the state of the U.S. economy. For example, president Obama in his June 1 2016 speech in Elkhart
Indiana, said:
"Now, one of the reasons we're told this has been an unusual election year is because people
are anxious and uncertain about the economy. And our politics are a natural place to channel
that frustration. So I wanted to come to the heartland, to the Midwest, back to close to my
hometown to talk about that anxiety, that economic anxiety, and what I think it means. (..)
America's economy is not just better than it was eight years ago - it is the strongest, most
durable economy in the world. (..) Unemployment in Elkhart has fallen to around 4 percent.
(Applause.) At the peak of the crisis, nearly one in 10 homeowners in the state of Indiana
were either behind on their mortgages or in foreclosure; today, it's one in 30. Back then,
only 75 percent of your kids graduated from high school; tomorrow, 90 percent of them will.
(Applause.) The auto industry just had its best year ever. (..) So that's progress.(..) We
decided to invest in job training so that folks who lost their jobs could retool. We decided
to invest in things like high-tech manufacturing and clean energy and infrastructure, so that
entrepreneurs wouldn't just bring back the jobs that we had lost, but create new and better
jobs By almost every economic measure, America is better off than when I came here at the
beginning of my presidency. That's the truth. That's true. (Applause.) It's true. (Applause.)
Over the past six years, our businesses have created more than 14 million new jobs - that's
the longest stretch of consecutive private sector job growth in our history. We've seen the
first sustained manufacturing growth since the 1990s."
None of this is true. Not is a substantive sense, not in the sense of being accurate, not in
the sense of reflecting the facts on the ground for real working people who don't fly their private
jets to Davos.
The claim that "America's economy is the strongest and most durable economy in the world" is
just plain false. China has a much higher growth rate, at 6.9% nearly triple the U.S.'s - and
America's GDP growth is trending to historic long-term lows, and still falling. Take a look at
this chart of the Federal Reserve board's projections of U.S. GDP growth since 2009 compared with
the real GDP growth rate:
"[In the survey] [t]he Fed asked respondents how they would pay for a $400 emergency. The answer:
47 percent of respondents said that either they would cover the expense by borrowing or selling
something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who
knew?
"Well, I knew. I knew because I am in that 47 percent.
" I know what it is like to have to juggle creditors to make it through a week. I know
what it is like to have to swallow my pride and constantly dun people to pay me so that I can
pay others. I know what it is like to have liens slapped on me and to have my bank account
levied by creditors. I know what it is like to be down to my last $5-literally-while I wait for
a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs.
I know what it is like to dread going to the mailbox, because there will always be new
bills to pay but seldom a check with which to pay them. I know what it is like to have to tell
my daughter that I didn't know if I would be able to pay for her wedding; it all depended on whether
something good happened. And I know what it is like to have to borrow money from my adult daughters
because my wife and I ran out of heating oil ."
" Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000
emergency, according to an exclusive poll released Thursday, a signal that despite years after
the Great Recession, Americans' finances remain precarious as ever.
" These difficulties span all incomes, according to the poll conducted by The Associated
Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less
than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty
coming up with $1,000 to cover an unexpected bill.
" Even for the country's wealthiest 20 percent - households making more than $100,000 a
year - 38 percent say they would have at least some difficulty coming up with $1,000 .
"`The more we learn about the balance sheets of Americans, it becomes quite alarming,' said
Caroline Ratcliffe, a senior fellow at the Urban Institute focusing on poverty and emergency savings
issues."
The rest of Obama's statistics are deceptive to the point of being dissimulations - unemployment
has dropped to 4 percent because so many people have stopped looking for work and moved into their
parents' basements that the Bureau of Labor Statistics no longer counts them as unemployed. Meanwhile,
the fraction of working-age adults who are not in the workforce has skyrocketed to an all-time
high. Few homeowners are now being foreclosed in 2016 compared to 2009 because the people in 2009
who were in financial trouble all lost their homes. Only rich people and well-off professionals
were able to keep their homes through the 2009 financial collapse. Since 2009, businesses did
indeed create 14 million new jobs - mostly low-wage junk jobs, part-time minimum-wage jobs that
don't pay a living wage.
"The deep recession wiped out primarily high-wage and middle-wage jobs. Yet the strongest employment
growth during the sluggish recovery has been in low-wage work, at places like strip malls and
fast-food restaurants.
"In essence, the poor economy has replaced good jobs with bad ones."
And the jobs market isn't much better for highly-educated workers:
New research released Monday says nearly half of the nation's recent college graduates work
jobs that don't require a degree.
The report, from the Center for College Affordability and Productivity, concludes that while
college-educated Americans are less likely to collect unemployment, many of the jobs they do have
aren't worth the price of their diplomas.
The data calls into question a national education platform that says higher education is better
in an economy that favors college graduates.
Don't believe it? Then try this article, from the Chronicle for Higher Education:
Approximately 60 percent of the increase in the number of college graduates from 1992 to
2008 worked in jobs that the BLS considers relatively low skilled-occupations where many participants
have only high school diplomas and often even less. Only a minority of the increment in our
nation's stock of college graduates is filling jobs historically considered as requiring a
bachelor's degree or more.
As for manufacturing, U.S. manufacturing lost 35,000 jobs in 2016, and manufacturing employment
remains 2.2% below what it was when Obama took office.
Meanwhile, 91% of all the profits generated by the U.S. economy from 2009 through 2012
went to the top 1%. As just one example, the annual bonuses (not salaries, just the bonuses) of
all Wall Street financial traders last year amounted to 28 billion dollars while the total income
of all minimum wage workers in America came to 14 billion dollars.
"Between 2009 and 2012, according to updated data from Emmanuel Saez, overall income per
family grew 6.9 percent. The gains weren't shared evenly, however. The top 1 percent saw their
real income grow by 34.7 percent while the bottom 99 percent only saw a 0.8 percent gain, meaning
that the 1 percent captured 91 percent of all real income.
Adjusting for inflation and excluding anything made from capital gains investments like
stocks, however, shows that even that small gains for all but the richest disappears. According
to Justin Wolfers, adjusted average income for the 1 percent without capital gains rose from $871,100
to $968,000 in that time period. For everyone else, average income actually fell from $44,000
to $43,900. Calculated this way, the 1 percent has captured all of the income gains."
Does any of this sound like "the strongest, most durable economy in the world"? Does any of
this square with the claims by Hillary Clinton and Barack Obama that "By almost every economic
measure, America is better off "? The U.S. economy is only better off in 2016 by disingenuous
comparison with the stygian depths of the 2009 economic collapse.
Hillary Clinton tied herself to Barack Obama's economic legacy, and the brutal reality for
working class people remains that the economy today has barely improved for most workers to what
it was in 2009, and is in many ways worse. Since 2009, automation + outsourcing/offshoring has
destroyed whole classes of jobs, from taxi drivers (wiped out by Uber and Lyft) to warehoues stock
clerks (getting wiped out by robots) to paralegals and associates at law firms (replaced by databases
and legal search algorithms) to high-end programmers (wiped out by an ever-increasing flood of
H1B via workers from India and China).
Yet vox.com continues to run article after article proclaiming "the 2016 election was all about
racism." And we have a non-stop stream of this stuff from people like Anne Laurie over at balloon-juice.com:
"While the more-Leftist-than-thou "progressives" - including their latest high-profile figurehead
- are high-fiving each other in happy anticipation of potential public-outrage gigs over the next
four years, at least some people are beginning to push back on the BUT WHITE WORKING CLASS HAS
ALL THE SADS!!! meme so beloved of Very Serious Pundits."
That's the ticket, Democrats double down on the identity politics, keep telling the pulverized
middle class how great the economy is. Because that worked so well for you this election.
= = = mclaren@9:52 am: The rest of Obama's statistics are deceptive to the point of being
dissimulations -[ ] Only rich people and well-off professionals were able to keep their homes
through the 2009 financial collapse. = = =
Some food for thought in your post, but you don't help your argument with statements such as
this one. Rich people and well-off professionals make up at most 10% of the population. US homeownership
rate in 2005 was 68.8%, in 2015 is 63.7. That's a big drop and unquestionably represents a lot
of people losing their houses involuntarily. Still, even assuming no "well-off professionals"
lost their houses in the recession that still leaves the vast majority of the houses owned by
the middle class. Which is consistent with foreclosure and sales stats in middle class areas from
2008-2014. Remember that even with 20% unemployment 80% of the population still has a job.
Similarly, I agree that the recession and job situation was qualitatively worse than the quantitative
stats depicted. Once you start adding in hidden factors not captured by the official stats, though,
where do you stop? How do you know the underground economy isn't doing far better than it was
in the boom years of the oughts, thus reducing actual unemployment? Etc.
Finally, you need to address the fundamental question: assuming all you say is true (arguendo),
how does destroying the Affordable Care Act, Social Security, and Medicare help those in the economically
depressed areas? I got hit bad by the recession myself. Know what helped from 2010 forward? Knowing
that I could change jobs, keep my college-age children on my spouse's heath plan, not get hit
with pre-existing condition fraud, and that if worse came to worse in a couple years I would have
the plan exchange to fall back on. Kansas has tried the Ryan/Walker approach, seen it fail, doubled
down, and seen that fail 4x as badly. Now we're going to make it up on unit sales by trying the
Ryan plan nationally? How do you expect that to "work out for you"?
WLGR 11.16.16 at 4:11 pm
mclaren @ 7: "high-end programmers (wiped out by an ever-increasing flood of H1B via workers
from India and China)"
I'm on board with the general thrust of what you're saying, but this is way, way over
the line separating socialism from barbarism. The fact that
it's not even true is beside the point, as is the (quite frankly) fascist metaphor of "flood"
to describe human fucking beings traveling in search of economic security, at least as long as
you show some self-awareness and contrition about your language. Some awareness about the insidious
administrative structure of the H1-B program would also be nice - the way it works is, an individual's
visa status more or less completely depends on remaining in the good graces of their employer,
meaning that by design these employees have no conceivable leverage in any negotiation
over pay or working conditions, and a program of unconditional residency without USCIS as a de
facto strikebreaker would have much less downward pressure on wages - but anti-immigration rhetoric
remaining oblivious to actual immigration law is par for the course.
No, the real point of departure here from what deserves to be called "socialism" is in the
very act of blithely combining effects of automation (i.e. traditional capitalist competition
for productive efficiency at the expense of workers' economic security) and effects of offshoring/outsourcing/immigration
(i.e. racialized fragmentation of the global working class by accident of birth into those who
"deserve" greater economic security and those who don't) into one and the same depiction of developed-world
economic crisis. In so many words, you're walking right down neoliberal capitalism's ideological
garden path: the idea that it's not possible to be anticapitalist without being an economic nationalist,
and that every conceivable alternative to some form of Hillary Clinton is ultimately reducible
to some form of Donald Trump. On the contrary, those of us on the socialism side of "socialism
or barbarism" don't object to capitalism because it's exploiting American workers , we
object because it's exploiting workers , and insisting on this crucial point against all
chauvinist pressure ("workers of all lands , unite!") is what fundamentally separates our
anticapitalism from the pseudo-anticapitalism of fascists.
Maclaren: I'm with you. I well remember Obama and his "pivot to deficit reduction" and "green
shoots" while I was screaming at the TV 'No!! Not Now!"
And then he tried for a "grand bargain" with the Reps over chained CPI adjustment for SS, and
he became my active enemy. I was a Democrat. Where did my party go?
Just chiming in here: The implicit deal between the elites and the hoi polloi was that the economy
would be run with minimal competence. Throughout the west, those elites have broken faith with
the masses on that issue, and are being punished for it.
I'm less inclined to attach responsibility to Obama, Clinton or the Democratic Party than some.
If Democrats had their way, the economy would have been managed considerably more competently.
Always remember that the rejection of the elites wasn't just a rejection of Democrats. The
Republican elite also took it in the neck.
I'll also dissent from the view that race wasn't decisive in this election. Under different
circumstances, we might have had Bernie's revolution rather than Trump's, but Trump's coalition
is composed of overt racists and people who are indifferent to overt racism.
I find the discussions over identity politics so intensely frustrating. A lot of people
on the left have gone all-in on self-righteous anger
Identity politics (and to some extent probably the rhetorical style that goes with it) isn't
a 'left' thing, it's a liberal thing. It's a bκte noire for many on the left-see eg. Nancy Fraser's
work.
The Anglo/online genus what you get when you subtract class, socialism and real-world organisation
from politics and add in a lot of bored students and professionals with internet connections in
the context of a political culture (America's) that already valorises individual aggression to
a unique degree.
As polticalfoorball @15 says. The Democrats just didn't have the political muscle to deliver on
those things. There really is a dynamic thats been playing out: Democrats don't get enough governing
capacity because they did poorly in the election, which means their projects to improve the economy
are neutered or allowed through only in a very weakened form. Then the next election cycle the
neuterers use that failure as a weapon to take even more governing capacity away. Its not a failure
of will, its a failure to get on top of the political feedback loop.
@15 politicalfootball 11.16.16 at 5:27 pm
"Throughout the west, those elites have broken faith with the masses on that issue, and are being
punished for it."
Could you specify some "elite" that has been punished?
'the economic theories and programs ascribed to John M. Keynes and his followers; specifically
: the advocacy of monetary and fiscal programs by government to increase employment and spending'
and if it is done wisely like in most European countries before 2000 it is one of the least
'braindead' things.
But with the introduction of the Euro some governmental programs lead (especially in Spain)
to horrendous self-destructive housing and building bubbles which lead to the conclusion that
such programs which allow 'gambling with houses' are pretty much 'braindead'.
Or shorter: The quality of Keynesianism depends on NOT doing it 'braindead'.
Cranky Observer in #11 makes some excellent points. Crucially, he asks: "Finally, you need to
address the fundamental question: assuming all you say is true (arguendo), how does destroying
the Affordable Care Act, Social Security, and Medicare help those in the economically depressed
areas?"
There actually is a logic at work in the Rust Belt voters for voted for Trump. I don't
think it's good logic, but it makes sense in its own warped way. The calculation the Trump voters
seem to be making in the Rust Belt is that it's better to have a job and no health insurance and
no medicare and no social security, than no job but the ACA (with $7,000 deductibles you can't
afford to pay for anyway) plus medicare (since most of these voters are healthy, they figure they'll
never get sick) plus social security (most of these voters are not 65 or older, and probably think
they'll never age - or perhaps don't believe that social security will be solvent when they do
need it).
It's the same twisted logic that goes on with protectionism. Rust Belt workers figure that
it's better to have a job and not be able to afford a Chinese-made laptop than not to have a job
but plenty of cheap foreign-made widgets you could buy if you had any money (which you don't).
That logic doesn't parse if you run through the economics (because protectionism will destroy
the very jobs they think they're saving), but it can be sold as a tweet in a political campaign.
As for 63.7% home ownership stats in 2016, vast numbers of those "owned" homes were snapped
up by giant banks and other financial entities like hedge funds which then rented those homes
out. So the home ownership stats in 2016 are extremely deceptive. Much of the home-buying since
the 2009 crash has been investment purchases. Foreclosure home purchases for rent is now a huge
thriving business, and it's fueling a second housing bubble. Particularly because in many ways
it repeats the financially frothy aspects of the early 2000s housing bubble - banks and investment
firms are issuing junks bonds based on rosy estimates of ever-escalating rents and housing prices,
they use those junk financial instruments (and others like CDOs) to buy houses which then get
rented out at inflated prices, the rental income gets used to fund more tranches of investment
which fuels more buy-to-rent home buying. Rents have already skyrocketed far beyond incomes on
the East and West Coast, so this can't continue. But home prices and rents keep rising. There
is no city in the United States today where a worker making minimum wage can afford to rent a
one-bedroom apartment and have money left over to eat and pay for a car, health insurance, etc.
If home ownership were really so robust, this couldn't possibly be the case. The fact that rents
keep skyrocketing even as undocumented hispanics return to Mexico in record numbers while post-9/11
ICE restrictions have hammered legal immigration numbers way, way down suggests that home ownership
is not nearly as robust as the deceptive numbers indicate.
Political football in #15 remarks: "I'll also dissent from the view that race wasn't decisive
in this election. Under different circumstances, we might have had Bernie's revolution rather
than Trump's, but Trump's coalition is composed of overt racists and people who are indifferent
to overt racism."
Race was important, but not the root cause of the Trump victory. How do we know this? Tump
himself is telling us. Look at Trump's first announced actions - deport 3 million undocumented
immigrants who have committed crimes, ram through vast tax cuts for the rich, and end the inheritance
tax.
If Trump's motivation (and his base's motivation) was pure racism, Trump's first announced
action would be something like passing laws that made it illegal to marry undocumented workers.
His first act would be to roll back the legalization of black/white marriage and re-instate segregation.
Trump isn't promising any of that.
Instead Trump's (bad) policies are based around enriching billionaires and shutting down immigration.
Bear in mind that 43% of all new jobs created since 2009 went to immigrants and you start to realize
that Trump's base is reacting to economic pressure by scapegoating immigrants, not racism by itself.
If it were pure racism we'd have Trump and Ryan proposing a bunch of new Nuremberg laws. Make
it illegal to have sex with muslims, federally fund segregated black schools and pass laws to
force black kids to get bussed to them, create apartheid-style zones where only blacks can live,
that sort of thing. Trump's first announced actions involve enriching the fantastically wealthy
and enacting dumb self-destructive protectionism via punitive immigration control. That's protectionism
+ class war of the rich against everyone else, not racism. The protectionist immigration-control
+ deportation part of Trump's program is sweet sweet music to the working class people in the
Rust Belt. They think the 43% of jobs taken by immigrants will come back. They don't realize that
those are mostly jobs no one wants to do anyway, and that most of those jobs are already in the
process of getting automated out of existence.
The claim "Trump's coalition is composed of overt racists and people who are indifferent
to overt racism" is incomplete. Trump's coalition actually consists of 3 parts and it's highly
unstable: [1] racists, [2] plutocrats, [3] working class people slammed hard by globalization
for whom Democrats have done little or nothing.
Here's an argument that may resonate: the first two groups in Trump's coalition are unreachable.
Liberal Democrats can't sweet-talk racists out of being racist and we certainly have nothing to
offer the plutocrats. So the only part of Trump's coalition that is really reachable by liberal
Democrats is the third group. Shouldn't we be concentrating on that third group, then?
The good news is that Trump's coalition is unstable. The plutocrats and Rust Belters are
natural enemies. Since the plutocrats are perceived as running giant corporations that import
large numbers of non-white immigrants to lower wages, the racists are not big fans of that group
either.
Listen to Steve Bannon, a classic stormfront type - he says he wants to blow up both the
Democratic and the Republican party. He calls himself a "Leninist" in a recent interview and vows
to wreck all elite U.S. institutions (universities, giant multinationals), not just the Democratic
party.
Why? Because the stormfront types consider elite U.S. institutions like CitiBank as equally
culpable with Democrats in supposedly destroying white people in the U.S. According to Bannon's
twisted skinhead logic, Democrats are allegedly race traitors for cultural reasons, but big U.S.
corporations and elite institutions are supposedly equally guilty of economic race treason by
importing vast numbers of non-white immigrants via H1B visas, by offshoring jobs from mostly caucasian-populated
red states to non-white countries like India, Africa, China, and by using elite U.S. universities
to trawl the world for the best (often non-white) students, etc. Bannon's "great day of the rope"
includes the plutocrats as well as people of color.
These natural fractures in the Trump coalition are real, and Democrats can exploit them to
weaken and destroy Republicans. But we have to get away from condemning all Republicans as racists
because if we go down that route, we won't realize how fractured and unstable the Trump coalition
really is.
The short version of my thinking on the Obama stimulus is this: Keynesian stimulus spending is
a free lunch; it doesn't really matter what you spend money on up to a very generous point, so
it seems ready-made for legislative log-rolling. If Obama could not get a very big stimulus indeed
thru a Democratic Congress long out of power, Obama wasn't really trying. And, well-chosen spending
on pork barrel projects is popular and gets Congressional critters re-elected. So, again, if the
stimulus is small and the Democratic Congress doesn't get re-elected, Obama isn't really trying.
Again, it comes down to: by 2008, the Democratic Party is not a fit vehicle for populism,
because it has become a neoliberal vehicle for giant banks. Turns out that makes a policy difference.
Ps. Should prob add that identity politics isn't the same thing as feminism, anti-racism, LGBT
politics, etc. They're all needed now more than ever.
What we don't need more of imo is a particular liberal/middle-class form of those things with
particular assumptions (meritocratic and individualist), epistemology (strongly subjectivist)
and rhetorical style (which often aims humiliating opponents from a position of relative knowledge/status
rather than verbal engagement).
I don't know why I'm even having to say this, as it's so obvious. The "leftists" (for want of
a better word) and feminists who I know are also against neoliberalism. They are against the selloff
of public assets to enterprises for private profit. They want to see a solution to the rapidly
shrinking job market as technology replaces jobs (no, it's not enough for the Heroic Workers to
Seize the Means of Production the means of production are different now and the solution is
going to have to be more complex than just "bring back manufacturing" or "introduce tariffs".)
They want to roll back the tax cuts for the rich which have whittled down our revenue base this
century. They want corporations and the top 10% to pay their fair share, and concomitantly they
want pensioners, the unemployed and people caring for children to have a proper living wage.
They support a universal "single payer" health care system, which we social democratic squishy
types managed to actually introduce in the 1970s, but now we have to fight against right wing
governments trying to roll it back They support a better system of public education. They support
a science-based approach to climate change where it is taken seriously for the threat it is and
given priority in Government policy. They support spending less on the Military and getting out
of international disputes which we (Western nations) only seem to exacerbate.
This is not an exhaustive list.
Yet just because the same people say that the dominant Western countries (and my own) still
suffer from institutionalised racism and sexism, which is not some kind of cake icing but actually
ruin lives and kill people, we are "all about identity politics" and cannot possibly have enough
brain cells to think about the issues I described in para 1.
The slow recovery was only one factor. Wages have been stagnant since Reagan. And honestly,
if a white Republican president had stabilized the economy, killed Osama Bin Laden and got rid
of pre-existing condition issue with healthcare, the GOP would be BRAGGING all over it. Let's
remember that we have ONE party that has been devoted to racist appeals, lying and putting party
over country for decades.
Obama entered office as the economy crashed over a cliff. Instead of reforming the banks and
punishing the bankers who engaged in fraudulent activities, he waded into healthcare reform. Banks
are bigger today than they were in 2008. And tell me again, which bankers were punished for the
fraud? Not a one All that Repo 105 maneuvering, stuffing the retirement funds with toxic assets
etc. and so on all of that was perfectly legal? And if legal, all of that was totally bonusable?
Yes! In America, such failure is gifted with huge bonuses, thanks to the American taxpayer.
Meanwhile, homeowners saw huge drops the value of their homes. Some are still underwater with
the mortgage. It's a shame that politicians and reporters in DC don't get out much.
Concurrently, right before the election, ACA premiums skyrocketed. If you are self-insured,
ACA is NOT affordable. It doesn't matter that prior to ACA, premiums increased astronomically.
Obama promised AFFORDABLE healthcare. In my state, we have essentially a monopoly on health insurance,
and the costs are absurd. But that's in part because the state Republicans refused to expand Medicaid.
Don't underestimate HRC's serious issues. HRC had one speech for the bankers and another for
everyone else. Why didn't she release the GS transcripts? When did the Democrats become the party
of Wall Street?
She also made the same idiotic mistake that Romney did disparage a large swathe of American
voters (basket of deplorables is this year's 47%.)
And then we had a nation of voters intent on the outsider. Bernie Sanders had an improbable
run at it the Wikileaks emails showed that the DNC did what they could to get rid of him as
a threat.
Well America has done and gone elected themselves an outsider. Lucky us.
"... Each job offered under a federal employment assurance would be at a wage rate above the poverty threshold, and would include benefits like health insurance. A public sector job guarantee would establish a quality of work and the level of compensation offered for all jobs. The program would be great for the country: It could meet a wide range of the nation's physical and human infrastructure needs, ranging from the building and maintenance of roads, bridges and highways, to school upkeep and the provision of quality child care services"" ..."
""A lot of this has to do with the fact that Americans continue to be subjected to bad jobs
or unstable employment - and those who are employed often face stagnant or even declining wages.
The fragility of Americans' economic well-being is epitomized by the National Coalition for the
Homeless' estimate that 44 percent of homeless persons actually have jobs, albeit poorly paid
jobs.
The expansion of "flex work" arrangements, which make work hours uncertain, contribute significantly
to income volatility for workers in low-pay sectors of the economy. Around 50 percent of Americans
could not meet a $400 emergency expense by drawing upon their personal savings if they had to.
An alternative to these conditions is the adoption of a federal job guarantee, a policy that
would insure the option for anyone to work in a public sector program, similar to what the Works
Progress Administration established in the 1930s.
Each job offered under a federal employment assurance would be at a wage rate above the poverty
threshold, and would include benefits like health insurance. A public sector job guarantee would
establish a quality of work and the level of compensation offered for all jobs. The program would
be great for the country: It could meet a wide range of the nation's physical and human infrastructure
needs, ranging from the building and maintenance of roads, bridges and highways, to school upkeep
and the provision of quality child care services""
"... In February, this year, our basin's posted price went to $19 and change a couple different days, producers in the Bakken received in the teens many more days, and there was a negative posted price for North Dakota sour. ..."
"... Seems like Russian, OPEC and US producers have gone mad, trying to grow production in this price environment. Questionable senior management IMO, across all of them. ..."
"... Russian producers have been investing in new projects for the past several years and it simply does not make sense to postpone project start-ups with 90-100% readiness. This also applies to other large or relatively large conventional projects with long investment cycles (US GoM, Kashagan, Brazil, some projects in Norway, etc.). ..."
"... Iraq is more or less in the same situation, as its new projects have been developed for years. ..."
"... Iran is increasing production after embargo on its oil supplies was lifted, and it is keen to regain market share. ..."
"... Libya and Nigeria have increased production in October as they restarted capacity that was previously shut-in due to internal instability. ..."
"... My comments were somewhat in sarcasm. I do not know enough about the timelines or costs of projects outside of onshore US to make an intelligent comment. I hope that by the end of 2017, projects outside of the US will begin to slow. I have little hope the Permian will slow until the New York bankers leave Midland, TX. ..."
In February, this year, our basin's posted price went to $19 and change a couple different
days, producers in the Bakken received in the teens many more days, and there was a negative posted
price for North Dakota sour.
I thought that was nonsense too. So did Russia, as I recall, who began to talk to OPEC about
some production cuts around that time.
I don't agree w the Hills Group.
However, prices have been very low in 2016. Our average price thru 10 months has been $37,
and here we are today at $38.50. I think that likewise is nonsense.
Seems like Russian, OPEC and US producers have gone mad, trying to grow production in this
price environment. Questionable senior management IMO, across all of them.
I did not mean some specific cases of regional oil prices (like the Bakken crude), but international
benchmarks, Brent and WTI.
As regards Russian, OPEC and US producers, these are different cases.
Russian producers have been investing in new projects for the past several years and it simply
does not make sense to postpone project start-ups with 90-100% readiness. This also applies to
other large or relatively large conventional projects with long investment cycles (US GoM, Kashagan,
Brazil, some projects in Norway, etc.).
Iraq is more or less in the same situation, as its new projects have been developed for years.
Iran is increasing production after embargo on its oil supplies was lifted, and it is keen
to regain market share.
Libya and Nigeria have increased production in October as they restarted capacity that was
previously shut-in due to internal instability.
The U.S. LTO is a completely different case, as these are projects with a very short investment
cycle. And indeed it doesn't make sense for heavily indebted shale companies to increase capex
in the current market situation.
My comments were somewhat in sarcasm. I do not know enough about the timelines or costs of projects outside of onshore US to make
an intelligent comment. I hope that by the end of 2017, projects outside of the US will begin to slow. I have little
hope the Permian will slow until the New York bankers leave Midland, TX.
"... But it gets more apparent with each report they are concerned with a sudden drop in supply in the medium term (I think supply will decline gradually through 2017 but then accelerate in 2Q2018 and fall off a cliff in 2019 given current project planning. ..."
"... It is now becoming too late to do much that will impact supplies then and with the likelihood of low prices through next year and few attractive recent discoveries (and getting worse each quarter in that respect) there are unlikely to be many more FIDs next year than this I think only 12 so far and more gas than oil therefore that supply drought will probably extend through 2020. ..."
"... Decline rates could increase on existing fields at the same time as in-fill drilling marginal gains start to decline and the impact of reduced maintenance and brownfield spending during these low price years start to impact. ..."
"... People may point to US LTO fields to be able to quickly fill any gap, but I'd point out it took about 5 years for Bakken to ramp up to 1 mmbpd ..."
It looks like this month (Nov.) will probably be a new global oil supply record barring major
disruptions anywhere. But it gets more apparent with each report they are concerned with a sudden
drop in supply in the medium term (I think supply will decline gradually through 2017 but then
accelerate in 2Q2018 and fall off a cliff in 2019 given current project planning.
It is now becoming
too late to do much that will impact supplies then and with the likelihood of low prices through
next year and few attractive recent discoveries (and getting worse each quarter in that respect)
there are unlikely to be many more FIDs next year than this I think only 12 so far and more
gas than oil therefore that supply drought will probably extend through 2020.
Decline rates
could increase on existing fields at the same time as in-fill drilling marginal gains start to
decline and the impact of reduced maintenance and brownfield spending during these low price years
start to impact.
People may point to US LTO fields to be able to quickly fill any gap, but I'd point out it
took about 5 years for Bakken to ramp up to 1 mmbpd, and that was when the sweet spots were available
and with an industry not already loaded down with debt. That rate is not much better than a new
conventional basin with similar reserves would have achieved (as long as it wasn't in Kazahkstan
of course).
"It is not the role of the IEA to urge any oil industry player to take one course of
action rather than another, and we are not doing so now. Over time, market forces will do their
job and the oil price will respond to the signals provided by demand and supply. What the IEA
has argued for consistently is the need for investments necessary to meet rising oil demand.
Such investments ensure that the market remains close to balance and that prices are as stable
and as fair for both producers and consumers as can ever be possible in such a dynamic industry."
Related to ExxonMobil they are the only major company so far this year to have had a couple
of good successes with exploration, that is a reverse previous history when they were known having
much more success "drilling on Wall Street" to boost their reserves part of the reason for the
Mobil acquisition who always did pretty with with wildcatting.
It would be interesting to know how their reserves (and other companies as well) are broken
down between developed and undeveloped for oil and gas, before Liza in Guyana and the Owowo (Nigeria)
discovery this year they were pretty short of oil projects of any kind, irrespective of price,
except in support of some OPEC countries on buyback contracts, and I don't know how that oil is
counted against their reserves if at all.
Other majors might be in worse shape than them once
the current bubble of projects works through.
"... The approved projects coming on line are about 500 kbpd in 2019, 700 in 2020 and 200 in 2021. There will also be about 1 mmbpd still ramping up, but I think the supply will be slightly in deficit and any stock overhang will have largely gone by the end of 2018 (assuming demand stays as predicted). In terms of decline existing fields it is minimum 3.3% (based on Core labs) up to 5.5% by Rystad but I think the cuts in maintenance and brownfield work, exhaustion of marginal in-fill drilling benefits and extended use of horizontal drilling over the last 15 years will mean this is likely to accelerate. ..."
"... I, like many, quote start-up date for end of project development but often it takes 12 to 18 months to ramp up to plateau, so all that lack of new supply in 2019 to 2021 can impact through to 2023. ..."
Price depends on supply and demand I don't know what is going to happen in demand: it seems
to be predictable until suddenly it isn't. Recessions can have reasonably large impacts to demand
and these have proportionally larger impacts on price.
The approved projects coming on line are about 500 kbpd in 2019, 700 in 2020 and 200 in 2021.
There will also be about 1 mmbpd still ramping up, but I think the supply will be slightly in
deficit and any stock overhang will have largely gone by the end of 2018 (assuming demand stays
as predicted). In terms of decline existing fields it is minimum 3.3% (based on Core labs) up
to 5.5% by Rystad but I think the cuts in maintenance and brownfield work, exhaustion of marginal
in-fill drilling benefits and extended use of horizontal drilling over the last 15 years will
mean this is likely to accelerate.
Note there will of course be other projects added, but another low price year in 2017 with
additional cuts (e.g. see CoP, Statoil, PetroBras, Pemex news over the last weeks) and there just
won't be enough time to get much online before 2021, especially as the service industries and
development groups in the E&Ps are still getting thinned out (see Weatherford, Heerema, Hess news
recently).
I, like many, quote start-up date for end of project development but often it takes
12 to 18 months to ramp up to plateau, so all that lack of new supply in 2019 to 2021 can impact
through to 2023.
"... It would appear that perhaps a lot of infill drilling is taking place in Saudi Arabia, Kuwait and UAE in order to achieve these recent oil production values. It'll be interesting to see how this infill drilling might one day impact the decline side of the curve. ..."
"... According to Bedford Hill and the oil engineers at the Hills Group, Saudi oil production will experience at SENECA CLIFF like decline. I agree. ..."
"... I'm no expert but from what I understand infill drilling causes what might have been a roughly Hubbert shaped production curve to flatten out at the top for a while and then in the future experience a steeper decline curve; basically representing future production on the Hubbert curve being brought forward to maintain a plateau at the peak. This does seem to move the curve profile from Hubbert to Seneca, so to speak. ..."
"... This image from Matt certainly represents a plateau at approx 72 million barrels a day taking place in all jurisdictions outside of Canada and USA. ..."
"... I'm very interested in the timing and the steepness of this impending decline. Figure 10 mentioned above shows the rig count in Kuwait, Saudi and UAE really taking of 'bigly' in 2010-2011 'ish. ..."
It would appear that perhaps a lot of infill drilling is taking place in Saudi Arabia,
Kuwait and UAE in order to achieve these recent oil production values. It'll be interesting to
see how this infill drilling might one day impact the decline side of the curve.
I'm no expert but from what I understand infill drilling causes what might have been a roughly
Hubbert shaped production curve to flatten out at the top for a while and then in the future experience
a steeper decline curve; basically representing future production on the Hubbert curve being brought
forward to maintain a plateau at the peak. This does seem to move the curve profile from Hubbert
to Seneca, so to speak.
This image from Matt certainly represents a plateau at approx 72 million barrels a day
taking place in all jurisdictions outside of Canada and USA.
I'm very interested in the timing and the steepness of this impending decline. Figure 10
mentioned above shows the rig count in Kuwait, Saudi and UAE really taking of 'bigly' in 2010-2011
'ish.
"... The "my way" or the highway rhetoric from Clinton supporters on the campaign was sickening. When Bush was called a warmonger for Iraq, that was fine. When Clinton was called a warmonger for Iraq and Libya, the Clintonites went on the offensive, often throwing around crap like "if she was a man, she wouldn't be a warmonger!" ..."
"... On racism: "what I can say, from personal experience, is that the racism of my youth was always one step removed. I never saw a family member, friend, or classmate be mean to the actual black people we had in town. We worked with them, played video games with them, waved to them when they passed. What I did hear was several million comments about how if you ever ventured into the city, winding up in the "wrong neighborhood" meant you'd get dragged from your car, raped, and burned alive. Looking back, I think the idea was that the local minorities were fine as long as they acted exactly like us." ..."
"... I'm telling you, the hopelessness eats you alive. And if you dare complain, some liberal elite will pull out their iPad and type up a rant about your racist white privilege. Already, someone has replied to this with a comment saying, "You should try living in a ghetto as a minority!" Exactly. To them, it seems like the plight of poor minorities is only used as a club to bat away white cries for help. Meanwhile, the rate of rural white suicides and overdoses skyrockets. Shit, at least politicians act like they care about the inner cities." ..."
"... And the rural folk are called a "basket of deplorables" and other names. If you want to fight racism, a battle that is Noble and Honorable, you have to understand the nuances between racism and hopelessness. The wizard-wannabe idiots are a tiny fringe. The "deplorables" are a huge part of rural America. If you alienate them, you're helping the idiots mentioned above. ..."
Erm, atheist groups are known to target smaller Christian groups with lawsuits. A baker was sued
for refusing to bake a cake for a Gay Wedding. She was perfectly willing to serve the couple,
just not at the wedding. In California we had a lawsuit over a cross in a park. Atheists threatened
a lawsuit over a seal. Look, I get that there are people with no life out there, but why are they
bringing the rest of us into their insanity, with constant lawsuits. There's actually a concept
known as "Freedom from Religion" what the heck? Can you imagine someone arguing about "Freedom
from Speech" in America? But it's ok to do it to religious folk! And yes, that includes Muslims,
who had to fight to build a Mosque in New York. They should've just said it was a Scientology
Center
The "my way" or the highway rhetoric from Clinton supporters on the campaign was sickening.
When Bush was called a warmonger for Iraq, that was fine. When Clinton was called a warmonger
for Iraq and Libya, the Clintonites went on the offensive, often throwing around crap like "if
she was a man, she wouldn't be a warmonger!"
The problem with healthcare in the US deserves its own thread, but Obamacare did not fix it;
Obamacare made it worse, especially in the rural communities. The laws in schools are fundamentally
retarded. A kid was suspended for giving a friend Advil. Another kid suspended for bringing in
a paper gun. I could go on and on. A girl was expelled from college for trying to look gangsta
in a L'Oreal mask. How many examples do you need? Look at all of the new "child safety laws" which
force kids to leave in a bubble. And when they enter the Real World, they're fucked, so they pick
up the drugs. In cities it's crack, in farmvilles it's meth.
Hillary didn't win jack shit. She got a plurality of the popular vote. She didn't win it, since
winning implies getting the majority. How many Johnson votes would've gone to Trump if it was
based on popular vote, in a safe state? Of course the biggest issue is the attack on the way of
life, which is all too real. I encourage you to read this, in order to understand where they're
coming from:
http://www.cracked.com/blog/6-reasons-trumps-rise-that-no-one-talks-about/
"Nothing that happens outside the city matters!" they say at their cocktail parties, blissfully
unaware of where their food is grown. Hey, remember when Hurricane Katrina hit New Orleans? Kind
of weird that a big hurricane hundreds of miles across managed to snipe one specific city and
avoid everything else. To watch the news (or the multiple movies and TV shows about it), you'd
barely hear about how the storm utterly steamrolled rural Mississippi, killing 238 people and
doing an astounding $125 billion in damage. But who cares about those people, right? What's newsworthy
about a bunch of toothless hillbillies crying over a flattened trailer? New Orleans is culturally
important. It matters. To those ignored, suffering people, Donald Trump is a brick chucked through
the window of the elites. "Are you assholes listening now?"
On racism: "what I can say, from personal experience, is that the racism of my youth was always
one step removed. I never saw a family member, friend, or classmate be mean to the actual black
people we had in town. We worked with them, played video games with them, waved to them when they
passed. What I did hear was several million comments about how if you ever ventured into the city,
winding up in the "wrong neighborhood" meant you'd get dragged from your car, raped, and burned
alive. Looking back, I think the idea was that the local minorities were fine as long as they
acted exactly like us."
"They're getting the shit kicked out of them. I know, I was there. Step outside of the city,
and the suicide rate among young people fucking doubles. The recession pounded rural communities,
but all the recovery went to the cities. The rate of new businesses opening in rural areas has
utterly collapsed."
^ That, I'd say, is known as destroying their lives. Also this:
"In a city, you can plausibly aspire to start a band, or become an actor, or get a medical
degree. You can actually have dreams. In a small town, there may be no venues for performing arts
aside from country music bars and churches. There may only be two doctors in town - aspiring to
that job means waiting for one of them to retire or die. You open the classifieds and all of the
job listings will be for fast food or convenience stores. The "downtown" is just the corpses of
mom and pop stores left shattered in Walmart's blast crater, the "suburbs" are trailer parks.
There are parts of these towns that look post-apocalyptic.
I'm telling you, the hopelessness eats you alive. And if you dare complain, some liberal elite
will pull out their iPad and type up a rant about your racist white privilege. Already, someone
has replied to this with a comment saying, "You should try living in a ghetto as a minority!"
Exactly. To them, it seems like the plight of poor minorities is only used as a club to bat away
white cries for help. Meanwhile, the rate of rural white suicides and overdoses skyrockets. Shit,
at least politicians act like they care about the inner cities."
And the rural folk are called a "basket of deplorables" and other names. If you want to fight
racism, a battle that is Noble and Honorable, you have to understand the nuances between racism
and hopelessness. The wizard-wannabe idiots are a tiny fringe. The "deplorables" are a huge part
of rural America. If you alienate them, you're helping the idiots mentioned above.
"... What Is Lost by Burying the Trans-Pacific Partnership? The New York Times : "The Americans will have to explain their failure on the trade agreement to foreign leaders gathered in Lima, Peru, while China's leader, Xi Jinping, is there seeking progress toward an emerging alternative to the Trans-Pacific Partnership - the Regional Comprehensive Economic Partnership, known as R.C.E.P., which includes China, Japan and 14 other Asian countries but excludes the United States. ..."
"... 'In the absence of T.P.P., countries have already made it clear that they will move forward in negotiating their own trade agreements that exclude the United States,' Mr. Obama's Council of Economic Advisers wrote days before the election. 'These agreements would improve market access and trading opportunities for member countries while U.S. businesses would continue to face existing trade barriers.'" ..."
"... Foreign leaders and foreign populations hated the TPP because it wasn't a trade deal; it was a giveaways-to-big-corporations deal full of stuff about extending copyrights for Mickey Mouse and so on. ..."
I don't know enough about the finer points of the TPP to be for or against it.
But this article suggests that there are plans to exclude the US if it doesn't choose to be
a factor in world affairs.
What Is Lost by Burying the Trans-Pacific Partnership? The New York Times : "The Americans
will have to explain their failure on the trade agreement to foreign leaders gathered in Lima,
Peru, while China's leader, Xi Jinping, is there seeking progress toward an emerging alternative
to the Trans-Pacific Partnership - the Regional Comprehensive Economic Partnership, known as R.C.E.P.,
which includes China, Japan and 14 other Asian countries but excludes the United States.
'In the absence of T.P.P., countries have already made it clear that they will move forward
in negotiating their own trade agreements that exclude the United States,' Mr. Obama's Council
of Economic Advisers wrote days before the election. 'These agreements would improve market access
and trading opportunities for member countries while U.S. businesses would continue to face existing
trade barriers.'"
Foreign leaders and foreign populations hated the TPP because it wasn't a trade deal; it was a
giveaways-to-big-corporations deal full of stuff about extending copyrights for Mickey Mouse and
so on.
China's trade deal is an *actual* trade deal and as such much more popular. We could join *it*.
"... "Class first" amongst men of the left has always signaled "ME first." What else could it mean? ..."
"... So "Black Lives Matter" actually means "Black Lives Matter First". Got it. So damn tired of identity politics. ..."
"... Meanwhile, in the usual way of such things, #BlackLivesMatter hashtag activism became fashionable, as the usual suspects were elevated to celebrity status by elites. Nothing, of course, was changed in policy, and so in a year or so, matters began to bubble on the ground again. ..."
"... I'm not tired of identity politics. I'm just tired of some identity-groups accusing other identity-groups of "identity-politics". I speak in particular of the Identity Left. ..."
"... Identity politics, any identity, is going to automatically split voters into camps and force people to 'pick' a side. ..."
"... The Faux Feminism of Hillary Rodham Clinton, I and many other writers argued that the bourgeois feminism Clinton represents works against the interests of the vast majority of women. This has turned out to be even more true than we anticipated. That branding of feminism has delivered to us the most sexist and racist president in recent history: Donald Trump. ..."
"... Hillary spoke to the million-dollar feminists-of-privilege who identified with her multi-million dollar self and her efforts to break her own Tiffany Glass ceiling. And she worked to get many other women with nothing to gain to identify with Hillary's own breaking of Hillary's own Tiffany Glass ceiling. ..."
"... For me (at least) the essence of the "Left" is justice. When we speak of Class we are putting focus on issues of economic justice. Class is the material expression of economic (and therefore political) stratification. Class is the template for analysing the power dynamics at play in such stratification. ..."
"... in the absence of economic justice, it's very difficult to obtain ANY kind of justice - whether such justice be of race, gender, legal, religious or sexual orientation. ..."
"... I find it indicative that the 1% (now) simply don't care one way or another about race or gender etc, PROVIDED it benefits or, has no negative effects on their economic/political interests. ..."
"... "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." ..."
"... In ship sinking incidents, where a lot of people are dumped in the water, many adopt the strategy of trying to use others as flotation devices, pushing them under while the "rich class" tootle off in the lifeboats. Sounds like a winner, all right. ..."
"... The rich class has enlisted the white indentured servants as their Praetorian Guard. The same play as after Bacon's Rebellion. ..."
"... Is what is actually occurring another Kristallnacht, or the irreducible susurrus of meanness and idiocy that is part of every collection of humans? It would be nice not to get suckered into elevating the painful minima over the importance of getting ordinary people to agree on a real common enemy, and organizing to claim and protect. ..."
"... If even one single banker had gone to jail for the mess (fed by Bush I, Clinton, and Bush II) that blew up in 2008, we would be having a different conversation. We are in a huge legitimacy crisis, in part because justice was never served on those who made tens of millions via fraud. ..."
"... The Malignant Overlords - the King or Queen, the Financial Masters of the Universe,, the tribal witch doctor- live by grazing on the wealth of the natural world and the productivity of their underlings. There are only a few thousand of them but they control finance and the Money system, propaganda organizations (in the USA called the Media) land and agriculture, "educational" institutions and entire armies of Homeland Insecurity police. ..."
"... Under them there are the sycophants generals and officers, war profiteers and corporate CEO's, the intelligentsia, journalists, fake economists, and entertainment and sports heroes who grow fat feasting on the morsels left over after the .0001% have fed. And far below the Overlords are the millions of professional Bureaucrats whose job security requires unquestioning servitude. ..."
"... Race, gender identity, religion, etc. are the false dichotomies by which the oligarchs divide us. Saudi princes, African American millionaires, gay millionaires etc. are generally treated the same by the oligarchs as wasp millionaires. The true dichotomy is class, that is the dichotomy which dare not speak its name. ..."
"... For Trump it was so easy. He just says something that could be thought of as racist and then his supporters watch as the media morphs his words, removes context, or just ignores any possible non-racist motivations for his words. ..."
"... Just read the actual Mexican- rapists quote. Completely different then reported by the media. Fifteen years ago my native born Mexican friend said almost exactlly the same thing. ..."
"... whilst his GOP colleagues publicly recoiled in horror, there is no question that Trump was merely making explicit what Republicans had been doing for decades since the days of Nixon in 1968. The dog whistle was merely replaced by a bull horn. ..."
"... Yes, class identity can be a bond that unites. However, in the US the sense of class identity remains underdeveloped. In fact, it is only with the Sanders campaign that large swaths of the American public have had practical and sustained exposure to the concept of class as a political force. For most of the electorate, the language of class is still rather alien, particularly since the "equality of opportunity" narrative even now is not completely overthrown. ..."
"... It seems inevitable that populist sentiment, which both Sanders and Trump have used to electoral advantage, will spill over into a variety of economic nationalism. ..."
"... Obama was a perfect identity candidate, i.e., not only capable of getting the dem nomination, but the presidency and than not jailing banksters NO MATTER WHAT THEY DID, OR WILL DO ..."
"... One truism about immigration, to pick a topical item, is that uncontrolled immigration leads to overwhelming an area whether city, state or country. Regardless of how one feels about the other aspects of immigration, there are some real, unacknowledged limits to the viability of the various systems that must accommodate arrivals, particularly in the short term. Too much of a perceived ..."
"... There is an entrenched royal court, not unlike Versailles in some respects, where the sinecures, access to the White House tennis court (remember Jimmy Carter and his forest for the trees issues) or to paid "lunches in Georgetown" or similar trappings. Inflow of populist or other foreign ideas behind the veil of media and class secrecy represents a threat to overwhelm, downgrade (Sayeth Yogi Berra: It is so popular that nobody goes there anymore) or remove those perks, and to cause some financial, psychic or other pain to the hangers-on. ..."
"... Pretty soon, word filters out through WikiLeaks, or just on the front page of a newspaper in the case of the real and present corruption (What do you mean nobody went to jail for the frauds?). In those instances, the tendency of a populace to remain aloof with their bread and circuses and reality shows and such gets strained. ..."
"... Some people began noticing and the cognitive dissonance became to great to ignore no matter how many times the messages were delivered from on high. That led to many apparent outbursts of rational behavior ..."
if poor whites were being shot by cops at the rate urban blacks are, they would be screaming
too. blm is not a corporate front to divide us, any more than acorn was a scam to help election
fraud.
It's lazy analysis to suggest Race was a contributing factor. On the fringes, Trump supporters
may have racial overtones, but this election was all about class. I applaud sites like NC in continually
educating me. What you do is a valuable service.
"We won't need a majority of the dying "white working class" in our present and future feminine,
multiracial American working class. Just a minority."
Indeed, this site has featured links to articles elaborating the demographic composition of
today's "working class". And yet we still have people insisting that appeals to the working class,
and policies directed thereof, must "transcend" race and gender.
And, of course this "class first" orientation became a bone of contention between some loud
mouthed "men of the left" during the D-Party primary and "everyone else" and that's why the "Bernie
Bro" label stuck. It didn't help the Sanders campaign either.
"Class first" amongst men of the left has always signaled "ME first." What else could it
mean?
This is, actually, complicated. It's a reasonable position that black lives don't
matter because they keep getting whacked by cops and the cops are never held accountable. Nobody
else did anything, so people on the ground stood up, asserted themselves, and as part
of that created #BlackLivesMatter as an online gathering point; all entirely reasonable. #AllLivesMatter
was created, mostly as deflection/distraction, by people who either didn't like the movement,
or supported cops, and of course if all lives did matter to this crowd, they would have
done something about all the police killings in the first place.
Meanwhile, in the usual way of such things, #BlackLivesMatter hashtag activism became fashionable,
as the usual suspects were elevated to celebrity status by elites. Nothing, of course, was changed
in policy, and so in a year or so, matters began to bubble on the ground again.
Activist time (we might say) is often slower than electoral time. But sometimes it's faster;
see today's Water Cooler on the #AllOfUs people who occupied Schumer's office (and high time,
too). To me, that's a very hopefully sign. Hopefully, not a bundle of groups still siloed by identity
(and if that's to happen, I bet that will happen by working together. Nothing abstract).
I'm not tired of identity politics. I'm just tired of some identity-groups accusing other
identity-groups of "identity-politics". I speak in particular of the Identity Left.
"We won't need a majority of the dying "white working class" in our present and future
feminine, multiracial American working class. Just a minority."
That statement is as myopic a vision as the current political class is today. The statement
offends another minority, or even a possible majority. Identity politics, any identity, is
going to automatically split voters into camps and force people to 'pick' a side.
In False Choices: The Faux Feminism of Hillary Rodham Clinton, I and many other writers
argued that the bourgeois feminism Clinton represents works against the interests of the vast
majority of women. This has turned out to be even more true than we anticipated. That branding
of feminism has delivered to us the most sexist and racist president in recent history: Donald
Trump.
I wonder if there is an even simpler more colorful way to say that. Hillary spoke to the
million-dollar feminists-of-privilege who identified with her multi-million dollar self and her
efforts to break her own Tiffany Glass ceiling. And she worked to get many other women with nothing
to gain to identify with Hillary's own breaking of Hillary's own Tiffany Glass ceiling.
If the phrase "Tiffany Glass ceiling" seems good enough to re-use, feel free to re-use it one
and all.
For me (at least) the essence of the "Left" is justice. When we speak of Class we are putting
focus on issues of economic justice. Class is the material expression of economic (and therefore
political) stratification. Class is the template for analysing the power dynamics at play in such
stratification.
Class is the primary political issue because it not only affects everyone, but in the absence
of economic justice, it's very difficult to obtain ANY kind of justice - whether such justice
be of race, gender, legal, religious or sexual orientation.
I find it indicative that the 1% (now) simply don't care one way or another about race or gender
etc, PROVIDED it benefits or, has no negative effects on their economic/political interests.
"Just how large a spike in hate crime there has been remains uncertain, however. Several reports
have been proven false, and Potok cautioned that most incidents reported to the Southern Poverty
Law Center did not amount to hate crime.
All us ordinary people are insecure. Planet is becoming less habitable, war everywhere, ISDS
whether we want it or not, group sentiments driving mass behaviors with extra weapons from our
masters, soil depletion, water becoming a Nestle subsidiary, all that. But let us focus on maintaining
our favored position as more insecure than others, with a "Yes, but" response to what seems to
me the fundamental strategic scene:
"There's class warfare, all right, but it's my class, the rich class, that's making war,
and we're winning."
Those mostly white guys, but a lot of women too, the "rich classs," are ORGANIZED, they have
a pretty simple organizing principle ("Everything belong us") that leads to straightforward strategies
and tactics to control all the levers and fulcrums of power. The senators in Oregon are "on the
right side" of a couple of social issues, but they both are all in for "trade deals" and other
big pieces of the "rich class's" ground game. In ship sinking incidents, where a lot of people
are dumped in the water, many adopt the strategy of trying to use others as flotation devices,
pushing them under while the "rich class" tootle off in the lifeboats. Sounds like a winner, all
right.
The comparison with 9/11 is instructive. That is not minimizing hate crimes. Within days after
9/11, my Sikh neighbor was assaulted and called a "terrorist". He finally decided to stop wearing
a turban, cut his hair, and dress "American". My neighborhood was not ethnically tense, but it is ethnically diverse, and my neighbor had
never seen his assailant before.
Yes, the rich classes are organized organized to fleece us with unending wars. But don't minimize
other people's experience of what constitutes a hate crime.
In 1875, the first step toward the assassination of a black, "scalawag", or "carpetbagger"
public official in the South was a friendly visit from prominent people asking him to resign,
the second was night riders with torches, the third was night riders who killed the public official.
Jury nullification (surprise, surprise) made sure that no one was punished at the time. In 1876,
the restoration of "home rule' in Southern states elected in a bargain Rutherford B. Hayes, who
ended Reconstruction and the South entered a period that cleansed "Negroes, carpetbaggers, and
scalawags" from their state governments and put the Confederate generals and former plantation
owners back in charge. That was then called The Restoration. Coincidence that that is the name
of David Horowitz's conference where Donna Brazile was hobnobbing with James O'Keefe?
The rich class has enlisted the white indentured servants as their Praetorian Guard. The
same play as after Bacon's Rebellion.
Not minimizing - my very peaches-and-cream Scots-English daughter is married to a gentleman
from Ghana whose skin tones are about as dark as possible.
the have three beautiful children, and are fortunate to live in an area that is a hotbed of
"tolerance." I have many anecdotes too.
Do anecdotes = reality in all its complexity? Do anecdotes = policy? Is what is
actually occurring another Kristallnacht, or the irreducible susurrus of meanness and idiocy
that is part of every collection of humans? It would be nice not to get suckered into
elevating the painful minima over the importance of getting ordinary people to agree on a real
common enemy, and organizing to claim and protect.
If even one single banker had gone to jail for the mess (fed by Bush I, Clinton, and Bush
II) that blew up in 2008, we would be having a different conversation. We are in a huge legitimacy
crisis, in part because justice was never served on those who made tens of millions via fraud.
When there's no justice, its as if the society's immune system is not functioning.
Expect more strange things to appear, almost all of them aimed at sucking the remaining resources
out of the system with the knowledge that they'll never face consequences for looting. The fact
that they're killing the host does not bother them.
Corruption is both cause & effect of gross wealth inequities. Of course to the 1% it's not
corruption so much as merely what is owed as of a right to the privileged. (Thus, the most fundamental
basis of liberal democracy turns malignant: that ALL, even rulers & law makers are EQUALLY bound
by the Law).
The Malignant Overlords - the King or Queen, the Financial Masters of the Universe,, the
tribal witch doctor- live by grazing on the wealth of the natural world and the productivity of
their underlings. There are only a few thousand of them but they control finance and the Money
system, propaganda organizations (in the USA called the Media) land and agriculture, "educational"
institutions and entire armies of Homeland Insecurity police.
Under them there are the sycophants generals and officers, war profiteers and corporate
CEO's, the intelligentsia, journalists, fake economists, and entertainment and sports heroes who
grow fat feasting on the morsels left over after the .0001% have fed. And far below the Overlords
are the millions of professional Bureaucrats whose job security requires unquestioning servitude.
Once upon a time there was what was known as the Middle Class who taught school or built things
in factories, made mortgage payments on a home, and bought a new Ford every other year. But they
now are renters, moving from one insecure job in one state to an insecure one across the country.
How else are they to maintain their sense of self-worth except by identifying a tribe that is
under them? If the members of the inferior tribe look just like you they might actually be more
successful and not a proper object of scorn. But if they have a black or brown skin and speak
differently they are the perfect target to make you feel that your life is not a total failure.
It's either that or go home and kick the dog or beat the wife. Or join the Army where you can
go kill a few foreigners and will always know your place in the hierarchy.
Class "trumps" race, but racial prejudice has its roots far back in human social history as
a tribal species where the "other" was always a threat to the tribe's existence.
Anyone who thinks it is only class and not also race is wearing some very strange blinders
No one with any sense is saying that, Katharine, and constantly bringing it up as some kind
of necessary argument (which, you may recall, was done as a way of trying to persuade people of
color Sanders wasn't working for them in the face of his entire history) perpetuates the falsehood
dichotomy that it has to be one or the other.
I can understand the desire to reduce the problems to a single issue that can then be subjected
to our total focus, but that's what's been done for the last fifty years; it doesn't work. Life
is too complex and messy to be fixed using magic pills, and Trump's success because those who've
given up hope of a cure are still enormously vulnerable to snake oil.
Race, gender identity, religion, etc. are the false dichotomies by which the oligarchs divide
us. Saudi princes, African American millionaires, gay millionaires etc. are generally treated
the same by the oligarchs as wasp millionaires. The true dichotomy is class, that is the dichotomy
which dare not speak its name.
yes, racism still exist, but the Democrats want to make it the primary issue of every election
because it is costs them nothing. I've never liked the idea of race based reparations because
they seem like another form of racism.
However, if the neolibs really believe racial disparity
and gender issues are the primary problems, why don't they ever support reparations or a large
tax on rich white people to pay the victims of racism and sexism and all the other isms?
Perhaps
its because that would actually cost them something. I think what bothers most of the Trumpets
out here in rural America is not race but the elevation of race to the top of the political todo
list.
For Trump it was so easy. He just says something that could be thought of as racist and
then his supporters watch as the media morphs his words, removes context, or just ignores any
possible non-racist motivations for his words.
Just read the actual Mexican- rapists quote. Completely
different then reported by the media. Fifteen years ago my native born Mexican friend said almost exactlly the same thing. Its a trap the media walks right into. I think most poor people of whiteness
do see racism as a sin, just not the only or most awful sin. As for Trump being a racist, I think
he would have to be human first.
whilst his GOP colleagues publicly recoiled in horror, there is no question that Trump
was merely making explicit what Republicans had been doing for decades since the days of Nixon
in 1968. The dog whistle was merely replaced by a bull horn.
Spot-on statement. Was watching Fareed Zakaria (yeah, I know, but he makes legit points from
time to time) and was pleasantly surprised that he called Bret Stephens, who was strongly opposed
to Trump, out on this. To see Stephens squirm like a worm on a hook was priceless.
" what divides people rather than what unites people "
Yes, class identity can be a bond that unites. However, in the US the sense of class identity
remains underdeveloped. In fact, it is only with the Sanders campaign that large swaths of the
American public have had practical and sustained exposure to the concept of class as a political
force. For most of the electorate, the language of class is still rather alien, particularly since
the "equality of opportunity" narrative even now is not completely overthrown.
Sanders and others on an ascendant left in the Democratic Party - and outside the Party - will
continue to do the important work of building a sense of class consciousness. But more is needed,
if the left wants to transform education into political power. Of course, organizing and electing
candidates at the local and state level is enormously important both to leverage control of local
institutions and - even more important - train and create leaders who can effectively use the
tools of political power. But besides this practical requirement, the left also needs to address
- or co-opt, if you will - the language of economic populism, which sounds a lot like economic
nationalism.
It seems inevitable that populist sentiment, which both Sanders and Trump have used to
electoral advantage, will spill over into a variety of economic nationalism. Nationalist
sentiment is the single most powerful unifying principle available, certainly more so than the
concept of class, at least in America. I don't see that changing anytime soon, and I do see the
Alt-Right using nationalism as a lever to try to coax the white working class into their brand
of identity politics. But America's assimilationist, "melting pot" narrative continues to be attractive
to most people, even if it is under assault in some quarters. So I think moving from nationalism
to white identity politics will not so easy for the Alt-Right. On the other hand, picking up the
thread of economic nationalism can provide the left with a powerful tool for bringing together
women, minorities and all who are struggling in this economy. This becomes particularly important
if it is the case that technology already makes the ideal of full (or nearly full) employment
nothing more than a chimera, thus forcing the question of a guaranteed annual income. Establishing
that kind of permanent safety net will only be possible in a polity where there are firm bonds
between citizens and a marked sense of responsibility for the welfare of all.
And if the Democratic Party is honest, it will have to concede that even the popular incumbent
President has played a huge role in contributing to the overall sense of despair that drove people
to seek a radical outlet such as Trump. The Obama Administration rapidly broke with its Hope and
"Change you can believe in" the minute he appointed some of the architects of the 2008 crisis
as his main economic advisors, who in turn and gave us a Wall Street friendly bank bailout that
effectively restored the status quo ante (and refused to jail one single banker, even though many
were engaged in explicitly criminal activity).
====================================================================
For those who think its just Hillary, its not. There is no way there will ever be any acknowledgement
of Obama;s real failures he will no more be viewed honestly by dems than he could be viewed
honestly by repubs. Obama was a perfect identity candidate, i.e., not only capable of getting
the dem nomination, but the presidency and than not jailing banksters NO MATTER WHAT THEY DID,
OR WILL DO
I imagine Trump will be one term, and I imagine we return in short order to our nominally different
parties squabbling but in lock step with regard to their wall street masters
Democrats seem to be the more visible or clumsy in their attempts to govern themselves and
the populace, let alone understand their world. By way of illustration, consider the following.
One truism about immigration, to pick a topical item, is that uncontrolled immigration leads to
overwhelming an area whether city, state or country. Regardless of how one feels about the other
aspects of immigration, there are some real, unacknowledged limits to the viability of the various
systems that must accommodate arrivals, particularly in the short term. Too much of a perceived
good thing may be hazardous to one's health. Too much free stuff exhausts the producers,
infrastructure and support networks.
To extend and torture that concept further, just because, consider the immigration of populist
ideas to Washington. There is an entrenched royal court, not unlike Versailles in some respects,
where the sinecures, access to the White House tennis court (remember Jimmy Carter and his forest
for the trees issues) or to paid "lunches in Georgetown" or similar trappings. Inflow of populist
or other foreign ideas behind the veil of media and class secrecy represents a threat to overwhelm,
downgrade (Sayeth Yogi Berra: It is so popular that nobody goes there anymore) or remove those
perks, and to cause some financial, psychic or other pain to the hangers-on.
Pretty soon, word filters out through WikiLeaks, or just on the front page of a newspaper in
the case of the real and present corruption (What do you mean nobody went to jail for the frauds?).
In those instances, the tendency of a populace to remain aloof with their bread and circuses and
reality shows and such gets strained.
Some people began noticing and the cognitive dissonance
became to great to ignore no matter how many times the messages were delivered from on high. That
led to many apparent outbursts of rational behavior (What, you sold my family and me out and reduced
our prospects, so why should we vote for a party that takes us for granted, at best), which would
be counter-intuitive by some in our media.
"... ""This analysis raises a host of questions: If the unsecured credit lines that make the payments system function smoothly are liquidity, then are these credit lines also money? Should they be money? If these credit lines that are so important to the operation of the payments system are not money, then what is the point of defining money at all? I am still puzzling over these questions so I only ask them and don't pretend to answer them here."" ..."
"... Sissoko acknowledges the role that sovereign governments play in establishing money systems but I think gives too much credit :) to private bank credit creation. ..."
"... If money grew on trees it would be worth very little (Wray 2004) ..."
"... Money is the result of the struggle between debtors' demand for money and creditors' belief that the state can service its debt, which in turn depends on tax revenues. And it is the need to work for a taxable income that gives it value. (Ingham) ..."
"... Taxes don't finance spending but are necessary for money to have state backed value. They are also an important way for the state to transfer resources whether for bank bailouts, wars, social security, health care or whatever the state deems important. ..."
Carolyn Sissoko has an interesting new paper out,
Financial Stability
, in which she takes on the nature of money problem.
I think her concluding paragraph is interesting
""This analysis raises a host of questions: If the unsecured credit lines that make the payments
system function smoothly are liquidity, then are these credit lines also money? Should they be money?
If these credit lines that are so important to the operation of the payments system are not money, then
what is the point of defining money at all? I am still puzzling over these questions so I only ask them
and don't pretend to answer them here.""
As a derivatives expert she takes on the interesting question of how these complex sources of credit
function, they provide credit but are they really money.
I think Ingham makes a great point relevant to this, "all money is credit but not all credit is money"
Sissoko acknowledges the role that sovereign governments play in establishing money systems but I
think gives too much credit :) to private bank credit creation.
If money grew on trees it would be worth very little (Wray 2004)
Money is the result of the struggle between debtors' demand for money and creditors' belief that
the state can service its debt, which in turn depends on tax revenues. And it is the need to work for
a taxable income that gives it value. (Ingham)
Taxes don't finance spending but are necessary for money to have state backed value. They are also
an important way for the state to transfer resources whether for bank bailouts, wars, social security,
health care or whatever the state deems important.
If money grew on trees it would be worth very little (Wray 2004)
That would depend on the rate of growth and, assuming every citizen had an equal number and quality
of such trees, be an ethical means to create fiat apart from normal deficit spending for the general
welfare.
Of course there are no such trees but equal fiat distributions to all adult citizens could have
the same effect.
"... The funny thing is that they've so learned to love the smell of their own farts (or propaganda) that they internalized an image of enlightened progressivism for themselves. This Trump election was probably the first clue that their self image is faulty and not widely shared by others. They are not taking it well. ..."
NYTimes still blames race on Trump's winning over Obama supporters in Iowa:
Trump clearly sensed the fragility of the coalition that Obama put
together - that the president's support in heavily white areas was built not
on racial egalitarianism but on a feeling of self-interest. Many white
Americans were no longer feeling that belonging to this coalition benefited
them.
Racial egalitarianism wasn't the reason for white support for Obama in 2008
and 2012 in Iowa. It reflected racial egalitarianism, but that support had to
do with perceived economic self-interest, just as the switch to Trump in 2016
did.
And what on earth is wrong with self-interest as a reason for voting?
Right. These corporatists use identity politics as a stalking horse to
rob the public blind, and then they spew invectives about racism and
mysogony wherever the public stops buying the bullcrap.
The funny thing is that they've so learned to love the smell of their own
farts (or propaganda) that they internalized an image of enlightened
progressivism for themselves. This Trump election was probably the first
clue that their self image is faulty and not widely shared by others. They
are not taking it well.
"... Judging by the volume of complaints from Clinton sycophants insisting that people did not get behind Clinton or that it was purely her gender, they won't. Why would anyone get behind Clinton save the 1%? Her policies were pro-war, pro-Wall Street, and at odds with what the American people needed. Also, we should judge based on policy, not gender and Clinton comes way short of Sanders in that regard in many regards, she is the antithesis of Sanders. ..."
"... "Establishment Democrats have nobody but themselves to blame for this one. The only question is whether or not they are willing to take responsibility" I disagree. In my view, it is not a question at all. They have never taken responsibility for anything, and they never will. ..."
"... What would make Democrats focus on the working class? Nothing. They have lost and brought about destruction of the the Unions, which was the Democratic Base, and have become beholden to the money. The have noting in common with the working class, and no sympathy for their situation, either. ..."
"... What does Bill Clinton, who drive much of the policy in the '90s, and spent his early years running away form the rural poor in Arkansas (Law School, Rhodes Scholarship), have in common with working class people anywhere? ..."
"... Iron law of institutions applies. Position in the D apparatus is more important than political power because with power come blame. ..."
"... I notice Obama worked hard to lose majorities in the house and Senate so he could point to the Republicans and say "it was their fault" except when he actually wanted something, and made it happen (such as TPP). ..."
"... Agreed with the first but not the second. It's typical liberal identity politics guilt tripping. That won't get you too far on the "white side" of Youngstown Ohio. ..."
"... Also suspect that the working-class, Rust-Belt Trump supporters will soon be thrown under the bus by their Standard Bearer, if the Transition Team appointments are any indicator: e.g. Privateers at SSA. ..."
"... My wife teaches primary grades in an inner city school. She has made it clear to me over the years that the challenges her children are facing are related to poverty, not race. She sees a big correlation between the financial status of a family and its family structure (one or more parents not present or on drugs) and the kids' success in school. Race is a minor factor. ..."
"... The problem with running on a class based platform in America is, well, it's America; and in good ol' America, we are taught that anyone can become a successful squillionare ya know, hard work, nose-to-the-grindstone, blah, blah, blah. ..."
"... The rags to riches American success fable is so ingrained that ideas like taxing the rich a bit more fall flat because everyone thinks "that could be me someday. Just a few house flips, a clever new app, that ten-bagger (or winning lottery ticket) and I'm there" ("there" being part of the 1%). ..."
"... The idea that anyone can be successful (i.e. rich) is constantly promoted. ..."
"... I think this fantasy is beginning to fade a bit but the "wealth = success" idea is so deeply rooted in the American psyche I don't think it will ever fade completely away. ..."
"... If you spend time in hardscrabble, white upstate New York, or eastern Kentucky, or my own native West Texas, and you take an honest look at the welfare dependency, the drug and alcohol addiction, the family anarchy - which is to say, the whelping of human children with all the respect and wisdom of a stray dog - you will come to an awful realization. It wasn't Beijing. It wasn't even Washington, as bad as Washington can be. It wasn't immigrants from Mexico, excessive and problematic as our current immigration levels are. It wasn't any of that. ..."
"... Nothing happened to them. There wasn't some awful disaster. There wasn't a war or a famine or a plague or a foreign occupation. Even the economic changes of the past few decades do very little to explain the dysfunction and negligence - and the incomprehensible malice - of poor white America. So the gypsum business in Garbutt ain't what it used to be. There is more to life in the 21st century than wallboard and cheap sentimentality about how the Man closed the factories down. ..."
"... The truth about these dysfunctional, downscale communities is that they deserve to die. Economically, they are negative assets. Morally, they are indefensible. Forget all your cheap theatrical Bruce Springsteen crap. Forget your sanctimony about struggling Rust Belt factory towns and your conspiracy theories about the wily Orientals stealing our jobs. Forget your goddamned gypsum, and, if he has a problem with that, forget Ed Burke, too. The white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles. Donald Trump's speeches make them feel good. So does OxyContin. ..."
"... White Trash: The 400-Year Untold History of Class in America ..."
"... Poor or Poorer whites have been demonised since the founding of the original Colonies, and were continuously pushed west to the frontiers by the ruling elites of New England and the South as a way of ridding themselves of "undesirables", who were then left to their own resources, and clung together for mutual assistance. ..."
"... White trash is a central, if disturbing, thread in our national narrative. The very existence of such people both in their visibility and invisibility is proof that American society obsesses over the mutable labels we give to the neighbors we wish not to notice. "They are not who we are". But they are who we are and have been a fundamental part of our history, whether we like it or not". ..."
"... "To be sure, Donald Trump did make a strong appeal to racists, homophobes, and misogynists " ..."
"... working class white women ..."
"... Obama is personally likeable ..."
"... History tells us the party establishment will move further right after election losses. And among the activist class there are identity purity battles going on. ..."
"... Watch as this happens yet again: "In most elections, U.S. politicians of both parties pretend to be concerned about their issues, then conveniently ignore them when they reach power and implement policies from the same Washington Consensus that has dominated the past 40 years." That is why we need a strong third party, a reformed election system with public support of campaigns and no private money, and free and fair media coverage. But it ain't gonna happen. ..."
"... Obviously, if the Democrats nominate yet another Clintonite Obamacrat all over again, I may have to vote for Trump all over again . . . to stop the next Clintonite before it kills again. ..."
Ultimately the Establishment Democrats have nobody but themselves to blame for this one. The
only question is whether or not they are willing to take responsibility for what happened.
Judging by the volume of complaints from Clinton sycophants insisting that people did not
get behind Clinton or that it was purely her gender, they won't. Why would anyone get behind Clinton
save the 1%? Her policies were pro-war, pro-Wall Street, and at odds with what the American people
needed. Also, we should judge based on policy, not gender and Clinton comes way short of Sanders
in that regard in many regards, she is the antithesis of Sanders.
Class trumps race, to make a pun. If the left doesn't take the Democratic Party back and clean
house, I expect that there is a high probability that 2020's election will look at lot like the
2004 elections.
I'd recommend someone like Sanders to run. Amongst the current crop, maybe Tulsi Gabbard or
Nina Turner seem like the best candidates.
"Establishment Democrats have nobody but themselves to blame for this one. The only question
is whether or not they are willing to take responsibility" I disagree. In my view, it is not a
question at all. They have never taken responsibility for anything, and they never will.
What would make Democrats focus on the working class? Nothing. They have lost and brought
about destruction of the the Unions, which was the Democratic Base, and have become beholden to
the money. The have noting in common with the working class, and no sympathy for their situation,
either.
What does Bill Clinton, who drive much of the policy in the '90s, and spent his early years
running away form the rural poor in Arkansas (Law School, Rhodes Scholarship), have in common
with working class people anywhere?
The same question applies to Hillary, to Trump and the remainder of our "representatives" in
Congress.
Without Unions, how are US Representatives from the working class elected?
What we are seeing is a shift in the US for the Republicans to become the populist party. They
already have the churches, and with Trump they can gain the working class although I do not
underestimate the contempt help by our elected leaders for the Working Class and poor.
The have forgotten, if they ever believed: "There, but for the grace of God, go I".
Iron law of institutions applies. Position in the D apparatus is more important than political
power because with power come blame.
I notice Obama worked hard to lose majorities in the house and Senate so he could point
to the Republicans and say "it was their fault" except when he actually wanted something, and
made it happen (such as TPP).
We know that class and economic insecurity drove many white people to vote for Trump. That's
understandable. And now we are seeing a rise in hate incidents inspired by his victory. So obviously
there is a race component in his support as well. So, if you, white person, didn't vote for Trump
out of white supremacy, would you consider making a statement that disavows the acts of extremist
whites? Do you vow to stand up and help if you see people being victimized? Do you vow not to
stay silent when you encounter Trump supporters who ARE obviously in thrall to the white supremacist
siren call?
Agreed with the first but not the second. It's typical liberal identity politics guilt
tripping. That won't get you too far on the "white side" of Youngstown Ohio.
And I wouldn't worry about it. When I worked at the at the USX Fairless works in Levittown
PA in 1988, I was befriended by one steelworker who was a clear raving white supremacist racist.
(Actually rather nonchalant about about it). However he was the only one I encountered who was
like this, and eventually I figured out that he befriended a "newbie" like me because he had no
friends among the other workers, including the whites. He was not popular at all.
I've always thought that Class, not Race, was the Third Rail of American Politics, and that
the US was fast-tracking to a more shiny, happy feudalism.
Also suspect that the working-class, Rust-Belt Trump supporters will soon be thrown under
the bus by their Standard Bearer, if the Transition Team appointments are any indicator: e.g.
Privateers at SSA.
My wife teaches primary grades in an inner city school. She has made it clear to me over
the years that the challenges her children are facing are related to poverty, not race. She sees
a big correlation between the financial status of a family and its family structure (one or more
parents not present or on drugs) and the kids' success in school. Race is a minor factor.
She also makes it clear to me that the Somali/Syrian/Iraqi etc. immigrant kids are going to
do very well even though they come in without a word of English because they are working their
butts off and they have the full support of their parents and community. These people left bad
places and came to their future and they are determined to grab it with both hands. 40% of her
class this year is ENL (English as a non-native language). Since it is an inner city school, they
don't have teacher's aides in the class, so it is just one teacher in a class of 26-28 kids, of
which a dozen struggle to understand English. Surprisingly, the class typically falls short of
the "standards" that the state sets for the standardized exams. Yet many of the immigrant kids
end up going to university after high school through sheer effort.
Bullying and extreme misbehavior (teachers are actually getting injured by violent elementary
kids) is largely done by kids born in the US. The immigrant kids tend to be fairly well-behaved.
On a side note, the CSA at our local farmer's market said they couldn't find people to pick
the last of their fall crops (it is in a rural community so a car is needed to get there). So
the food bank was going out this week to pick produce like squash, onions etc. and we were told
we could come out and pick what we wanted. Full employment?
The problem with running on a class based platform in America is, well, it's America; and
in good ol' America, we are taught that anyone can become a successful squillionare ya know,
hard work, nose-to-the-grindstone, blah, blah, blah.
The rags to riches American success fable is so ingrained that ideas like taxing the rich
a bit more fall flat because everyone thinks "that could be me someday. Just a few house flips,
a clever new app, that ten-bagger (or winning lottery ticket) and I'm there" ("there" being part
of the 1%).
The idea that anyone can be successful (i.e. rich) is constantly promoted.
I think this fantasy is beginning to fade a bit but the "wealth = success" idea is so deeply
rooted in the American psyche I don't think it will ever fade completely away.
I'm recalling (too lazy to find the link) a poll a couple years ago that showed the number
of American's identifying as "working class" increased, and the number as "middle class" decreased.
It is both. And it is a deliberate mechanism of class division to preserve power. Bill Cecil-Fronsman,
Common Whites: Class and Culture in Antebellum North Carolina identifies nine classes
in the class structure of a state that mixed modern capitalist practice (plantations), agrarian
YOYO independence (the non-slaveowning subsistence farms), town economies, and subsistence (farm
labor). Those classes were typed racially and had certain economic, power, and social relations
associated with them. For both credit and wages, few escaped the plantation economy and being
subservient to the planter capitalists locally.
Moreover, ethnic identity was embedded in the law as a class marker. This system was developed
independently or exported through imitation in various ways to the states outside North Carolina
and the slave-owning states. The abolition of slavery meant free labor in multiple senses and
the capitalist use of ethnic minorities and immigrants as scabs integrated them into an ethnic-class
system, where it was broad ethnicity and not just skin-color that defined classes. Other ethnic
groups, except Latinos and Muslim adherents, now have earned their "whiteness".
One suspects that every settler colonial society develops this combined ethnic-class structure
in which the indigenous ("Indians" in colonial law) occupy one group of classes and imported laborers
or slaves or intermixtures ("Indian", "Cape Colored" in South Africa) occupy another group of
classes available for employment in production. Once employed, the relationship is exactly that
of the slaveowner to the slave no matter how nicely the harsh labor management techniques of 17th
century Barbados and Jamaica have been made kinder and gentler. But outside the workplace (and
often still inside) the broader class structure applies even contrary to the laws trying to restrict
the relationship to boss and worker.
Blacks are not singling themselves out to police; police are shooting unarmed black people
without punishment. The race of the cop does not matter, but the institution of impunity makes
it open season on a certain class of victims.
It is complicated because every legal and often managerial attempt has been made to reduce
the class structure of previous economies to the pure capitalism demanded by current politics.
So when in a post Joe McCarthy, post-Cold War propaganda society, someone wants to protest
the domination of capitalism, attacking who they perceive as de facto scabs to their higher incomes
(true or not) is the chosen mode of political attack. Not standing up for the political rights
of the victims of ethnically-marked violence and discrimination allows the future depression of
wages and salaries by their selective use as a threat in firms. And at the individual firm and
interpersonal level even this gets complicated because in spite of the pressure to just be businesslike,
people do still care for each other.
This is a perennial mistake. In the 1930s Southern Textile Strike, some organizing was of both
black and white workers; the unions outside the South rarely stood in solidarity with those efforts
because they were excluding ethnic minorities from their unions; indeed, some locals were organized
by ethnicity. That attitude also carried over to solidarity with white workers in the textile
mills. And those white workers who went out on a limb to organize a union never forgot that failure
in their labor struggle. It is the former textile areas of the South that are most into Trump's
politics and not so much the now minority-majority plantation areas.
It still is race in the inner ring suburbs of ethnically diverse cities like St. Louis that
hold the political lock on a lot of states. Because Ferguson to them seems like an invasion of
the lower class. Class politics, of cultural status, based on ethnicity. Still called by that
19h century scientific racism terminology that now has been debunked - race - Caucasoid, Mongoloid,
Negroid. Indigenous, at least in the Americas, got stuck under Mongoloid.
You go organize the black, Latino, and white working class to form unions and gain power, and
it will happen. It is why Smithfield Foods in North Carolina had to negotiate a contract. Race
can be transcended in action.
Pretending the ethnic discrimination and even segregation does not exist and have its own problems
is political suicide in the emerging demographics. Might not be a majority, but it is an important
segment of the vote. Which is why the GOP suppressed minority voters through a variety of legal
and shady electoral techniques. Why Trump wants to deport up to 12 million potential US citizens
and some millions of already birthright minor citizens. And why we are likely to see the National
Labor Review Board gutted of what little power it retains from 70 years of attack. Interesting
what the now celebrated white working class was not offered in this election, likely because they
would vote it down quicker because, you know, socialism.
Your comment reminded me of an episode in Seattle's history.
Link . The
unions realized they were getting beat in their strikes, by scabs, who were black. The trick was
for the unions to bring the blacks into the union. This was a breakthrough, and it worked in Seattle,
in 1934. There is a cool mural the union commissioned by,
Pablo O'Higgins , to
celebrate the accomplishment.
Speaking of class, and class contempt , one must recall the infamous screed published
by National Review columnist Kevin Williamson early this year, writing about marginalised white
people here is a choice excerpt:
If you spend time in hardscrabble, white upstate New York, or eastern Kentucky, or my
own native West Texas, and you take an honest look at the welfare dependency, the drug and
alcohol addiction, the family anarchy - which is to say, the whelping of human children with
all the respect and wisdom of a stray dog - you will come to an awful realization. It wasn't
Beijing. It wasn't even Washington, as bad as Washington can be. It wasn't immigrants from
Mexico, excessive and problematic as our current immigration levels are. It wasn't any of that.
Nothing happened to them. There wasn't some awful disaster. There wasn't a war or a famine
or a plague or a foreign occupation. Even the economic changes of the past few decades do very
little to explain the dysfunction and negligence - and the incomprehensible malice - of poor
white America. So the gypsum business in Garbutt ain't what it used to be. There is more to
life in the 21st century than wallboard and cheap sentimentality about how the Man closed the
factories down.
The truth about these dysfunctional, downscale communities is that they deserve to die.
Economically, they are negative assets. Morally, they are indefensible. Forget all your cheap
theatrical Bruce Springsteen crap. Forget your sanctimony about struggling Rust Belt factory
towns and your conspiracy theories about the wily Orientals stealing our jobs. Forget your
goddamned gypsum, and, if he has a problem with that, forget Ed Burke, too. The white American
underclass is in thrall to a vicious, selfish culture whose main products are misery and used
heroin needles. Donald Trump's speeches make them feel good. So does OxyContin.
Now it's not too much of a stretch of the imagination to state that Williamson's animus can
be replicated amongst many of the moneyed elite currently pushing and shoving their way into a
position within the incoming Trump Administration. The Trump campaign has openly and cynically
courted and won the votes of white people similar to those mentioned in Williamson's article,
and who doubtlessly will be stiffed by policies vigourously opposed to their welfare that
will be enacted during the Trump years. The truly intriguing aspect of the Trump election is:
what will be the consequences of further degradation of the "lower orders' " quality of life by
such actions? Wholesale retreat from electoral politics? Further embitterment and anger NOT toward
those in Washington responsible for their lot but directed against ethnic and racial minorities
"stealing their jawbs" and "getting welfare while we scrounge for a living"? I sincerely doubt
whether the current or a reconstructed Democratic Party can at all rally this large chunk of white
America by posing as their "champions" the class divide in the US is as profound as the racial
chasm, and neither major party because of internal contradictions can offer a credible answer.
[In addition to the growing inequality and concomitant wage stagnation for the middle and working
classes, 9/11 and its aftermath has certainly has contributed to it as well, as, making PEOPLE
LONG FOR the the Golden Age of Managerial Capitalism of the post-WWII era,]
Oh yeah, I noticed a big ol' hankerin' for that from the electorate. What definition could
the author be using for Managerial Capitalism that could make it the opposite of inequality? The
fight for power between administration and shareholders does not lead to equality for workers.
[So this gave force to the idea that the government was nothing but a viper's nest full of
crony capitalist enablers,]
I don't think it's an 'idea' that the govt is crony capitalists and enablers. Ds need to get
away from emotive descriptions. Being under/unemployed, houseless, homeless, unable to pay for
rent, utilities, food . aren't feelings/ideas. When that type of language is used, it comes across
as hand waving. There needs to be a shift of talking to rather than talking about.
If crony capitalism is an idea, it's simply a matter for Ds to identify a group (workers),
create a hierarchy (elite!) and come up with a propaganda campaign (celebrities and musicians
spending time in flyover country-think hanging out in coffee shops in a flannel shirt) to get
votes. Promise to toss them a couple of crumbs with transfer payments (retraining!) or a couple
of regulations (mandatory 3 week severance!) and bring out the obligatory D fall back- it would
be better than the Rs would give them. On the other hand, if it's factual, the cronies need to
be stripped of power and kicked out or the nature of the capitalist structure needs to be changed.
It's laughable to imagine liberals or progressives would be open to changing the power and nature
of the corporate charter (it makes me smile to think of the gasps).
The author admits that politicians lie and continue the march to the right yet uses the ACA,
a march to the right, as a connection to Obama's (bombing, spying, shrinking middle class) likability.
[[But emphasizing class-based policies, rather than gender or race-based solutions, will achieve
more for the broad swathe of voters, who comprehensively rejected the "neo-liberal lite" identity
politics]
Oops. I got a little lost with the neo-liberal lite identity politics. Financialized identity
politics? Privatized identity politics?
I believe women and poc have lost ground (economic and rights) so I would like examples of
successful gender and race-based (liberal identity politics) solutions that would demonstrate
that identity politics targeting is going to work on the working class.
If workers have lost power, to balance that structure, you give workers more power (I predict
that will fail as unions fall under the generic definition of corporatist and the power does not
rest with the members but with the CEOs of the unions an example is a union that block the members
from voting to endorse a candidate, go against the member preference and endorse the corporatist
candidate), or you remove power from the corporation. Libs/progs can't merely propose something
like vesting more power with shareholders to remove executives as an ameliorating maneuver which
fails to address the power imbalance.
[This is likely only to accelerate the disintegration of the political system and economic
system until the elephant in the room class is honestly and comprehensively addressed.]
For a thorough exposition of lower-class white America from the inception of the Republic to
today, a must-read is Nancy Isenberg's White Trash: The 400-Year Untold History of Class in
America . Poor or Poorer whites have been demonised since the founding of the original
Colonies, and were continuously pushed west to the frontiers by the ruling elites of New England
and the South as a way of ridding themselves of "undesirables", who were then left to their own
resources, and clung together for mutual assistance.
Thus became the economic and cultural subset of "crackers", "hillbillies", "rednecks", and
later, "Okies", a source of contempt and scorn by more economically and culturally endowed whites.
The anti-bellum white Southern aristocracy cynically used poor whites as cheap tenant farming,
all the while laying down race-based distinctions between them and black slaves there is always
someone lower on the totem pole, and that distinction remains in place today. Post-Reconstruction,
the South maintained the cult of white superiority, all the while preserving the status of upper-class
whites, and, by race-based public policies, assured lower-class whites that such "superiority"
would be maintained by denying the black populations access to education, commerce, the vote,
etc. And today, "white trash", or "trailer trash", or poorer whites in general are ubiquitous
and as American as apple pie, in the North, the Midwest, and the West, not just the South. Let
me quote Isenberg's final paragraph of her book:
White trash is a central, if disturbing, thread in our national narrative. The very
existence of such people both in their visibility and invisibility is proof that American
society obsesses over the mutable labels we give to the neighbors we wish not to notice. "They
are not who we are". But they are who we are and have been a fundamental part of our history,
whether we like it or not".
Presenting a plan for the future, which has a chance to be supported by the electorate, must
start with scrupulous, unwavering honesty and a willingness to acknowledge inconvenient facts.
The missing topic from the 2016 campaigns was declining energy surpluses and their pervasive,
negative impact on the prosperity to which we feel entitled. Because of the energy cost of producing
oil, a barrel today represents a declining fraction of a barrel in terms of net energy. This is
the major factor in sluggish economic performance. Failing to make this case and, at the same
time, offering glib and vacuous promises of growth and economic revival, are just cynical exercises
in pandering.
Our only option is to mange the coming decline in a way that does not descend into chaos and
anarchy. This can only be done with a clear vision of causes and effects and the wisdom and courage
to accept facts. The alternative is yet more delusions and wishful thinking, whose shelf life
is getting shorter.
To be fair to the article, Marshall did in fact say:
"To be sure, Donald Trump did make a strong appeal to racists, homophobes, and misogynists
"
IMO the point Marshall is making that race was not the primary reason #DJT
won. And I concur.
This is borne out by the vote tallies which show that the number of R voters from 2012 to 2016
was pretty much on the level (final counts pending):
2016 R Vote: 60,925,616
2012 R Vote: 60,934,407
(Source:
US Election Atlas )
Stop and think about this for a minute. Every hard core racist had their guy this
time around; and yet, the R's could barely muster the same amount of votes as Mittens
in 2012. This is huge, and supports the case that other things contributed far more than just
race.
Class played in several ways:
Indifference/apathy/fatigue: Lambert posted some data from Carl Beijer on this yesterday in his
Clinton Myths piece yesterday.
Anger: #HRC could not convince many people who voted for Bernie that she was interested in his
outreach to the working class. More importantly, #HRC could not convince working class white
women that she had anything other than her gender and Trump's boorishness as a counterpoint
to offer.
Outsider v Insider: Working class people skeptical of political insiders rejected #HRC.
If black workers were losing ground and white workers were gaining, one could indeed claim
that racism is a problem. However, both black and white workers are losing ground racism simply
cannot be the major issue here. It's not racism, it's class war.
The fixation on race, the corporate funding of screaming 'black lives matter' agitators, the
crude attempts to tie Donald Trump to the KKK (really? really?) are just divide and conquer, all
over again.
Whatever his other faults, Donald Trump has been vigorous in trying to reach out to working
class blacks, ev
During this period, we have witnessed a huge national decline in well-paid middle class jobs in the manufacturing sector and other sources of employment for those lacking college degrees, with median American wages having been stagnant or declining for the last forty years. Meanwhile, there has been an astonishing concentration of wealth at the top, with America's richest 1 percent now possessing nearly as much net wealth as the bottom 95 percent. [2]
I recall a news story about the adverse effects of a reduction in smoking on the US Social Security Trust Fund. Those actuaries make those calculations for a living. The trouble with shortening life spans via cancer is that end-of-life treatment tends to be very expensive unless people do not have or have very basic health insurance, then there is a likely net gain. Alcohol, murder and suicides are generally much more efficient economically. I just depressed myself.kirill , July 24, 2017 at 8:09 pmSomething does not add up. Any government expenditure is an economic stimulus. The only potentially negative aspect is taxation. Since taxation is not excessive and in fact too small on key layers (e.g. companies and the rich), there is no negative aspect to government spending on pensions. So we have here narrow-definition accounting BS.Jen , July 25, 2017 at 4:56 amAgree that in a world where the people, represented by their governments, are in charge of money creation and governments ran their financial systems independently of Wall Street and Washington, any government spending would be welcomed as stimulating economic production and development. The money later recirculates back to the government when the people who have jobs created by government spending pay the money back through purchases of various other government goods and services or through their taxes.marknesop , July 25, 2017 at 9:18 am
Hi Guy,BloomingDave says: 12/07/2016 at 9:07 pm
The IEA Oil Market Report, November 2016 on Iran's oil production and exports:AlexS says: 12/08/2016 at 6:54 am
Iraqi oil production and exports in 2016 were also above 2015 levelsAlexS says: 12/08/2016 at 6:59 am
According to JODI, Saudi Arabia's crude and refined product exports in January-September 2016 was about 460 kb/d higher than 2015 average.Watcher says: 12/08/2016 at 10:16 am
So that says KSA domestic consumption is 2ish mbpd?AlexS says: 12/08/2016 at 10:36 amProgressive capitalist advocates Ricardian socialists such as John Stuart Mill wanted to tax away the land or nationalize it. Marx wanted governments to take over heavy industry and build infrastructure to provide low-cost and ultimately free basic services. This was traumatizing the landlord class and the One Percent. And they fought back. They wanted to make everything part of "the market," which functioned on credit supplied by them and paid rent to them.
Most of the old factories are boarded up, unmistakable emblems of hopelessness right up to the roof. But the ones that have been successfully repurposed are in some ways even worse, filled as they often are with enterprises offering cheap suits or help with drug addiction. A clinic in the hulk of one abandoned mill has a sign on the window reading simply "Cancer & Blood."
Here is the production graph. Not that much has happened. There was a big drop for 2011. 2009 on the other hand saw an increase. Up to the left, which is very hard to see, 2015 continues to follow 2014 which follows 2013 which follows 2012. Will we see 2013 reach 2007 the next few months?Watcher says: 11/16/2016 at 10:34 pm
Freddy, these latest years, the IP months are chopped at the top. Any chance of showing those?FreddyW says: 11/17/2016 at 2:10 pm
Excellent.Watcher says: 11/17/2016 at 8:12 pm
Hi FreddyW,FreddyW says: 11/16/2016 at 6:02 pm
I am not so convinced that either Texas or the Bakken is finished declining at the current level of completions. There was consistent completions of over 1000 wells in Texas until about October of 2015. Then it dropped to less than half of that. The number of producing wells in Texas peaked in June of this year. Since then, through October, it has decreased by roughly 1000 wells a month. The Texas RRC reports are indicating that they are still plugging more than they are completing.Dennis Coyne says: 11/16/2016 at 10:03 pm
Hi Alex S,shallow sand says: 11/17/2016 at 8:36 am
I expect if that depressing old banker were here he would note that instability is dangerous, and that all the moves in treasuries currency and possibly trade flow create changes of which the results are difficult or impossible to predictOldfarmermac says: 11/18/2016 at 7:55 amHi Heinrich,Heinrich Leopold says: 11/18/2016 at 9:49 am
This article from Platts explains better than me:AlexS says: 11/18/2016 at 8:59 pm
The number of horizontal rigs drilling for oil in the Permian is now 54% of the 2014 peak.AlexS says: 11/18/2016 at 9:42 pm
Weak drilling activity in the Bakken and the Eagle Ford helps to explain continued declines in their oil productionRoger Blanchard says: 11/19/2016 at 8:17 am
Alex,George Kaplan says: 11/19/2016 at 8:35 am
From a recent EIA report:AlexS says: 11/18/2016 at 9:58 pm
The EIA DPR production volume estimates for the Permian include both LTO and conventional C+CAlexS says: 11/18/2016 at 10:06 pm
Permian Basin also dominates M&A activity in the US E&P sector.Heinrich Leopold says: 11/19/2016 at 6:09 am
Dennis Coyne says: 11/16/2016 at 9:11 pmHi Alex S,
Jeff says: 11/16/2016 at 3:20 pmIEA WEO is out: http://www.iea.org/newsroom/news/2016/november/world-energy-outlook-2016.html presentation slides, fact sheet and summary are available online (report can be purchased). IEA seems to be _very_ concerned about underinvestment in upstream oil production. Several pages of the report is devoted to this, the title of that section is "mind the gap". More or less all of the content has been discussed on this website, including the issue with high levels of debt and that this can affect suppliers' capacity to rebound, and how much demand can be reduced as a result of a stringent carbon cap.
